Burlington Stores’ Revenue: What Factors Are Driving It?



Revenue growth

Burlington Stores (BURL) has proved the strength of its off-price business model amid a challenging retail environment. Its revenue (comprised of net sales and other revenue) rose 8.6% to $1.4 billion in fiscal 2Q17, which ended on July 29, 2017. The company’s growth rate looks impressive compared to the dismal performance of major department stores. Macy’s (M), Kohl’s (KSS), and JCPenney (JCP) reported sales growth of -5.4%, -0.90%, and 1.5%, respectively, in fiscal 2Q17.

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Comparison with off-price retailers

In fiscal 2Q17, Burlington Stores’ revenue growth was also better than its larger peers TJX Companies (TJX) and Ross Stores (ROST), which reported sales growth of 6.0% and 7.9%, respectively, in the comparable second quarter.

Burlington Stores’ revenue growth rate of 8.6% in fiscal 2Q17 was higher than its 4.9% growth rate in fiscal 1Q17 but lower than its 9.5% growth in fiscal 2Q16. The company’s net sales grew 8.6% to $1.4 billion, and other revenue rose 1.6% to $5.8 million in fiscal 2Q17.

Burlington Stores’ strong revenue growth in fiscal 2Q17 was driven by the better-than-expected performance of the company’s new stores, which contributed $69.8 million in incremental sales. The company’s same-store sales rose 3.5% in fiscal 2Q17. However, closed stores and other sales adjustments adversely impacted the fiscal 2Q17 top line by $5.4 million in the second quarter.

The company experienced strong performances in several merchandise categories, including home, beauty, missy sportswear, men’s sports, men’s shoes, athletic shoes, and handbags.

Strong guidance

Following a strong second quarter, Burlington Stores raised its fiscal 2017 sales guidance. The company expects its sales growth (excluding other revenue) in the range of 8.4% to 8.9% in fiscal 2017. Burlington Stores had previously expected sales growth in the range of 7.3% to 8.1%. The company expects its same-store sales growth for fiscal 2017 in the range of 2.0% to 2.5%.

Next, let’s look at Burlington Stores’ growth strategies.


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