[10-Q] BURLINGTON STORES, INC. Quarterly Earnings Report
Burlington Stores reports operational priorities and capital actions in its quarterly filing. Management plans to drive comparable store sales by carrying leaner in-store inventories to increase turns and reduce markdowns, investing in merchandising capabilities, expanding and enhancing categories (including ladies', junior apparel, beauty and home), and pursuing a disciplined real estate strategy targeting about 100 net new stores per year to reach a long-term 2,000-store footprint (500 net new stores from Fiscal 2024–2028). The company disclosed share repurchase programs (a $500.0 million authorization in August 2023 and an additional $500.0 million authorization in Q2 Fiscal 2025) and noted $632.1 million remaining under repurchase authorizations. Compensation and equity activity included tax benefits of $5.9M and $10.1M for the three- and six-month periods ended August 2, 2025, RSU vesting intrinsic value of $44.9M, and performance awards vested intrinsic value of $23.3M. The filing also details financing and lease terms, convertible note settlement mechanics, and an extensive list of supply chain and geopolitical risks that could affect inventory and costs.
Burlington Stores indica nelle sue comunicazioni trimestrali le priorità operative e le azioni sul capitale. La direzione intende aumentare le vendite comparabili riducendo le scorte in negozio per aumentare la rotazione e diminuire gli sconti, investendo nelle capacità di merchandising, ampliando e valorizzando categorie come abbigliamento donna e junior, bellezza e casa, e seguendo una strategia immobiliare disciplinata che punta a circa 100 nuovi negozi netti all’anno per arrivare a un parco a lungo termine di 2.000 punti vendita (500 nuovi negozi netti nel periodo fiscale 2024–2028). La società ha reso note le operazioni di riacquisto azioni (un’autorizzazione di $500,0 milioni nell’agosto 2023 e un’ulteriore autorizzazione di $500,0 milioni nel secondo trimestre fiscale 2025) e ha segnalato $632,1 milioni residui sotto le autorizzazioni di riacquisto. In ambito compensi ed equity sono stati riportati benefici fiscali di $5,9M e $10,1M per i periodi di tre e sei mesi chiusi il 2 agosto 2025, un valore intrinseco di vesting RSU pari a $44,9M e un valore intrinseco di premi legati alle performance vestiti di $23,3M. Il documento descrive inoltre i termini di finanziamento e leasing, le modalità di regolamento delle note convertibili e un ampio elenco di rischi legati a supply chain e geopolitica che potrebbero influenzare inventario e costi.
Burlington Stores señala en su informe trimestral sus prioridades operativas y las medidas de capital. La dirección planea impulsar las ventas comparables manteniendo inventarios más reducidos en tienda para aumentar la rotación y reducir las rebajas, invirtiendo en capacidades de merchandising, ampliando y mejorando categorías (incluyendo moda femenina, junior, belleza y hogar) y adoptando una estrategia inmobiliaria disciplinada que busca aproximadamente 100 tiendas netas nuevas por año para alcanzar una red a largo plazo de 2.000 tiendas (500 tiendas netas nuevas en el periodo fiscal 2024–2028). La compañía divulgó programas de recompra de acciones (una autorización de $500,0 millones en agosto de 2023 y una autorización adicional de $500,0 millones en el segundo trimestre fiscal 2025) y señaló que quedan $632,1 millones bajo autorizaciones de recompra. En compensaciones y actividad de capital se incluyeron beneficios fiscales de $5,9M y $10,1M para los periodos de tres y seis meses finalizados el 2 de agosto de 2025, un valor intrínseco por vesting de RSU de $44,9M y un valor intrínseco de premios por desempeño ya adquiridos de $23,3M. El informe también detalla términos de financiamiento y arrendamiento, la mecánica de liquidación de notas convertibles y una extensa lista de riesgos de la cadena de suministro y geopolíticos que podrían afectar inventarios y costos.
Burlington Stores는 분기 보고서에서 운영 우선순위와 자본 관련 조치를 보고했습니다. 경영진은 매장 재고를 줄여 회전율을 높이고 가격 인하를 줄이는 방식으로 동종 매장 매출을 끌어올리고, 머천다이징 역량에 투자하며 여성복·주니어 의류, 뷰티, 홈 등 카테고리를 확장·강화하고, 연간 약 순증 100개 매장을 목표로 하는 신중한 점포 전략을 통해 장기적으로 2,000개 점포를 달성(2024~2028 회계연도에 순증 500개 포함)할 계획입니다. 회사는 주식 환매 프로그램(2023년 8월 승인된 $500.0백만 및 2025 회계연도 2분기에 추가 승인된 $500.0백만)을 공시했으며 환매 승인 잔액이 $632.1백만라고 밝혔습니다. 보상 및 지분 관련 사항으로는 2025년 8월 2일 종료된 3개월 및 6개월 기간에 대해 각각 $5.9M 및 $10.1M의 세금 혜택, RSU 베스팅의 내재가치 $44.9M, 성과 보상 베스팅의 내재가치 $23.3M이 보고되었습니다. 제출서류는 또한 자금조달 및 임대 조건, 전환사채 정산 방식, 재고 및 비용에 영향을 미칠 수 있는 공급망 및 지정학적 위험의 상세 목록을 담고 있습니다.
Burlington Stores expose dans son dépôt trimestriel ses priorités opérationnelles et ses actions en matière de capital. La direction entend stimuler les ventes comparables en réduisant les stocks en magasin afin d’augmenter la rotation et de diminuer les démarques, en investissant dans les capacités de marchandisage, en élargissant et valorisant des catégories telles que l’habillement féminin et junior, la beauté et la maison, et en poursuivant une stratégie immobilière disciplinée visant environ 100 nouveaux magasins nets par an pour atteindre à long terme un réseau de 2 000 magasins (500 magasins nets supplémentaires sur l’exercice 2024–2028). La société a indiqué des programmes de rachat d’actions (une autorisation de 500,0 M$ en août 2023 et une autorisation supplémentaire de 500,0 M$ au T2 de l’exercice 2025) et a précisé qu’il restait 632,1 M$ sous autorisations de rachat. Du côté des rémunérations et de l’équité, des avantages fiscaux de 5,9M$ et 10,1M$ ont été enregistrés pour les périodes de trois et six mois closes le 2 août 2025, la valeur intrinsèque des RSU vestés s’élève à 44,9M$ et celle des awards de performance vestés à 23,3M$. Le dépôt détaille aussi les modalités de financement et de location, les mécanismes de règlement des obligations convertibles et une longue liste de risques liés à la chaîne d’approvisionnement et à la géopolitique susceptibles d’impacter les stocks et les coûts.
