Burlington Stores, Inc. reported third‑quarter 2025 results that included a revenue miss and an earnings beat. Net sales reached $2.71 billion, up 7% year‑over‑year, but fell slightly below the consensus estimate of $2.72 billion. The shortfall was driven by a modest decline in traffic after the back‑to‑school period, as CEO Michael O’Sullivan noted that unseasonably warm temperatures in key markets reduced footfall before a rebound as temperatures cooled.
Adjusted earnings per share rose 16% to $1.80, beating the consensus estimate of $1.59–$1.64 and delivering a $0.16–$0.21 absolute beat. The earnings outperformance was largely a result of disciplined cost management and margin expansion: merchandise margin improved by 10 basis points and freight costs fell by 20 basis points, offsetting the revenue shortfall and supporting profitability. Net income for the quarter was $105 million, up from $91 million a year earlier, reflecting the company’s ability to generate higher sales volumes while keeping operating expenses in check.
Gross margin for the quarter was 44.2%, a 30‑basis‑point lift from 43.9% in Q3 2024, driven by higher merchandise margins and lower freight costs. The company’s operating income grew to $105 million, and the adjusted EBIT margin increased by 60 basis points to 6.1%, underscoring effective cost control and pricing power in a competitive off‑price retail environment.
Burlington raised its full‑year 2025 guidance, lifting the adjusted EPS outlook to $9.69–$9.89 from the prior $9.50–$9.70 range. The guidance increase signals management’s confidence in sustaining margin expansion and sales momentum, even as the company navigates weather‑related traffic headwinds. The company also reaffirmed its plan to open 104 net new stores in fiscal 2025, a slight uptick from the 100‑store target previously cited, reflecting continued focus on geographic expansion.
Management highlighted the impact of weather on traffic, noting that “traffic fell significantly after the back‑to‑school period driven by unseasonably warm temperatures in our major markets, but rebounded as temperatures cooled.” The company also emphasized the role of its “Burlington 2.0” operational initiatives in driving cost efficiencies and margin improvement. Analysts noted that while the revenue miss and comparable store sales shortfall dampened market enthusiasm, the EPS beat and guidance raise were viewed as positive indicators of operational resilience.
Investors reacted to the results with a focus on the revenue miss and the 1% comparable store sales increase falling short of the 2.51% estimate. The market’s emphasis on top‑line growth over profitability highlights the current retail environment’s sensitivity to traffic and sales momentum, even as companies demonstrate strong margin performance.
The company’s inventory levels rose 15% year‑over‑year to $1.658 billion, with reserve inventory at 35%, indicating a moderate build in stock to support the upcoming holiday season. Burlington’s store count reached 1,211 locations after opening 73 new stores in Q3, positioning the retailer to capture additional market share in key regions.
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