Burlington Stores Inc. (NYSE:BURL) stock fell Thursday after the retailer reported fiscal second-quarter 2026 results. Strong earnings growth and improved margins were offset by a revenue miss and weak third-quarter guidance.
Total revenue rose about 11% year over year to $3.002 billion, missing the $3.020 billion estimate.
Adjusted earnings increased 38% to $2.37 per share, beating the $2.18 estimate. The figure excludes tariff refunds and certain costs tied to leases acquired through bankruptcy proceedings.
Earnings and Margins Strengthen
GAAP net income nearly doubled to $184 million from $94 million. Diluted earnings increased to $2.88 per share from $1.47.
The quarter marked Burlington’s 15th consecutive period of double-digit earnings growth.
Net sales rose 11% to $2.998 billion, while comparable-store sales increased 2%. Gross margin expanded 250 basis points to 46.2%.
Excluding a $55 million benefit from tariff refunds, merchandise margin improved by 70 basis points. Adjusted EBIT margin expanded 100 basis points.
Inventory, Liquidity and Buybacks
Merchandise inventory rose 9% to $1.541 billion. The increase reflected 149 net new stores and an 11% rise in comparable-store inventory. Reserve inventory accounted for 43% of the total.
Burlington ended the quarter with 1,287 stores. Operating cash flow totaled $334.6 million during the first half.
The retailer held $704 million in unrestricted cash and $1.646 billion in total liquidity. Debt stood at $1.914 billion.
Burlington repurchased 270,279 shares for $87 million. It had $218 million remaining under its buyback authorization.
Full-Year Outlook Raised
Burlington raised its fiscal 2026 adjusted earnings forecast to $11.77 to $11.97 per share from $11.45 to $11.80. The consensus estimate is $11.78.
The company also lifted its sales outlook to between $12.724 billion and $12.839 billion from its previous range of $12.607 billion to $12.838 billion. However, the new range remains below the $12.960 billion estimate.
Burlington plans to open about 115 net new stores and spend roughly $875 million on capital investments.
Third-Quarter Guidance Disappoints
During the earnings call, CEO Michael O’Sullivan said Burlington has grown more cautious about consumers. He noted that the sharp rise in gas prices that began in March has persisted, further stretching moderate- and lower-income households already struggling with elevated living costs.
For the third quarter, Burlington expects adjusted earnings of $1.60 to $1.70 per share, below the $2.03 estimate.
The company projected sales of $2.954 billion to $3.009 billion, compared with the $2.981 billion estimate.
The outlook includes $55 million in tariff refunds and planned reinvestment, resulting in a neutral impact on full-year earnings. Burlington plans to reinvest about 40% of the refunds in the third quarter and 60% in the fourth quarter.
BURL Price Action: Burlington Stores shares were trading 6.28% lower at $294.27 at the time of publication Thursday, according to Benzinga Pro.
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