Burlington Stores legt in der Quartalsmeldung seine operativen Prioritäten und Kapitalmaßnahmen dar. Das Management will die vergleichbaren Filialumsätze durch schlankere Ladenbestände steigern, um Umschlagshäufigkeit zu erhöhen und Abschreibungen zu verringern, in Merchandising-Fähigkeiten investieren, Kategorien wie Damen-, Junior-Bekleidung, Beauty und Home ausbauen und eine disziplinierte Immobilienstrategie verfolgen, die auf rund 100 netto neue Filialen pro Jahr abzielt, um langfristig 2.000 Filialen zu erreichen (500 netto neue Filialen im Fiskalzeitraum 2024–2028). Das Unternehmen gab Aktienrückkaufprogramme bekannt (eine Genehmigung über $500,0 Mio. im August 2023 und eine weitere Genehmigung über $500,0 Mio. im 2. Fiskalquartal 2025) und wies auf verbleibende Rückkaufberechtigungen in Höhe von $632,1 Mio. hin. Bei Vergütungen und Kapitalmaßnahmen wurden Steuerbenefits von $5,9M und $10,1M für die drei- bzw. sechsmonatigen Perioden zum 2. August 2025, ein RSU-Vesting-Intrinsic-Wert von $44,9M sowie ein Intrinsic-Wert für erfolgsabhängige Awards von $23,3M angegeben. Die Einreichung beschreibt zudem Finanzierungs- und Leasingbedingungen, Abwicklungsmechanismen für Wandelanleihen und eine umfassende Liste von Lieferketten- und geopolitischen Risiken, die Bestände und Kosten beeinflussen könnten.
- Authorizations for share repurchases totaling $1.0 billion (two $500.0M programs) with $632.1M remaining
- Clear store growth plan: target ~100 net new stores per year, long-term 2,000-store opportunity, and 500 net new stores from FY2024–FY2028
- Operational initiatives to carry leaner in-store inventories, invest in merchandising capability, optimize markdowns, and enhance store experience aimed at improving turns and margins
- Significant vested equity activity: restricted stock units vested intrinsic value $44.9M and performance-based awards vested intrinsic value $23.3M
- Reported tax benefits from non-cash stock compensation: $5.9M (three months) and $10.1M (six months) for period ended Aug 2, 2025
- Extensive supply chain and geopolitical risks identified (port disruptions, tariffs, labor instability, pandemics, natural disasters) that could materially affect inventory availability and costs
- Potential non-recurring charges cited including impairment charges on long-lived assets, costs related to debt amendments, litigation charges, and other unusual items that may depress adjusted earnings
- Convertible notes settlement mechanics and redemption restrictions (e.g., inability to redeem prior to Dec 20, 2025) create financing complexity and potential dilution or cash requirements
- Contingent lease rentals and variable lease costs (percentage rent, taxes, CAM) are excluded from lease liability and recognized as variable expense, adding volatility to occupancy costs
Insights
TL;DR: Expansion-capital mix and buyback capacity signal confidence, but financing terms and supply-chain risks temper near-term upside.
The filing highlights a dual focus on growth (targeting ~100 net new stores annually and a long-term 2,000-store opportunity) and shareholder returns via substantial repurchase authorizations with $632.1M remaining. Inventory discipline, merchandising investment, and markdown optimization are intended to improve gross margins and turns. Reported equity-based compensation vesting (RSUs $44.9M; performance awards $23.3M) and tax benefits ($5.9M three months; $10.1M six months) affect reported operating results and cash flows. The company discloses material financing features (convertible note settlement mechanics and loan terms) and potential non-recurring items (impairments, debt amendment costs) that could impact adjusted earnings. Overall, initiatives are constructive but contingent on execution and supply-chain stability.
TL;DR: Strategic emphasis on inventory turns, merchandising capability, and right-sized stores supports margin improvement if execution succeeds.
Management's plan to operate with leaner store inventories and invest in merchant capabilities is aligned with improving sell-through and reducing markdowns, which should enhance gross margin dollars per unit sold. The intent to relocate or downsize select stores and implement a smaller prototype supports a capital-efficient store growth path with a stated pace of ~100 net new stores annually. However, the filing explicitly lists extensive vendor, port, tariff, and geopolitical risks that could delay inventory flow or raise costs, making margin improvements sensitive to external disruptions.
Burlington Stores indica nelle sue comunicazioni trimestrali le priorità operative e le azioni sul capitale. La direzione intende aumentare le vendite comparabili riducendo le scorte in negozio per aumentare la rotazione e diminuire gli sconti, investendo nelle capacità di merchandising, ampliando e valorizzando categorie come abbigliamento donna e junior, bellezza e casa, e seguendo una strategia immobiliare disciplinata che punta a circa 100 nuovi negozi netti all’anno per arrivare a un parco a lungo termine di 2.000 punti vendita (500 nuovi negozi netti nel periodo fiscale 2024–2028). La società ha reso note le operazioni di riacquisto azioni (un’autorizzazione di $500,0 milioni nell’agosto 2023 e un’ulteriore autorizzazione di $500,0 milioni nel secondo trimestre fiscale 2025) e ha segnalato $632,1 milioni residui sotto le autorizzazioni di riacquisto. In ambito compensi ed equity sono stati riportati benefici fiscali di $5,9M e $10,1M per i periodi di tre e sei mesi chiusi il 2 agosto 2025, un valore intrinseco di vesting RSU pari a $44,9M e un valore intrinseco di premi legati alle performance vestiti di $23,3M. Il documento descrive inoltre i termini di finanziamento e leasing, le modalità di regolamento delle note convertibili e un ampio elenco di rischi legati a supply chain e geopolitica che potrebbero influenzare inventario e costi.
Burlington Stores señala en su informe trimestral sus prioridades operativas y las medidas de capital. La dirección planea impulsar las ventas comparables manteniendo inventarios más reducidos en tienda para aumentar la rotación y reducir las rebajas, invirtiendo en capacidades de merchandising, ampliando y mejorando categorías (incluyendo moda femenina, junior, belleza y hogar) y adoptando una estrategia inmobiliaria disciplinada que busca aproximadamente 100 tiendas netas nuevas por año para alcanzar una red a largo plazo de 2.000 tiendas (500 tiendas netas nuevas en el periodo fiscal 2024–2028). La compañía divulgó programas de recompra de acciones (una autorización de $500,0 millones en agosto de 2023 y una autorización adicional de $500,0 millones en el segundo trimestre fiscal 2025) y señaló que quedan $632,1 millones bajo autorizaciones de recompra. En compensaciones y actividad de capital se incluyeron beneficios fiscales de $5,9M y $10,1M para los periodos de tres y seis meses finalizados el 2 de agosto de 2025, un valor intrínseco por vesting de RSU de $44,9M y un valor intrínseco de premios por desempeño ya adquiridos de $23,3M. El informe también detalla términos de financiamiento y arrendamiento, la mecánica de liquidación de notas convertibles y una extensa lista de riesgos de la cadena de suministro y geopolíticos que podrían afectar inventarios y costos.
Burlington Stores는 분기 보고서에서 운영 우선순위와 자본 관련 조치를 보고했습니다. 경영진은 매장 재고를 줄여 회전율을 높이고 가격 인하를 줄이는 방식으로 동종 매장 매출을 끌어올리고, 머천다이징 역량에 투자하며 여성복·주니어 의류, 뷰티, 홈 등 카테고리를 확장·강화하고, 연간 약 순증 100개 매장을 목표로 하는 신중한 점포 전략을 통해 장기적으로 2,000개 점포를 달성(2024~2028 회계연도에 순증 500개 포함)할 계획입니다. 회사는 주식 환매 프로그램(2023년 8월 승인된 $500.0백만 및 2025 회계연도 2분기에 추가 승인된 $500.0백만)을 공시했으며 환매 승인 잔액이 $632.1백만라고 밝혔습니다. 보상 및 지분 관련 사항으로는 2025년 8월 2일 종료된 3개월 및 6개월 기간에 대해 각각 $5.9M 및 $10.1M의 세금 혜택, RSU 베스팅의 내재가치 $44.9M, 성과 보상 베스팅의 내재가치 $23.3M이 보고되었습니다. 제출서류는 또한 자금조달 및 임대 조건, 전환사채 정산 방식, 재고 및 비용에 영향을 미칠 수 있는 공급망 및 지정학적 위험의 상세 목록을 담고 있습니다.
