By Denny Jacob

Burlington Stores posted higher sales in the latest quarter and said the holiday selling season has started strong, as the off-price retailer's offerings resonate with consumers looking for deals.

The Burlington, N.J.-based company reported better-than-expected revenue for the third quarter, even as warmer weather starting in mid-September dented sales of coats and other cold-weather gear.

However, the retailer's fourth-quarter expectations slightly missed Wall Street estimates.

Shares fell 1% in mid-morning trading to $288.79. The stock has jumped 11% in the past month, and is up 45% this year.

Burlington logged net income of $90.6 million, or $1.40 a share, for the third quarter ended Nov. 2, up from $48.6 million, or 75 cents a share, a year earlier.

Stripping out one-time items, earnings were $1.55 a share, matching analysts' estimates.

Revenue increased to $2.53 billion from $2.29 billion. Analysts polled by FactSet had expected $2.55 billion. Same-store sales rose 1%.

Chief Executive Michael O'Sullivan said that the quarter started out very strongly but then suffered due to warmer weather across the country. Excluding cold weather categories, which make up about 15% of Burlington's sales, Burlington's same-store sales would have been up 4%.

O'Sullivan added that the company's inventory is well-positioned for the holiday season. He noted that November is off to a good start and that the company is optimistic about prospects for the fourth quarter.

However, it's approaching the holiday season cautiously, and kept its guidance for same-store sales between flat and 2% growth. "We are ready to chase if the trend is stronger," O'Sullivan said.

Burlington guided for sales to increase between 5% and 7% in the fourth quarter. It also expects adjusted earnings per share in the range of $3.55 to $3.75. Analysts polled by FactSet expect $3.72 billion in sales, which would equate to a 4.8% increase from a year earlier, and $3.78 a share in adjusted earnings.

For fiscal 2024, the company predicts adjusted earnings per share will come in between $7.76 and $7.96. It had previously forecast adjusted earnings per share in the range of $7.66 to $7.96.

Looking ahead into 2025, Burlington expects sales to grow by high-single-digits through new stores, while comparable-sales growth is expected to range between flat and 2% growth.

O'Sullivan said on the earnings call the outlook is hard to predict between the economy, state of the consumer and the potential impact of tariffs, among other factors. But he reiterated that uncertainty and disruption offer a good setup for off-price retailers versus other forms of retail.

"We know that the best posture for us is to plan conservatively and be ready to chase. That is what we have done this year. This playbook has worked well for us," O'Sullivan said.

He believes any short-term uncertainty around the incoming Trump administration will come with opportunity. "The reason why uncertainty and disruption often work out well for off-price is that the off-price business model, when it's well-executed, is better able to handle the uncertainty and respond to whatever happens," he said.

He believes some new policies could potentially help Burlington, especially ones like lower taxes on overtime pay that boost spending power among its core customers.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

November 26, 2024 10:54 ET (15:54 GMT)

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