Burlington Stores Stock Plummets on Unimpressive Q4 Sales

Q4 top-line lagged behind expectations

Burlington Stores (BURL) stock was down 12.7% as of 2:57 PM ET today in reaction to the company’s lower-than-expected top-line performance in Q4 of fiscal 2018, which ended on February 2, 2019. Burlington Stores’ revenue, including retail net sales and other revenue, grew 2.8% to $2.0 billion in the fourth quarter.

After a strong performance in Q3 of fiscal 2018, investors were expecting Burlington Stores to generate impressive numbers in the fourth quarter, which includes the holiday season.

The company’s net sales grew 2.8% to $1.99 billion in the fourth quarter and fell short of analysts’ estimate of $2.04 billion. Q4 of fiscal 2017 included an extra week. Fiscal 2018’s fourth-quarter sales growth was driven by new stores and same-store sales growth of 1.3% on a shifted basis. Analysts had forecast same-store sales growth of 3.2%. The company recorded weakness in the cold weather and ladies apparel categories in the fourth quarter.

Rival Ross Stores’ (ROST) Q4 of fiscal 2018 sales grew 1.0% to $4.11 billion, and its same-store sales rose 4.0%.

Burlington Stores Stock Plummets on Unimpressive Q4 Sales

Burlington Stores’ Q4 of fiscal 2018 adjusted EPS of $2.83 beat analysts’ expectation of $2.77. The company’s Q4 of fiscal 2017 adjusted EPS were $2.21, excluding the impact of the additional week and a deferred tax revaluation.

Fiscal 2018 revenue grew 9.1% to $6.67 billion in fiscal 2018. The company’s adjusted EPS grew to $6.44 from $4.41, excluding the impact of the additional week and one-time items, in fiscal 2017.

Outlook

Burlington Stores expects fiscal 2019 net sales growth in the range of 9%–10% and same-store sales growth in the range of 1.5%–2.8%. The off-price retailer expects its fiscal 2019 adjusted EPS in the range of $6.93–$7.06. Analysts were expecting adjusted EPS of $7.06 for fiscal 2019.

Burlington Stores plans to open 50 new stores, net of store closures, in fiscal 2019. The off-price retailer opened 46 net new stores in fiscal 2018. Burlington Stores operated 674 physical stores as of the end of fiscal 2018.