Burlington Stores expose dans son dépôt trimestriel ses priorités opérationnelles et ses actions en matière de capital. La direction entend stimuler les ventes comparables en réduisant les stocks en magasin afin d’augmenter la rotation et de diminuer les démarques, en investissant dans les capacités de marchandisage, en élargissant et valorisant des catégories telles que l’habillement féminin et junior, la beauté et la maison, et en poursuivant une stratégie immobilière disciplinée visant environ 100 nouveaux magasins nets par an pour atteindre à long terme un réseau de 2 000 magasins (500 magasins nets supplémentaires sur l’exercice 2024–2028). La société a indiqué des programmes de rachat d’actions (une autorisation de 500,0 M$ en août 2023 et une autorisation supplémentaire de 500,0 M$ au T2 de l’exercice 2025) et a précisé qu’il restait 632,1 M$ sous autorisations de rachat. Du côté des rémunérations et de l’équité, des avantages fiscaux de 5,9M$ et 10,1M$ ont été enregistrés pour les périodes de trois et six mois closes le 2 août 2025, la valeur intrinsèque des RSU vestés s’élève à 44,9M$ et celle des awards de performance vestés à 23,3M$. Le dépôt détaille aussi les modalités de financement et de location, les mécanismes de règlement des obligations convertibles et une longue liste de risques liés à la chaîne d’approvisionnement et à la géopolitique susceptibles d’impacter les stocks et les coûts.
Burlington Stores legt in der Quartalsmeldung seine operativen Prioritäten und Kapitalmaßnahmen dar. Das Management will die vergleichbaren Filialumsätze durch schlankere Ladenbestände steigern, um Umschlagshäufigkeit zu erhöhen und Abschreibungen zu verringern, in Merchandising-Fähigkeiten investieren, Kategorien wie Damen-, Junior-Bekleidung, Beauty und Home ausbauen und eine disziplinierte Immobilienstrategie verfolgen, die auf rund 100 netto neue Filialen pro Jahr abzielt, um langfristig 2.000 Filialen zu erreichen (500 netto neue Filialen im Fiskalzeitraum 2024–2028). Das Unternehmen gab Aktienrückkaufprogramme bekannt (eine Genehmigung über $500,0 Mio. im August 2023 und eine weitere Genehmigung über $500,0 Mio. im 2. Fiskalquartal 2025) und wies auf verbleibende Rückkaufberechtigungen in Höhe von $632,1 Mio. hin. Bei Vergütungen und Kapitalmaßnahmen wurden Steuerbenefits von $5,9M und $10,1M für die drei- bzw. sechsmonatigen Perioden zum 2. August 2025, ein RSU-Vesting-Intrinsic-Wert von $44,9M sowie ein Intrinsic-Wert für erfolgsabhängige Awards von $23,3M angegeben. Die Einreichung beschreibt zudem Finanzierungs- und Leasingbedingungen, Abwicklungsmechanismen für Wandelanleihen und eine umfassende Liste von Lieferketten- und geopolitischen Risiken, die Bestände und Kosten beeinflussen könnten.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File Number
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The registrant had
BURLINGTON STORES, INC.
INDEX
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Page |
Part I—Financial Information |
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3 |
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Item 1. Financial Statements (unaudited) |
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Condensed Consolidated Statements of Income - Three and Six Months Ended August 2, 2025 and August 3, 2024 |
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Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended August 2, 2025 and August 3, 2024 |
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Condensed Consolidated Balance Sheets – August 2, 2025, February 1, 2025 and August 3, 2024 |
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Condensed Consolidated Statements of Cash Flows – Six Months Ended August 2, 2025 and August 3, 2024 |
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Notes to Condensed Consolidated Financial Statements |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. Controls and Procedures |
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Part II—Other Information |
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Item 1. Legal Proceedings |
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Item 1A. Risk Factors |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. Defaults Upon Senior Securities |
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Item 4. Mine Safety Disclosures |
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Item 5. Other Information |
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Item 6. Exhibits |
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SIGNATURES |
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2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
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Costs related to debt amendments |
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Impairment charges - long-lived assets |
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Other income - net |
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Total costs and expenses |
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Income before income tax expense |
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|
|
|
|
||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock - basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Common stock - diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
See Notes to Condensed Consolidated Financial Statements.
3
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(All amounts in thousands)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
August 2, |
|
|
August 3, |
|
|
August 2, |
|
|
August 3, |
|
||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other comprehensive loss, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate derivative contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized loss arising during the period |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net reclassification into earnings during the period |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other comprehensive loss, net of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total comprehensive income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
See Notes to Condensed Consolidated Financial Statements.
4
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(All amounts in thousands, except share and per share data)
|
|
August 2, |
|
|
February 1, |
|
|
August 3, |
|
|||
|
|
2025 |
|
|
2025 |
|
|
2024 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|||
Current assets: |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Accounts receivable—net |
|
|
|
|
|
|
|
|
|
|||
Merchandise inventories |
|
|
|
|
|
|
|
|
|
|||
Assets held for disposal |
|
|
|
|
|
|
|
|
|
|||
Prepaid and other current assets |
|
|
|
|
|
|
|
|
|
|||
Total current assets |
|
|
|
|
|
|
|
|
|
|||
Property and equipment—net |
|
|
|
|
|
|
|
|
|
|||
Operating lease assets |
|
|
|
|
|
|
|
|
|
|||
Tradenames |
|
|
|
|
|
|
|
|
|
|||
Goodwill |
|
|
|
|
|
|
|
|
|
|||
Deferred tax assets |
|
|
|
|
|
|
|
|
|
|||
Other assets |
|
|
|
|
|
|
|
|
|
|||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|||
Accounts payable |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Current operating lease liabilities |
|
|
|
|
|
|
|
|
|
|||
Other current liabilities |
|
|
|
|
|
|
|
|
|
|||
Current maturities of long term debt |
|
|
|
|
|
|
|
|
|
|||
Total current liabilities |
|
|
|
|
|
|
|
|
|
|||
Long term debt |
|
|
|
|
|
|
|
|
|
|||
Long term operating lease liabilities |
|
|
|
|
|
|
|
|
|
|||
Other liabilities |
|
|
|
|
|
|
|
|
|
|||
Deferred tax liabilities |
|
|
|
|
|
|
|
|
|
|||
(Note 11) |
|
|
|
|
|
|
|
|
|
|||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|||
Preferred stock, $ |
|
|
|
|
|
|
|
|
|
|||
Common stock, $ |
|
|
|
|
|
|
|
|
|
|||
Authorized: |
|
|
|
|
|
|
|
|
|
|||
Issued: |
|
|
|
|
|
|
|
|
|
|||
Outstanding: |
|
|
|
|
|
|
|
|
|
|||
Additional paid-in-capital |
|
|
|
|
|
|
|
|
|
|||
Accumulated earnings |
|
|
|
|
|
|
|
|
|
|||
Accumulated other comprehensive income |
|
|
|
|
|
|
|
|
|
|||
Treasury stock, at cost |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total stockholders' equity |
|
|
|
|
|
|
|
|
|
|||
Total liabilities and stockholders' equity |
|
$ |
|
|
$ |
|
|
$ |
|
|||
See Notes to Condensed Consolidated Financial Statements.
