Trend in top-line growth
Burlington Stores’ (BURL) off-price model helped it deliver same-store sales growth for the 19th consecutive quarter in fiscal 3Q17, which ended on October 28, 2017. Burlington Stores’ same-store sales growth (or SSSG) was 3.1% in fiscal 3Q17.
The company’s net sales grew 7.1% to $1.4 billion in fiscal 3Q17. Its fiscal 3Q17 net sales growth rate was lower than the 8.6% growth rate in fiscal 2Q17 and the 9.1% growth rate in fiscal 3Q16.
Burlington Stores’ (BURL) overall revenues grew 7.1% to $1.4 billion in fiscal 3Q17. Its overall revenues consist of its net sales from the Retail business and other revenues. Its other revenues include subleased rental income and rental income from leased departments.
However, the company’s other revenue accounts for only a small proportion (0.4% in fiscal 3Q17) of its overall revenues.
Burlington Stores (BURL) has worked to enhance its merchandise, particularly in underpenetrated categories like home, beauty, and women’s apparel. In the home category, the company is expanding the availability of recognizable national brands.
BURL’s home business accounted for ~12.4% of its fiscal 2016 sales. The company expects this percentage to improve in fiscal 2017. In the long term, aims to achieve a 20.0% penetration rate for the home business.
Beauty is a key growth category for Burlington Stores. The company is expanding the number of beauty brands and designer fragrances offered in its stores. The company is also enhancing its offerings in beauty accessories.
Peers and competition
Mid-tier department store JCPenney (JCP) is also focusing on its beauty business by strengthening its Sephora stores within its JCPenney locations. At the end of fiscal 3Q17, JCPenney operated 642 Sephora stores within its locations.
Burlington Stores is taking several initiatives to improve its women’s apparel business. These initiatives include focusing on growth categories like activewear, strengthening its presence in categories like dresses and suits, and capitalizing on the growth opportunity in plus-size clothing.
Aside from its efforts to enhance its merchandise, Burlington Stores is also remodeling its stores and working on providing better customer service. In 2017, the company remodeled 34 stores. We’ll discuss the company’s margins in the next part of this series.