Burlington Stores, Inc. (NYSE:BURL) reported Thursday that first-quarter net income rose to $115 million. The off-price retailer earned $1.79 per diluted share, up from $1.58 per diluted share a year earlier.

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Q1 Results Beat Estimates

Adjusted EPS was $2.10, beating the $1.78 estimate. Sales were $2.856 billion, above the $2.799 billion estimate. Total sales rose 14% to $2.852 billion, while comparable store sales increased 6%.

"We are raising our full-year Fiscal 2026 sales and earnings guidance, passing through the entire upside from the first quarter to the full year. Our updated guidance is for comp store sales to increase 2% to 4%, and for EPS growth of 13% to 16%. These numbers underscore our ability to convert incremental comp sales into very strong earnings growth,” stated CEO Michael O'Sullivan.

Margins Expand On Sales Strength

Gross margin expanded 30 basis points to 44.1%, reflecting gains in merchandise margin and lower freight expense as a percentage of net sales.

SG&A was flat at 34.7% of net sales. Adjusted SG&A rose to 26.8% of net sales from 26.6% a year earlier, excluding expenses tied to bankruptcy-acquired leases.

Profitability improved in the quarter, with adjusted EBITDA rising to $284 million from $244 million. Adjusted EBIT increased to $179 million from $152 million, with adjusted EBIT margin expanding 20 basis points.

Inventory and Liquidity

Merchandise inventories increased 10% to $1.444 billion, driven by 127 net new stores and an 11% comparable-store inventory increase. Reserve inventory fell to 41% of total inventory from 48% a year earlier.

Burlington ended the quarter with $747.4 million in cash and $1.689 billion in liquidity, including $942 million of ABL facility availability.

Net cash provided by operating activities was $61.5 million, compared with net cash used in operating activities of $28.9 million a year earlier. Cash paid for property and equipment was $288.7 million.

Outlook Raised

Burlington raised its fiscal 2026 adjusted EPS outlook to $11.45 to $11.80 from $10.95 to $11.45. The outlook compares with the $11.56 estimate.

The company expects total sales to rise 9% to 11%, with comparable store sales up 2% to 4%.

Fiscal 2026 adjusted EBIT margin to expand 10 to 30 basis points, capital expenditures net of landlord allowances of about $875 million, and about 115 net new store openings.

For the second quarter, Burlington expects adjusted EPS of $2.05 to $2.20, above the $1.95 estimate.

It sees total sales rising 10% to 12%, comparable-store sales increasing 1% to 3%, and adjusted EBIT margin expanding by 30 to 60 basis points.

The company also cited import risks, including tax and trade policies, tariffs, and government regulations, among forward-looking risks.

BURL Price Action: Burlington Stores shares were trading 7.53% lower at $301.40 at publication on Thursday.

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