5
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(All amounts in thousands)
|
|
Six Months Ended |
|
|||||
|
|
August 2, |
|
|
August 3, |
|
||
|
|
2025 |
|
|
2024 |
|
||
OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Impairment charges—long-lived assets |
|
|
|
|
|
|
||
Amortization of deferred financing costs |
|
|
|
|
|
|
||
Accretion of long term debt instruments |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
|
||
Non-cash stock compensation expense |
|
|
|
|
|
|
||
Non-cash lease expense |
|
|
( |
) |
|
|
( |
) |
Cash received from landlord allowances |
|
|
|
|
|
|
||
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Merchandise inventories |
|
|
( |
) |
|
|
( |
) |
Prepaid and other current assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
( |
) |
|
|
|
|
Other current liabilities |
|
|
( |
) |
|
|
( |
) |
Other long term assets and long term liabilities |
|
|
( |
) |
|
|
|
|
Other operating activities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Cash paid for property and equipment |
|
|
( |
) |
|
|
( |
) |
Lease acquisition costs |
|
|
( |
) |
|
|
( |
) |
Net proceeds (removal costs) from sale of property and equipment and assets held for sale |
|
|
|
|
|
( |
) |
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Proceeds from long term debt—ABL Line of Credit |
|
|
|
|
|
— |
|
|
Principal payments on long term debt—ABL Line of Credit |
|
|
( |
) |
|
|
— |
|
Proceeds from long term debt—Term Loan Facility |
|
|
|
|
|
— |
|
|
Principal payments on long term debt—Term Loan Facility |
|
|
( |
) |
|
|
( |
) |
Principal payment on long term debt— 2025 Convertible Notes |
|
|
( |
) |
|
|
— |
|
Purchase of treasury shares |
|
|
( |
) |
|
|
( |
) |
Proceeds from stock option exercises |
|
|
|
|
|
|
||
Other financing activities |
|
|
( |
) |
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Decrease in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Interest paid |
|
$ |
|
|
$ |
|
||
Income tax payments - net |
|
$ |
|
|
$ |
|
||
Non-cash investing and financing activities: |
|
|
|
|
|
|
||
Finance lease modification |
|
$ |
— |
|
|
$ |
( |
) |
Accrued purchases of property and equipment |
|
$ |
|
|
$ |
|
||
See Notes to Condensed Consolidated Financial Statements.
6
BURLINGTON STORES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 2, 2025
(Unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
As of August 2, 2025, Burlington Stores, Inc., a Delaware corporation (collectively with its subsidiaries, the Company), through its indirect subsidiary Burlington Coat Factory Warehouse Corporation (BCFWC), operated
These unaudited Condensed Consolidated Financial Statements include the accounts of Burlington Stores, Inc. and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The Condensed Consolidated Financial Statements are unaudited, but in the opinion of management reflect all adjustments (which are of a normal and recurring nature) necessary for the fair presentation of the results of operations for the interim periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025 (Fiscal 2024 10-K). The balance sheet at February 1, 2025 presented herein has been derived from the audited Consolidated Financial Statements contained in the Fiscal 2024 10-K. Because the Company’s business is seasonal in nature, the operating results for the three and six month periods ended August 2, 2025 are not necessarily indicative of results for the fiscal year.
Accounting policies followed by the Company are described in Note 1, “Summary of Significant Accounting Policies,” included in Part II, Item 8 of the Fiscal 2024 10-K.
Fiscal Year
The Company defines its fiscal year as the 52 or 53-week period ending on the Saturday closest to January 31. Fiscal 2025 is defined as the 52-week year ending January 31, 2026, and Fiscal 2024 is defined as the 52-week year ended February 1, 2025. The first and second quarters of Fiscal 2025 and Fiscal 2024 each consist of 13 weeks.
Segment Reporting
The Company reports segment information in accordance with ASC Topic No. 280 “Segment Reporting,” and has
The Company is an off-price retailer that derives revenues from customers by providing a complete line of value-priced apparel, including: women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. The Company’s chief operating decision maker (CODM) is the of the Company.
7
|
|
(in thousands) |
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
August 2, |
|
|
August 3, |
|
|
August 2, |
|
|
August 3, |
|
||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product sourcing costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment expenses (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Costs related to debt amendments |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impairment charges - long-lived assets |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Other income - net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Recently Adopted Accounting Standards
There were no new accounting standards that had a material impact on the Company’s Condensed Consolidated Financial Statements and notes thereto during the three and six month periods ended August 2, 2025.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topics 740): Improvements to Income Tax Disclosures" (ASU 2023-09) to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the impact of ASU 2023-09 on its disclosures in the consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of income statement expenses" (ASU 2024-03), which requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 is effective for fiscal years
8
beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of ASU 2024-03 on its disclosures in the consolidated financial statements.
2. Stockholders’ Equity
Activity for the three and six month periods ended August 2, 2025 and August 3, 2024 in the Company’s stockholders’ equity is summarized below:
|
|
(in thousands, except share data) |
|
|||||||||||||||||||||||||||||
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Treasury Stock |
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Shares |
|
|
Amount |
|
|
Total |
|
||||||||
Balance at February 1, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock options exercised |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Shares used for tax withholding |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Shares issued as part of convertible debt settlement |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Shares purchased as part of publicly announced program, inclusive of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Vesting of restricted shares |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Unrealized losses on interest rate derivative contracts, net of related taxes of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Amount reclassified from accumulated other comprehensive income into earnings, net of related taxes of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at May 3, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock options exercised |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Shares used for tax withholding |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Shares purchased as part of publicly announced program, inclusive of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Vesting of restricted shares |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Unrealized losses on interest rate derivative contracts, net of related taxes of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Amount reclassified from accumulated other comprehensive income into earnings, net of related taxes of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at August 2, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
9
|
|
(in thousands, except share data) |
|
|||||||||||||||||||||||||||||
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Treasury Stock |
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Shares |
|
|
Amount |
|
|
Total |
|
||||||||
Balance at February 3, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock options exercised |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Shares used for tax withholding |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Shares purchased as part of publicly announced program, inclusive of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Vesting of restricted shares |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Unrealized gains on interest rate derivative contracts, net of related taxes of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Amount reclassified from accumulated other comprehensive income into earnings, net of related taxes of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at May 4, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock options exercised |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Shares used for tax withholding |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Shares purchased as part of publicly announced program, inclusive of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Vesting of restricted shares |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Unrealized gains on interest rate derivative contracts, net of related taxes of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Amount reclassified from accumulated other comprehensive income into earnings, net of related taxes of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at August 3, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
