MW How Burlington missed the mark on sales and bucked an off-price retail trend

By Tomi Kilgore

Although Burlington raised its full-year outlook again like its off-price peers, it also said warm weather in the wake of the back-to-school season hurt traffic to its stores

Burlington's stock is dropping after the company missed sales expectations, as unusually warm weather led to a significant drop in store traffic.

Shares of Burlington Stores Inc. slumped in early Tuesday trading, as the off-price retailer failed to follow in its peers' footsteps by reporting third-quarter sales that missed expectations.

The company $(BURL)$ said the problem for its quarter was that after the back-to-school season, foot traffic to its stores "fell off significantly" because of unseasonably warm weather in its major markets. Keep in mind that it was only about a dozen years ago that the company's retail-store brand name changed. It had been called Burlington Coat Factory.

But like its off-price peers, Burlington beat profit expectations and raised its full-year profit outlook for a second straight quarter, citing cost cuts and tariff-mitigation efforts.

An area that used to be dominated by lower-income shoppers, recent earnings reports from other discount retailers, such as TJ Maxx, HomeGoods and Marshalls parent TJX Cos. $(TJX)$ and Ross Stores Inc. $(ROST)$ showed that higher earners are now also taking part in the treasure-hunt shopping for which the chains are known.

Also read: Another off-price retailer just turned more optimistic about is future. Bargain hunting is the name of the game.

Still, Burlington's stock dropped 6.1% in premarket trading, which puts it on track to suffer its worst one-day post-earnings-report performance since the second quarter of 2023.

Total sales for the quarter ended Nov. 1 grew 7.1% to $2.71 billion, just below the average analyst estimate compiled by FactSet, $2.73 billion.

And comparable-store sales, or sales of stores open at last a year, increased 1%, while the FactSet consensus called for 2.6% growth.

But the profitability of those sales improved, with gross margins up to 44.2% from 43.9%, as freight expenses declined.

Net income jumped 15.6% to $104.8 million, while adjusted earnings per share, which excludes nonrecurring items, of $1.80 beat the FactSet consensus of $1.64.

The company also raised its full-year adjusted EPS guidance range to $9.69 to $9.89 from $9.19 to $9.59.

"Our merchandising and operating teams did an outstanding job mitigating the negative margin impact from tariffs," said Chief Executive Michael O'Sullivan. "We are passing along all of this third quarter upside to our full year 2025 earnings guidance."

And despite the total sales miss, the company nudged up its full-year sales growth outlook to 7% to 9% from 7% to 8%.

-Tomi Kilgore

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November 25, 2025 07:52 ET (12:52 GMT)

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