Burlington Stores saw progress in its sales trends for the third quarter, but the pandemic related market conditions continued to weigh on the off-price retailer’s results.
Total sales in the third quarter ended October 31 decreased 6% to $1.6 billion, and comparable store sales declined 11%. While sales trends were challenging in August due to deficient inventory levels and delayed back to school purchases, comparable store sales trends improved significantly in the combined September and October time period as inventory levels recovered to more appropriate levels at the end of August and back to school demand improved, particularly in September, the company said.
Net income was $8 million, or $0.12 per share versus net income of $96 million, or $1.44 per share for the third quarter last year, and adjusted net income represented a profit of $20 million, or $0.29 per share vs. $103 million, or $1.53 per share last year. The decrease in adjusted net income was due primarily to the decline in sales and higher product sourcing costs, in each case driven by the disruptions related to the COVID-19 pandemic.
Michael O’Sullivan, CEO, Burlington Stores, said, “We were pleased with the progress we made in the third quarter. After a challenging start in August, our comparable store sales trend improved significantly to minus 4% in the combined September and October period. 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. We were able to drive sales and also achieve a very healthy gross margin.”
O’Sullivan added, “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. In this uncertain environment, we will continue to plan and manage our business conservatively. We have significant liquidity, and we will use this to maintain our flexibility to react to the trend, as well as to opportunistically build our reserve inventory.”