Although it posted a loss, the second quarter wasn’t all bad for Burlington Stores, which beat a Wall Street earnings estimate and managed to drive sales in stores as they reopened, although inventory issues did emerge.
Net loss was $46.8 million, or 71 cents per diluted share, versus net income of $84.6 million, or $1.26 per diluted share, for the year-before quarter. Adjusted for one-time events, net loss was $37.2 million, or 56 cents per diluted share, versus net income of $91.4 million, or $1.36 per diluted share, in the year-earlier period.
A MarketBeat-published analyst consensus estimate for the second quarter called for a loss of $1.06 per adjusted diluted share.
Total sales decreased 39% to $1.01 billion in the quarter versus the year-prior period. Sales in re-opened stores—all stores that were opened prior to the end of the second quarter— decreased 14% from the date of their re-opening to the end of the period.
The company declined to offer comparable sales for the quarter, saying that the effects of the COVID-19 pandemic made the metric essentially meaningless.
Michael O’Sullivan, Burlington CEO, said, “The second quarter had some highs and some lows. The pace of our re-opening sales significantly exceeded our expectations, and we turned our aged spring merchandise very rapidly. This enabled us to go back into the market and take advantage of great merchandise availability. But we were not able to get these fresh receipts to our stores as quickly as we needed them. Our in-store inventories declined and our sales trend fell off dramatically in the back half of June. As we have re-built our store inventory levels over the last several weeks, we have seen significant improvement in our sales trend. We expect our trend to strengthen as we continue to replenish our store inventory levels, but we see a lot of risk in Q3. In this uncertain environment, we plan to manage our business conservatively. We have plenty of liquidity, and we will use this to support opportunistic buys of fall merchandise and of pack and hold inventory that we will flow to stores next year.”