Burlington Stores (BURL) saw its stock plummet 5.27% during intraday trading on Thursday, as investors reacted to the company's disappointing second-quarter guidance and concerns about tariff pressures. The off-price retailer's shares took a hit despite reporting better-than-expected first-quarter earnings.
While Burlington's Q1 adjusted earnings per share of $1.67 beat analyst estimates of $1.41, the company's outlook for the second quarter fell short of expectations. Burlington forecasts Q2 adjusted EPS of $1.20-$1.30, below the consensus estimate of $1.35. This guidance, coupled with flat comparable store sales in Q1, appears to have dampened investor enthusiasm.
Adding to the bearish sentiment, CEO Michael O'Sullivan warned of significant pressure on merchandise margins due to tariffs. "We anticipate that tariffs will put significant pressure on our merchandise margin, but we are confident that, as long as tariffs do not increase from current levels, we can offset this pressure elsewhere in the P&L," O'Sullivan stated. This cautionary tone regarding tariffs seems to have heightened investor concerns about the company's future profitability.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.