3. Lease Commitments
The Company’s leases primarily consist of stores, distribution facilities and office space under operating and finance leases that will expire principally during the next
The following is a schedule of the Company’s future lease payments:
|
|
(in thousands) |
|
|||||
Fiscal Year |
|
Operating |
|
|
Finance |
|
||
2025 (remainder) |
|
$ |
|
|
|
|
||
2026 |
|
|
|
|
|
|
||
2027 |
|
|
|
|
|
|
||
2028 |
|
|
|
|
|
|
||
2029 |
|
|
|
|
|
|
||
Thereafter |
|
|
|
|
|
|
||
Total future minimum lease payments |
|
|
|
|
|
|
||
Amount representing interest |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|||
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
||
Weighted average remaining lease term (years) |
|
|
|
|
|
|
||
10
The above schedule excludes approximately $
The following is a schedule of net lease costs for the periods indicated:
|
|
(in thousands) |
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
August 2, 2025 |
|
|
August 3, 2024 |
|
|
August 2, 2025 |
|
|
August 3, 2024 |
|
||||
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of finance lease asset (a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest on lease liabilities (b) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease cost (c) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease cost (c) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Gain) impairment on sale and leaseback transaction (d) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
Less all rental income (e) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total net rent expense (f) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Supplemental cash flow disclosures related to leases are as follows:
|
|
(in thousands) |
|
|||||
|
|
Six Months Ended |
|
|||||
|
|
August 2, 2025 |
|
|
August 3, 2024 |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Cash payments arising from operating lease liabilities (a) |
|
$ |
|
|
$ |
|
||
Cash payments for the principal portion of finance lease liabilities (b) |
|
$ |
|
|
$ |
|
||
Cash payments for the interest portion of finance lease liabilities (a) |
|
$ |
|
|
$ |
|
||
Supplemental non-cash information: |
|
|
|
|
|
|
||
Operating lease liabilities arising from obtaining right-of-use assets |
|
$ |
|
|
$ |
|
||
11
4. Long Term Debt
Long term debt consists of:
|
|
(in thousands) |
|
|||||||||
|
|
August 2, |
|
|
February 1, |
|
|
August 3, |
|
|||
|
|
2025 |
|
|
2025 |
|
|
2024 |
|
|||
Senior secured term loan facility, adjusted SOFR (with a floor of |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Convertible senior notes, |
|
|
— |
|
|
|
|
|
|
|
||
Convertible senior notes, |
|
|
|
|
|
|
|
|
|
|||
ABL senior secured revolving facility, SOFR plus spread based on average outstanding balance, matures on |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Unamortized deferred financing costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total debt |
|
|
|
|
|
|
|
|
|
|||
Less: current maturities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Long term debt, net of current maturities |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Term Loan Facility
BCFWC and certain of its subsidiaries and holding companies are party to a Credit Agreement (as amended, supplemented and otherwise modified, the Term Loan Facility) that provides for term loans in an aggregate principal amount as of August 2, 2025 of $
On September 24, 2024, the Company entered into an amendment to the Term Loan Facility, which among other things, (i) refinanced the outstanding $
On June 11, 2025, the Company entered into an amendment to the Term Loan Facility, which among other things, incurred $
The Term Loan Facility is collateralized by a first lien on BCFWC’s and each guarantor’s equity interests, equipment, intellectual property, and certain favorable leases and real estate, and certain related assets and proceeds thereof (subject to certain exceptions), and a second lien on BCFWC’s and each guarantor’s other assets and proceeds thereof (subject to certain exceptions).
At August 2, 2025 and August 3, 2024, the interest rate related to the Term Loan Facility was
2025 Convertible Notes
On April 16, 2020, the Company issued its 2025 Convertible Notes, which matured on
Prior to maturity, holders of the 2025 Convertible Notes submitted conversion notices with respect to approximately $
12
amount. At maturity, the Company paid in cash the principal balance and related accrued and unpaid interest on the 2025 Convertible Notes not previously converted. There was
2027 Convertible Notes
On September 12, 2023, the Company closed the issuance of approximately $
The 2027 Convertible Notes bear interest at a rate of
Prior to the close of business on the business day immediately preceding September 15, 2027, the 2027 Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods. Thereafter, the 2027 Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The 2027 Convertible Notes have an initial conversion rate of
If the Company undergoes a fundamental change, subject to certain conditions, holders of the 2027 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2027 New Convertible Notes. The fundamental change repurchase price will be
ABL Line of Credit
BCFWC and certain of its subsidiaries and holding companies are party to a Second Amended and Restated Credit Agreement (as amended, supplemented and otherwise modified, the ABL Line of Credit) that provides for $
On July 25, 2025, the Company entered into an amendment to the ABL Line of Credit in order to, among other things, (i) increase the aggregate principal amount of the commitments from $
13
At August 2, 2025, the Company had $
At August 3, 2024, the Company had $
5. Derivative Instruments and Hedging Activities
The Company accounts for derivatives and hedging activities in accordance with ASC 815, “Derivatives and Hedging” (ASC 815). As required by ASC 815, the Company records all derivatives on the balance sheet at fair value and adjusts to market on a quarterly basis. In addition, to comply with the provisions of ASC 820, “Fair Value Measurements” (ASC 820), credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered any applicable credit enhancements such as collateral postings, thresholds, mutual puts, and guarantees. In accordance with ASC 820, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. The Company classifies its derivative valuations in Level 2 of the fair value hierarchy.
On September 27, 2024, the Company terminated the previous $
On June 12, 2025, the Company entered into an interest rate swap agreement with a notional amount of $
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
As of August 2, 2025, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Interest Rate Derivative |
|
Number of |
|
Notional Aggregate |
|
Interest Swap Rate |
|
Maturity Date |
Interest rate swap contract |
|
|
$ |
|
|
Tabular Disclosure
The table below presents the fair value of the Company’s derivative financial instruments on a gross basis as well as their classification on the Company’s Condensed Consolidated Balance Sheets:
|
|
(in thousands) |
|
|||||||||||||||
|
|
Fair Values of Derivative Instruments |
|
|||||||||||||||
|
|
August 2, 2025 |
|
|
February 1, 2025 |
|
|
August 3, 2024 |
|
|||||||||
Derivatives Designated as Hedging Instruments |
|
Balance |
|
Fair |
|
|
Balance |
|
Fair |
|
|
Balance |
|
Fair |
|
|||
Interest rate swap contracts |
|
Other assets |
|
$ |
|
|
Other assets |
|
$ |
|
|
Other assets |
|
$ |
|
|||
Interest rate swap contracts |
|
Other liabilities |
|
$ |
|
|
Other liabilities |
|
$ |
— |
|
|
Other liabilities |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
14
The following table presents the unrealized gains and losses deferred to accumulated other comprehensive income resulting from the Company’s derivative financial instruments for each of the reporting periods.
|
|
(in thousands) |
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
Interest Rate Derivatives: |
|
August 2, 2025 |
|
|
August 3, 2024 |
|
|
August 2, 2025 |
|
|
August 3, 2024 |
|
||||
Unrealized losses, before taxes |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized losses, net of taxes |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The following table presents information about the reclassification of gains and losses from accumulated other comprehensive income into earnings related to the Company’s derivative instruments for each of the reporting periods.
|
|
(in thousands) |
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
Component of Earnings: |
|
August 2, 2025 |
|
|
August 3, 2024 |
|
|
August 2, 2025 |
|
|
August 3, 2024 |
|
||||
Interest benefit |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net reclassification into earnings |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The Company estimates that approximately $
6. Fair Value Measurements
The Company accounts for fair value measurements in accordance with ASC 820, which defines fair value, establishes a framework for measurement and expands disclosure about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price), and classifies the inputs used to measure fair value into the following hierarchy:
Level 1: Quoted prices for identical assets or liabilities in active markets.
