BURLINGTON STORES, INC. Highlights:
* All Fiscal 2021 comparisons are made versus the same period in Fiscal 2019
* For the fourth quarter of Fiscal 2021:
* On a GAAP basis, total sales increased 18%, net income was
* Comparable store sales increased 6%
* On a non-GAAP basis, Adjusted EPS was
For the full year Fiscal 2021:
* On a GAAP basis, total sales increased 28%, net income was
* On a non-GAAP basis, comparable store sales increased 15%, Adjusted EBIT increased 20%, and Adjusted EPS increased 14%
* Redeemed
* Resumed share repurchases and increased buyback authorization; bought back
Commenting on Q4, he went on, 'Ordinarily we would be happy with 6% comp growth in Q4 but compared to the rest of 2021 this was a slowdown in our trend. This slowdown was partially driven by lower traffic to our stores, due to a number of external factors, and partially driven by the late delivery of some critical receipts in December. There are specific actions that we have identified and that we can take to better manage these receipt issues going forward.'
Lastly, 'We think the outlook for retail spending in 2022 is extremely unpredictable especially as we lap government stimulus programs, and as general price inflation begins to bite. This kind of unpredictability has, in the past, tended to favor off-price. In 2022 we will plan our business conservatively but then be ready to chase and take advantage of opportunities.'
Fiscal 2021 Fourth Quarter Operating Results (for the 13-week period ended
Total sales increased 18% compared to the fourth quarter of Fiscal 2019 to
Gross margin rate was 39.8% vs. 42.1% for the fourth quarter of Fiscal 2019, a decrease of 230 basis points. Merchandise margins increased 30 basis points but were more than offset by 260 basis points of increased freight costs.
Product sourcing costs, which are included in selling, general and administrative expenses (SG&A), were
SG&A was 28.5% as a percentage of net sales vs. 27.0% in the fourth quarter of Fiscal 2019. Adjusted SG&A, as defined below, was 22.2% as a percentage of net sales vs. 22.7% in the fourth quarter of Fiscal 2019, an improvement of 50 basis points.
The effective tax rate was 31.8% vs. 24.0% in the fourth quarter of Fiscal 2019. The Adjusted Effective Tax Rate was 24.2% vs. 23.8% in the fourth quarter of Fiscal 2019.
Net income was
Diluted weighted average shares outstanding amounted to 67.6 million during the quarter compared with 67.0 million during the fourth quarter of Fiscal 2019.
Adjusted EBITDA was
Full Year Fiscal 2021 Results
Total sales increased 28% compared to Fiscal 2019. Net income decreased 12% to
Given the volatility in Fiscal 2020 results caused by COVID-19 and to assist with comparability, all fourth quarter and full year Fiscal 2021 comparisons are made versus the fourth quarter or full year Fiscal 2019. For a discussion of results for Fiscal 2021 as compared to Fiscal 2020, refer to our Annual Report on Form 10-K for the year ended
Inventory
Merchandise inventories were
Liquidity and Debt
The Company ended the fourth quarter of Fiscal 2021 with
During the fourth quarter, the Company extended the maturity of its ABL facility from
Convertible Note and Common Stock Repurchases
During the fourth quarter, the Company entered into privately negotiated transactions to repurchase approximately
In addition, during the fourth quarter the Company repurchased 344,492 shares of its common stock for
In
Outlook
Given the uncertainty surrounding the pace of the recovery of consumer demand and the ongoing COVID-19 pandemic, the Company is not providing sales or earnings guidance for Fiscal 2022 (the 52-weeks ending
The Company is issuing the following Fiscal 2022 guidance items:
Capital expenditures, net of landlord allowances, is expected to be approximately
The Company expects to open 120 new stores, while relocating or closing 30 stores, for a total of 90 net new stores in Fiscal 2022;
Depreciation & amortization, exclusive of favorable lease costs, is expected to be approximately
Interest expense is expected to be approximately
The effective tax rate is expected to be approximately 26% to 27%.
Note Regarding Non-GAAP Financial Measures
The foregoing discussion of the Company's operating results includes references to Adjusted SG&A, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Share (or Adjusted EPS), Adjusted EBIT (or Adjusted Operating Margin), and Adjusted Effective Tax Rate. The Company believes these supplemental measures are useful in evaluating the performance of its business and provide greater transparency into its results of operations. In particular, the Company believes that excluding certain items that may vary substantially in frequency and magnitude from what it considers to be its core operating results are useful supplemental measures that assist in evaluating its ability to generate earnings and leverage sales, and to more readily compare core operating results between past and future periods. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures later in this document.
