Burlington Shares Slip as Profit Beats, Outlook 'Unpredictable'

Burlington profit and revenue topped analyst estimates, but the retailer said its outlook remains 'uncertain and unpredictable.'
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Burlington Stores  (BURL) - Get Report shares were gently lower on Tuesday even as the apparel and home-goods retailer reported third-quarter profit and sales that topped analyst estimates. 

For the quarter ended Oct. 31 Burlington reported adjusted earnings of 29 cents a share, down from $1.53 a share in the year-earlier period. Revenue of $1.67 billion fell 6.4% from $1.78 billion. 

Analysts surveyed by FactSet were expecting adjusted earnings of 16 cents a share on revenue of $1.54 billion. 

"During the quarter, there were early signs of progress with our Burlington 2.0 Off-Price Full Potential Strategy, as we chased the sales trends, took advantage of great opportunistic buys, and turned our inventories rapidly," Chief Executive Michael O'Sullivan said in a statement.

"We were able to drive sales and also achieve a very healthy gross margin.

"Unfortunately, the outlook remains uncertain and unpredictable -- in fact the situation across the country with covid-19 appears to be deteriorating. 

"The fourth quarter has gotten off to a weak start with November month-to-date comparable store sales running down in the low double digits."

The third-quarter gross margin widened to 45% from 42.4% a year earlier, driven by a combination of lower markdowns and higher markups. 

Inventories in the quarter decreased 14% year over year to $867 million.

Burlington reduced its capital expenditures, net of landlord allowances, to $245 million. At the end of the first quarter, the company's second-quarter outlook was $400 million. 

Burlington shares at last check were off 0.6% to $228.56.