Level 2: Quoted market prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3: Pricing inputs that are unobservable for the assets and liabilities and include situations where there is little, if any, market activity for the assets and liabilities.
The inputs into the determination of fair value require significant management judgment or estimation.
The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments.
Refer to Note 5, “Derivative Instruments and Hedging Activities,” for further discussion regarding the fair value of the Company’s interest rate swap contracts.
Financial Assets
The fair values of the Company’s financial assets and the hierarchy of the level of inputs as of August 2, 2025, February 1, 2025 and August 3, 2024 are summarized below:
|
|
(in thousands) |
|
|||||||||
|
|
Fair Value Measurements at |
|
|||||||||
|
|
August 2, |
|
|
February 1, |
|
|
August 3, |
|
|||
|
|
2025 |
|
|
2025 |
|
|
2024 |
|
|||
Level 1 |
|
|
|
|
|
|
|
|
|
|||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|||
15
Long-lived assets are measured at fair value on a non-recurring basis for purposes of calculating impairment using the fair value hierarchy of ASC 820. The fair value of the Company’s long-lived assets is calculated using a discounted cash-flow model that used level 3 inputs. In calculating future cash flows, the Company makes estimates regarding future operating results and market rent rates, based on its experience and knowledge of market factors in which the retail location is located.
Impairment charges on long-lived assets were $
Impairment charges on long-lived assets were $
Financial Liabilities
The fair values of the Company’s financial liabilities are summarized below:
|
|
(in thousands) |
|
|||||||||||||||||||||
|
|
August 2, 2025 |
|
|
February 1, 2025 |
|
|
August 3, 2024 |
|
|||||||||||||||
|
|
Principal |
|
|
Fair |
|
|
Principal |
|
|
Fair |
|
|
Principal |
|
|
Fair |
|
||||||
Term Loan Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
2025 Convertible Notes |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2027 Convertible Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
ABL Line of Credit (a) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total debt (b) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
The fair values presented herein are based on pertinent information available to management as of the respective period end dates. The estimated fair values of the Company’s debt are classified as Level 2 in the fair value hierarchy, and are based on current market quotes received from inactive markets.
7. Income Taxes
Income tax expense was $
Income tax expense was $
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, extending certain provisions of the 2017 Tax Cuts and Jobs Act, including federal bonus depreciation and deductions related to domestic research and development expenditures. OBBBA had no material impact on the Company's Condensed Consolidated Statements of Income for the three and six-month periods ended August 2, 2025. The act resulted in a reclassification of certain tax liabilities from current to deferred liabilities on the Company's Condensed Consolidated Balance Sheet as of August 2, 2025.
Net deferred taxes are as follows:
|
|
(in thousands) |
|
|||||||||
|
|
August 2, |
|
|
February 1, |
|
|
August 3, |
|
|||
|
|
2025 |
|
|
2025 |
|
|
2024 |
|
|||
Deferred tax asset |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Deferred tax liability |
|
|
|
|
|
|
|
|
|
|||
Net deferred tax liability |
|
$ |
|
|
$ |
|
|
$ |
|
|||
16
Net deferred tax assets relate to Puerto Rico deferred balances that have a future net benefit for tax purposes. Net deferred tax liabilities primarily relate to intangible assets and depreciation expense where the Company has a future obligation for tax purposes.
As of August 2, 2025, the Company had a deferred tax asset related to net operating losses of $
As of August 2, 2025, the Company has tax credit carry-forwards totaling $
As of August 2, 2025, February 1, 2025 and August 3, 2024, valuation allowances totaled $
8. Capital Stock
Treasury Stock
The Company accounts for treasury stock under the cost method.
Shares Used to Satisfy Tax Withholding
During the six month period ended August 2, 2025, the Company acquired
Share Repurchase Program
On August 15, 2023, the Company's Board of Directors authorized the repurchase of up to $
On May 20, 2025, the Company's Board of Directors authorized the repurchase of up to an additional $
During the six month period ended August 2, 2025, the Company repurchased
9. Net Income Per Share
Basic net income per share is calculated by dividing net income by the weighted-average number of common shares outstanding. Diluted net income per share is calculated by dividing net income by the weighted-average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method for the Company’s stock option and
17
restricted stock unit awards, and the if-converted method for the Convertible Notes.
|
|
(in thousands, except per share data) |
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
August 2, |
|
|
August 3, |
|
|
August 2, |
|
|
August 3, |
|
||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Basic net income per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted average number of common shares – basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per common share – basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted net income per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Shares for basic and diluted net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares – basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assumed exercise of stock options and vesting of restricted stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assumed conversion of convertible debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares – diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per common share – diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Approximately
Approximately
10. Stock Based Compensation
On May 20, 2025, the Company’s stockholders approved an amendment to the Company's 2022 Omnibus Incentive Plan to, among other things, increase the number of shares of Company common stock subject to the plan by
As of August 2, 2025, there were
Non-cash stock compensation expense is as follows:
|
|
(in thousands) |
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
August 2, |
|
|
August 3, |
|
|
August 2, |
|
|
August 3, |
|
||||
Type of Non-Cash Stock Compensation |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Restricted stock unit grants (a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Stock option grants (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performance stock unit grants (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total (b) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
18
Stock Options
Stock option transactions during the six month period ended August 2, 2025 are summarized as follows:
|
|
Number of |
|
|
Weighted |
|
||
Options outstanding, February 1, 2025 |
|
|
|
|
$ |
|
||
Options granted |
|
|
|
|
|
|
||
Options exercised (a) |
|
|
( |
) |
|
|
|
|
Options forfeited |
|
|
( |
) |
|
|
|
|
Options outstanding, August 2, 2025 |
|
|
|
|
|
|
||
The following table summarizes information about the stock options vested and expected to vest during the contractual term of such options as of August 2, 2025:
|
|
Options |
|
|
Weighted |
|
|
Weighted |
|
|
Aggregate |
|
||||
Options vested and expected to vest |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
Options exercisable |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
The fair value of each stock option granted during the six month period ended August 2, 2025 was estimated using the Black Scholes option pricing model using the following assumptions on a weighted average basis:
|
|
|
Six Months Ended |
|
|
|
August 2, |
|
|
|
2025 |
Risk-free interest rate |
|
|
|
Expected volatility |
|
|
|
Expected life (years) |
|
|
|
Contractual life (years) |
|
|
|
Expected dividend yield |
|
|
|
Grant date fair value of options issued |
|
$ |
The expected dividend yield was based on the Company’s expectation of not paying dividends in the near term. To evaluate its volatility factor, the Company uses the historical volatility of its stock price over the expected life of the options. The risk free interest rate was based on the U.S. Treasury rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the awards being valued. The expected life of the options was estimated using historical exercise rates.
Restricted Stock Units
Restricted stock unit transactions during the six month period ended August 2, 2025 are summarized as follows:
|
|
Number of |
|
|
Weighted |
|
||
Non-vested awards outstanding, February 1, 2025 |
|
|
|
|
$ |
|
||
Awards granted |
|
|
|
|
|
|
||
Awards vested (a) |
|
|
( |
) |
|
|
|
|
Awards forfeited |
|
|
( |
) |
|
|
|
|
Non-vested awards outstanding, August 2, 2025 |
|
|
|
|
|
|
||
19
The fair value of each share of restricted stock granted during the six month period ended August 2, 2025 was based upon the closing price of the Company’s common stock on the grant date.