Fourth Quarter 2021 Conference Call
The Company will hold a conference call on
For those unable to participate in the conference call, a replay will be available after the conclusion of the call on
About
For more information about the Company, visit www.burlington.com.
Investor Relations Contacts:
855-973-8445
Info@BurlingtonInvestors.com
203-682-8225
Safe Harbor for Forward-Looking and Cautionary Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this release, including those about our expected sales trend, our liquidity position, inventory plans, and the economic environment, as well as statements describing our outlook for future periods, are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. We do not undertake to publicly update or revise our forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from those we expected, including the impact of the COVID-19 pandemic and actions taken to slow its spread and the related impacts on economic activity, financial markets, labor markets and the global supply chain; general economic conditions, including inflation, and the related impact on consumer confidence and spending; competitive factors, including pricing and promotional activities of major competitors and an increase in competition within the markets in which we compete; weather patterns, including changes in year-over-year temperatures; the reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located; changing consumer preferences and demand; industry trends, including changes in buying, inventory and other business practices; natural and man-made disasters, including fire, snow and ice storms, flood, hail, hurricanes and earthquakes; our ability to successfully implement one or more of our strategic initiatives and growth plans; the availability, selection and purchasing of attractive merchandise on favorable terms; the availability of desirable store locations on suitable terms; industry trends, including changes in buying, inventory and other business practices; terrorist attacks, particularly attacks on or within markets in which we operate; our ability to attract, train and retain quality employees and temporary personnel in appropriate numbers; our ability to control costs and expenses; the solvency of parties with whom we do business and their willingness to perform their obligations to us; import risks, including tax and trade policies, tariffs and government regulations; our dependence on vendors for our merchandise; domestic and international events affecting the delivery of merchandise to our stores; unforeseen cyber-related problems or attacks; regulatory and tax changes; issues with merchandise safety and shrinkage; any unforeseen material loss or casualty or the existence of adverse litigation; the impact of current and future laws and the interpretation of such laws; our substantial level of indebtedness and related debt-service obligations; consequences of the failure to comply with covenants in our debt agreements; the availability of adequate financing; and each of the factors that may be described from time to time in our filings with the
(a) Net favorable lease costs represents the non-cash expense associated with favorable and unfavorable leases that were recorded as a result of purchase accounting related to theApril 13, 2006 Bain Capital acquisition ofBurlington Coat Factory Warehouse Corporation . These expenses are recorded in the line item 'Selling, general and administrative expenses' in our Condensed Consolidated Statements of Income (Loss).
(b) Represents non-cash accretion of original issue discount on the Convertible Notes. The original issue discount was eliminated as of the beginning of Fiscal 2021, as a result of adopting Accounting Standards Update 2020-06, 'Accounting for Convertible Instruments and Contracts in an Entity's Own Equity.'
(c) Represents costs incurred in connection with the review and execution of refinancing opportunities, as well as the issuance of the Secured Notes and Convertible Notes.
(d) Amounts relate to the partial repurchases of the Convertible Notes, the full redemption of the Secured Notes, as well as the refinancing of the Term Loan Facility.
(e) Represents amounts charged for certain litigation matters.
(f) Represents costs related to the closure of our e-commerce store.
(g) Tax effect is calculated based on the effective tax rates (before discrete items) for the respective periods, for the tax impact of items (a) through (f) The effective tax rate for Fiscal 2020 includes the benefit of loss carrybacks to prior years with higher statutory tax rates.
(h) Diluted weighted average shares outstanding starts with basic shares outstanding and adds back any potentially dilutive securities outstanding during the period.
(i) Includes favorable lease costs included in the line item 'Selling, general and administrative expenses' in our Condensed Consolidated Statements of Income (Loss). During the three months endedJanuary 29, 2022 ,January 30, 2021 andFebruary 1, 2020 , favorable lease costs were$4.7 million ,$5.6 million and$7.5 million , respectively. During the twelve months endedJanuary 29, 2022 ,January 30, 2021 andFebruary 1, 2020 , favorable lease costs were$21.9 million ,$23.9 million and$35.4 million , respectively.
See full release at: https://www.burlingtoninvestors.com/news-releases/news-release-details/burlington-stores-inc-reports-fourth-quarter-2021-results
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