Burlington Stores(BURL) - 2024 Q3 - Quarterly Report

Store Operations - As of October 28, 2023, the company operates 977 stores, having opened 65 new stores and closed 6 during the nine-month period[20] - The company has committed to open or relocate approximately 61 stores and one warehouse, with an estimated cost of $605.8 million[102] - The company plans to operate 2,000 stores over the long term, focusing on market opportunities and unit economics[161] Financial Performance - For the three months ended October 28, 2023, net sales increased by approximately$248.7 million, or 12.2%, to $2,284.7 million, driven by a 6$2,284,673, an increase of 12.2% compared to $2,035,927 for the same period in 2022[79] - Total revenue for the nine months ended October 28, 2023, reached$6,601,109, up 10.8% from $5,958,321 in the prior year[79] - Net income for the three months ended October 28, 2023, was$48.6 million, up from $16.8 million in the same period last year, primarily due to higher sales and increased gross margin rate[54] - Net income for the nine months ended October 28, 2023, was$112,191, compared to $44,923 for the same period in 2022, representing a significant increase[89] Profitability Metrics - Adjusted EBITDA for the three months ended October 28, 2023, increased by$53.0 million to $175.6 million, and for the nine months, it increased by$115.1 million to $473.7 million compared to the prior year[30] - Adjusted Net Income for the three months ended October 28, 2023, was$63.8 million, compared to $28.0 million for the same period in the prior year[28] - Adjusted EBIT for the three months ended October 28, 2023, increased by$44.5 million to $99.5 million, and for the nine months, it increased by$97.3 million to $253.9 million compared to the prior year[33] - The gross margin for the three months ended October 28, 2023, was 43.2$826.8 million, or 36.2% of net sales, compared to $726.9 million, or 35.7$99.9 million increase[44] - Store payroll as a percentage of net sales was 8.8% and 8.4% during the three and nine month periods ended October 28, 2023, respectively, compared to 8.1% for the same periods last year[37] - Cost of sales as a percentage of net sales decreased to 56.8% in Q3 Fiscal 2023 from 58.8% in Q3 Fiscal 2022, driven by increased merchandise margins and decreased freight costs[43] - Depreciation and amortization expense rose to $76.1 million in Q3 Fiscal 2023 from$67.6 million in Q3 Fiscal 2022, attributed to capital expenditures related to supply chain and new stores[45] Cash Flow and Liquidity - Net cash provided by operating activities increased to $270,196 for the nine months ended October 28, 2023, compared to$9,577 for the same period in 2022[89] - Cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of the period were $615,863, up from$435,165 at the end of the same period in 2022[89] - Net cash used in investing activities was $311,284 for the nine months ended October 28, 2023, compared to$319,111 for the same period in 2022[89] - Net cash used in financing activities decreased to $222,254 for the nine months ended October 28, 2023, from$352,974 for the same period in 2022[89] Debt and Financing - As of October 28, 2023, total debt obligations included $935.5 million under the Term Loan Facility and$453.2 million of Convertible Notes[216] - The borrowing rate related to the Term Loan Facility was 7.4% as of October 28, 2023[218] - The company issued $297.1 million of 1.25$650.0 million to $900.0 million, with$824.0 million available as of October 28, 2023[119][121] Tax and Compliance - Income tax expense increased to $18.3 million in Q3 Fiscal 2023 from$6.0 million in Q3 Fiscal 2022, with an effective tax rate of 27.4% compared to 26.4%[50] - The effective tax rate for the nine-month period ended October 28, 2023, was 26.3%, up from 20.5% in the prior year, due to higher pre-tax income and other factors[182] Inventory and Assets - Merchandise inventories increased to $1,329,129 as of October 28, 2023, from$1,181,982 as of January 28, 2023[85] - Total assets as of October 28, 2023, were $7,493,700, an increase from$7,269,597 as of January 28, 2023[85] - Inventory decreased to $1,329.1 million as of October 28, 2023, from$1,445.1 million at October 29, 2022, primarily due to reduced inventory in distribution centers[174] Shareholder Equity and Stock - As of October 28, 2023, total stockholders' equity is $850,476, with a net income of$42,386 for the quarter[98] - The company reported a net income per diluted share of $0.75 for the three months ended October 28, 2023, compared to$0.26 for the same period in 2022[79] - The total number of shares outstanding as of October 28, 2023, is 82,354,291, an increase from 82,326,476 shares in the previous quarter[98] - The company repurchased 748,720 shares of common stock for $129.3 million during the first three quarters of Fiscal 2023, with$718.0 million remaining under the share repurchase authorization[212] Market Conditions and Strategy - The U.S. retail industry faces margin pressure due to economic conditions, with consumers becoming more value-conscious amid inflation[51] - The company anticipates increased competition in the retail apparel and home furnishings markets, necessitating differentiation from competitors[68] - The company aims to enhance existing categories and introduce new categories to expand its offerings[160] - The company plans to optimize markdowns to maximize sales and gross margin dollars based on sales forecasts and sell-through targets[23]