Performance Stock Units
The Company grants performance-based restricted stock units to its senior executives. Vesting of the performance stock units are based on continued service and the achievement of specified pre-established adjusted net income per share growth over a three-year performance period, as applicable for each grant. Based on the Company’s achievement of these goals, each award may be earned up to
Performance stock unit transactions during the six month period ended August 2, 2025 are summarized as follows:
|
|
Number of |
|
|
Weighted |
|
||
Non-vested awards outstanding, February 1, 2025 |
|
|
|
|
$ |
|
||
Awards granted |
|
|
|
|
|
|
||
Awards vested (a) |
|
|
( |
) |
|
|
|
|
Awards forfeited |
|
|
( |
) |
|
|
|
|
Non-vested awards outstanding, August 2, 2025 |
|
|
|
|
|
|
||
11. Commitments and Contingencies
Legal
In the course of business, the Company is party to class or collective actions alleging violations of federal and state wage and hour and other labor statutes, representative claims under the California Private Attorneys’ General Act and various other lawsuits and regulatory proceedings from time to time including, among others, commercial, product, employee, customer, intellectual property, privacy and other claims. Actions against us are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties. While no assurance can be given as to the ultimate outcome of these matters, the Company believes that the final resolution of these actions will not have a material adverse effect on the Company’s results of operations, financial position, liquidity or capital resources.
Letters of Credit
The Company had letters of credit arrangements with various banks in the aggregate amount of $
Purchase Commitments
The Company had $
20
21
BURLINGTON STORES, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion summarizes the significant factors affecting our condensed consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included elsewhere in this report and the Consolidated Financial Statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 (Fiscal 2024 10-K).
In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations and intentions. Our actual results or other events may differ materially from those anticipated in these forward-looking statements due to various factors, including those discussed under the section of this Item 2 entitled “Safe Harbor Statement.”
Executive Summary
Introduction
We are a nationally recognized off-price retailer of high-quality, branded merchandise at everyday low prices. We opened our first store in Burlington, New Jersey in 1972, selling primarily coats and outerwear. Since then, we have expanded our store base to 1,138 stores as of August 2, 2025 in 46 states, Washington D.C. and Puerto Rico. We have diversified our product categories by offering an extensive selection of in-season, high-quality branded merchandise at up to 60% off other retailers’ prices, including: fashion-focused women’s apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats.
Fiscal Year
Fiscal 2025 is defined as the 52-week year ended January 31, 2026. Fiscal 2024 is defined as the 52-week year ending February 1, 2025. The first and second quarters of Fiscal 2025 and Fiscal 2024 each consist of 13 weeks.
Store Openings, Closings, and Relocations
During the six month period ended August 2, 2025, we opened 44 new stores, inclusive of eight relocations, and permanently closed six stores, exclusive of the aforementioned relocations, bringing our store count as of August 2, 2025 to 1,138 stores.
Ongoing Initiatives for Fiscal 2025
We continue to focus on a number of ongoing initiatives aimed at increasing our overall profitability. These initiatives include, but are not limited to:
We strive to increase comparable store sales through the following initiatives:
22
We intend to expand and enhance our retail store base through the following initiatives:
We intend to increase our operating margins through the following initiatives:
Uncertainties and Challenges
As we strive to increase profitability, there are uncertainties and challenges that we face that could have a material impact on our revenues or income. Some of these uncertainties and challenges are summarized below. For a further discussion, please refer to the description under the heading “Risk Factors” in the Fiscal 2024 10-K and in Part II, Item 1A below.
General Economic Conditions. There remains a high level of uncertainty in the current macroeconomic and geopolitical environments, and prolonged inflationary pressures continue to negatively impact the discretionary spending of the low-income shopper, our core customer. In addition to inflation, consumer spending habits, including spending for the merchandise that we sell, are affected by, among other things, prevailing global economic conditions, the costs of basic necessities and other goods, levels of employment, salaries and wage rates, prevailing interest rates, reductions in government benefits and lower tax refunds, housing costs, energy costs, commodities pricing, income tax rates and policies, immigration policies, consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns are generally influenced by consumers’ disposable income, credit availability and debt levels.
23
A broad, protracted slowdown or downturn in the U.S. economy, an extended period of high unemployment or inflation rates, an uncertain domestic or global economic outlook or a financial crisis could adversely affect consumer spending habits resulting in lower net sales and profits than expected on a quarterly or annual basis. Conversely, if inflation declines, it could benefit our core customers who have been impacted by higher cost of living, and if economic growth slows, it could cause moderate and higher-income shoppers to become more value conscious. Either of these developments, if they occur, would be expected to improve our business. Consumer confidence is also affected by the domestic and international political situation. Our financial condition and operations could be impacted by changes in government regulations, initiatives or programs in areas including, but not limited to, trade and tariffs, taxes, healthcare, and immigration. In addition, trade and tariff regulations have had and are expected to continue to have an indirect impact on consumer prices. We will continue to monitor changes in tariff policy and the impact of these changes on our industry and the economy and seek to adjust to these changes as efficiently as possible. The outbreak or escalation of war, or the occurrence of terrorist acts or other hostilities in or affecting the U.S., or public health issues such as pandemics or epidemics, could lead to a decrease in spending by consumers. In addition, natural disasters, public health issues, industrial accidents and acts of war or conflicts in various parts of the world (such as the conflict in Ukraine or the conflict in the Middle East), could have the effect of disrupting supplies and raising prices globally which, in turn, may have adverse effects on the world and U.S. economies and lead to a downturn in consumer confidence and spending.
Seasonality of Sales and Weather Conditions. Our business, like that of most retailers, is subject to seasonal influences. In the second half of the year, which includes the back-to-school and holiday seasons, we generally realize a higher level of sales and net income.
Weather continues to be a contributing factor to the sale of our merchandise. Generally, our sales are higher if the weather is cold during the Fall and warm during the early Spring. Sales of cold weather clothing are generally increased by early cold weather during the Fall, while sales of warm weather clothing are generally increased by early warm weather conditions in the Spring. Although we have diversified our product offerings, we believe traffic to our stores is still driven, in part, by weather patterns.
Competition and Margin Pressure. We believe that in order to remain competitive with retailers, including off-price retailers and discount stores, we must continue to offer brand-name merchandise at a discount to prices offered by other retailers as well as an assortment of merchandise that is appealing to our customers.
The U.S. retail apparel and home furnishings markets are highly fragmented and competitive. We compete for business with department stores, off-price retailers, internet retailers, specialty stores, discount stores, wholesale clubs, and outlet stores as well as with certain traditional, full-price retail chains that have developed off-price concepts. At various times throughout the year, traditional full-price department store chains and specialty shops offer brand-name merchandise at substantial markdowns, which can result in prices approximating those offered by us at our Burlington Stores. We anticipate that competition will increase in the future. Therefore, we will continue to look for ways to differentiate our stores from those of our competitors.
The U.S. retail industry continues to face increased pressure on margins as overall challenging retail conditions have led consumers to be more value conscious. Additionally, lower-to-moderate income shoppers continue to face economic pressure due to higher cost of living. Our strategy to chase the sales trend allows us the flexibility to purchase less pre-season merchandise with the balance purchased in-season and opportunistically. It also provides us with the flexibility to shift purchases between suppliers and categories. We believe that this enables us to obtain better terms with our suppliers, which we expect will help offset any rising costs of goods.
