Highlights:
On a GAAP basis, total sales declined 6%, net income was
Comparable store sales decreased 11%, with significant improvement coming out of August
On a Non-GAAP basis, Adjusted EPS was
Gross margin increased significantly to 45.0%, a 260 basis point improvement versus last year
Unrestricted cash and total liquidity were approximately
Fiscal 2020 Third Quarter Operating Results (for the 13 week period ended
Total sales decreased 6% to
Gross margin rate was 45.0% vs. last year's rate of 42.4%; this improvement was driven by a combination of lower markdowns and higher markup, which were partially offset by higher freight costs.
Product sourcing costs, which are included in selling, general and administrative expenses (SG&A), were
SG&A increased
The effective tax rate was 65.3% vs. 19.2% in last year's third quarter. The Adjusted Effective Tax Rate was 49.7% vs. last year's third quarter Adjusted Effective Tax Rate of 19.6%. The increase in the Adjusted Effective Tax Rate was primarily related to the decreased benefit recorded from estimated net operating losses carried back to five prior tax years, as permitted under the CARES Act.
Net income was
Diluted shares outstanding amounted to 66.7 million at the end of the quarter compared with 67.2 million at the end of last year's third quarter. The decrease was primarily the result of share repurchases under the Company's share repurchase program, prior to its suspension, which is discussed in more detail below. From the end of the third quarter of Fiscal 2019 through the suspension of our share repurchase program announced on
Adjusted EBITDA decreased
First Nine Months Fiscal 2020 Results
Total sales decreased 31% compared to the first nine months of Fiscal 2019. Net (loss) income decreased 244% compared to the prior year period to
Inventory
Merchandise inventories were
Liquidity
The Company ended the third quarter with
Share Repurchase Activity
The Company suspended its share repurchase program on
Outlook
Given the uncertainty surrounding the pace of the recovery of consumer demand, the Company's sales and earnings guidance for Fiscal 2020 (the 52-weeks ending
The following Fiscal 2020 guidance items have been re-issued or updated:
Capital expenditures, net of landlord allowances, are now expected to be approximately
The Company still expects to open 62 new stores, while now relocating or closing 28 stores, for a total of 34 net new stores in Fiscal 2020;
Depreciation & amortization, exclusive of favorable lease costs, is now expected to be approximately
Interest expense, net of non-cash interest of
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 Operating Margin), and Adjusted Effective Tax Rate. The Company believes these supplemental measures are useful in evaluating the performance of our business and provide greater transparency into our results of operations. In particular, we believe that excluding certain items that may vary substantially in frequency and magnitude from what we consider to be our core operating results are useful supplemental measures that assist in evaluating our 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.
Third Quarter 2020 Conference Call
The Company will hold a conference call on
A live webcast of the conference call will also be available on the investor relations page of the Company's website at www.burlingtoninvestors.com. For those unable to participate in the conference call, a replay will be available beginning 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 and our liquidity position and inventory plans, as well as statements made in the section 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 results to differ materially from those we expected, including general economic conditions; pandemics, including the duration of the COVID-19 pandemic and actions taken to slow its spread and the related impact on consumer confidence and spending; our ability to successfully implement one or more of our strategic initiatives and growth plans; the availability of desirable store locations on suitable terms; changing consumer preferences and demand; industry trends, including changes in buying, inventory and other business practices; competitive factors, including pricing and promotional activities of major competitors and an increase in competition within the markets in which we compete; the availability, selection and purchasing of attractive merchandise on favorable terms; import risks, including tax and trade policies, tariffs and government regulations; weather patterns, including, among other things, changes in year-over-year temperatures; our future profitability; our ability to control costs and expenses; unforeseen cyber-related problems or attacks; any unforeseen material loss or casualty; the effect of inflation; regulatory and tax changes; our relationships with employees; the impact of current and future laws and the interpretation of such laws; terrorist attacks, particularly attacks on or within markets in which we operate; natural and man-made disasters, including fire, snow and ice storms, flood, hail, hurricanes and earthquakes; our substantial level of indebtedness and related debt-service obligations; restrictions imposed by covenants in our debt agreements; availability of adequate financing; our dependence on vendors for our merchandise; domestic events affecting the delivery of merchandise to our stores; existence of adverse litigation; and each of the factors that may be described from time to time in our filings with the
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
See full release at: https://www.burlingtoninvestors.com/news-releases/news-release-details/burlington-stores-inc-reports-third-quarter-2020-earnings
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