Burlington Stores gains on better-than-feared Q3 results

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Burlington Stores (NYSE:BURL) reports comparable sales fell 17% in Q3 vs. -16.1% consensus.

Gross margin fell to 41.2% of sales vs. 41.4%. Merchandise margins decreased 90 basis points, partially offset by a 70 basis point improvement in freight expense.

"As an off-price retailer we should be able to perform better in this environment despite the significant macro headwinds. Recent results from other off-price retailers reinforce this view," noted CEO Michael O'Sullivan on the quarter.

Gross margin came in at 45.1% of sales vs. 43.2% consensus and operating margin was 3.5% of sales vs. 2.7% consensus.

Adjusted EBITDA was $123M vs. $205M a year ago.

Burlington Stores (BURL) ended the quarter with merchandise inventory of $1.45B, up 36% from a year ago. Comparable store inventories increased 8%.

Looking ahead, the retailer expects comparable store sales to decrease in the range of down 15% to down 14% for FY22. Adjusted EPS is seen falling in a range of $3.77 to $4.07 from prior view of 3.70 to $4.30 vs. consensus of $4.01.

Shares of Burlington Stores move up 3.97% in premarket action to $163.90.