Key Performance and Non-GAAP Measures
We consider numerous factors in assessing our performance. Key performance and non-GAAP measures used by management include net income, Adjusted Net Income, Adjusted EBITDA, Adjusted EBIT, comparable store sales, gross margin, inventory, and liquidity.
Net income. We earned net income of $94.2 million during the three month period ended August 2, 2025 compared with net income of $73.8 million during the three month period ended August 3, 2024. We earned net income of $195.0 million during the six month period ended August 2, 2025 compared with a net income of $152.3 million during the six month period ended August 3, 2024. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.
Adjusted Net Income, Adjusted EBITDA and Adjusted EBIT: Adjusted Net Income, Adjusted EBITDA and Adjusted EBIT are non-GAAP financial measures of our performance.
24
We define Adjusted Net Income as net income, exclusive of the following items, if applicable: (i) net favorable lease costs; (ii) costs related to debt amendments; (iii) impairment charges; (iv) amounts related to certain litigation matters; and (v) other unusual or non-recurring expenses, losses, charges or gains, all of which are tax effected to arrive at Adjusted Net Income.
We define Adjusted EBITDA as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) costs related to debt amendments; (iv) income tax expense; (v) depreciation and amortization; (vi) net favorable lease costs; (vii) impairment charges; (viii) amounts related to certain litigation matters; and (ix) other unusual or non-recurring expenses, losses, charges or gains.
We define Adjusted EBIT as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) costs related to debt amendments; (iv) income tax expense; (v) impairment charges; (vi) net favorable lease costs; (vii) amounts related to certain litigation matters; and (viii) other unusual or non-recurring expenses, losses, charges or gains.
We present Adjusted Net Income, Adjusted EBITDA and Adjusted EBIT because we believe they are useful supplemental measures 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 investors and management in evaluating our ability to generate earnings and leverage sales, and to more readily compare core operating results between past and future periods.
We believe that these non-GAAP measures provide investors helpful information with respect to our operations and financial condition. Other companies in the retail industry may calculate these non-GAAP measures differently such that our calculation may not be directly comparable.
Adjusted Net Income has limitations as an analytical tool, and should not be considered either in isolation or as a substitute for net income or other data prepared in accordance with GAAP. Among other limitations, Adjusted Net Income does not reflect the following items, net of their tax effect:
During the three and six months ended August 2, 2025, Adjusted Net Income increased $24.3 million to $101.8 million and increased $40.0 million to $204.3 million, respectively, compared to the same periods in the prior year. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.
The following table shows our reconciliation of net income to Adjusted Net Income for the three and six months ended August 2, 2025 compared with the three and six months ended August 3, 2024:
|
|
|
|
|||||||||||||
|
|
(in thousands) |
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
August 2, |
|
|
August 3, |
|
|
August 2, |
|
|
August 3, |
|
||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Reconciliation of net income to Adjusted Net Income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
94,185 |
|
|
$ |
73,760 |
|
|
$ |
195,018 |
|
|
$ |
152,274 |
|
Net favorable lease costs (a) |
|
|
1,932 |
|
|
|
3,138 |
|
|
|
4,070 |
|
|
|
6,108 |
|
Costs related to debt amendments (b) |
|
|
— |
|
|
|
— |
|
|
|
112 |
|
|
|
— |
|
Impairment charges - long-lived assets |
|
|
1,580 |
|
|
|
— |
|
|
|
2,095 |
|
|
|
8,210 |
|
Litigation matters (c) |
|
|
6,750 |
|
|
|
1,925 |
|
|
|
6,334 |
|
|
|
1,925 |
|
Tax effect (d) |
|
|
(2,690 |
) |
|
|
(1,336 |
) |
|
|
(3,290 |
) |
|
|
(4,217 |
) |
Adjusted Net Income |
|
$ |
101,757 |
|
|
$ |
77,487 |
|
|
$ |
204,339 |
|
|
$ |
164,300 |
|
25
Adjusted EBIT and Adjusted EBITDA have limitations as analytical tools, and should not be considered either in isolation or as a substitute for net income or other data prepared in accordance with GAAP. Among other limitations, Adjusted EBIT does not reflect:
Adjusted EBITDA is further adjusted for depreciation and amortization. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will likely have to be replaced in the future.
During the three and six months ended August 2, 2025, Adjusted EBIT increased $35.7 million to $150.9 million and increased $52.6 million to $297.2 million, respectively, compared to the same periods in the prior year. During the three and six months ended August 2, 2025, Adjusted EBITDA increased $43.9 million to $245.7 million and increased $70.6 million to $483.8 million, respectively, compared to the same periods in the prior year. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.
The following table shows our reconciliation of net income to Adjusted EBIT and Adjusted EBITDA for the three and six months ended August 2, 2025 compared with the three and six months ended August 3, 2024:
|
|
(unaudited) |
|
|||||||||||||
|
|
|
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
August 2, |
|
|
August 3, |
|
|
August 2, |
|
|
August 3, |
|
||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Reconciliation of net income to Adjusted EBIT and Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
94,185 |
|
|
$ |
73,760 |
|
|
$ |
195,018 |
|
|
$ |
152,274 |
|
Interest expense |
|
|
17,427 |
|
|
|
16,582 |
|
|
|
33,237 |
|
|
|
33,231 |
|
Interest income |
|
|
(4,124 |
) |
|
|
(6,128 |
) |
|
|
(8,835 |
) |
|
|
(14,200 |
) |
Net favorable lease costs (a) |
|
|
1,932 |
|
|
|
3,138 |
|
|
|
4,070 |
|
|
|
6,108 |
|
Costs related to debt amendments (b) |
|
|
— |
|
|
|
— |
|
|
|
112 |
|
|
|
— |
|
Impairment charges - long-lived assets |
|
|
1,580 |
|
|
|
— |
|
|
|
2,095 |
|
|
|
8,210 |
|
Litigation matters (c) |
|
|
6,750 |
|
|
|
1,925 |
|
|
|
6,334 |
|
|
|
1,925 |
|
Income tax expense |
|
|
33,139 |
|
|
|
25,907 |
|
|
|
65,178 |
|
|
|
57,032 |
|
Adjusted EBIT |
|
|
150,889 |
|
|
|
115,184 |
|
|
|
297,209 |
|
|
|
244,580 |
|
Depreciation and amortization |
|
|
94,810 |
|
|
|
86,659 |
|
|
|
186,593 |
|
|
|
168,624 |
|
Adjusted EBITDA |
|
$ |
245,699 |
|
|
$ |
201,843 |
|
|
$ |
483,802 |
|
|
$ |
413,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
26
Comparable Store Sales. Comparable store sales measure performance of a store during the current reporting period against the performance of the same store in the corresponding period of a prior year. The method of calculating comparable store sales varies across the retail industry. As a result, our definition of comparable store sales may differ from other retailers.
We define comparable store sales as merchandise sales of those stores commencing on the first day of the fiscal month one year after the end of their grand opening activities, which normally conclude within the first two months of operations. If a store is closed for seven or more days during a month, our policy is to remove that store from our calculation of comparable store sales for any such month, as well as during the month(s) of their grand re-opening activities. The change in our comparable store sales was as follows:
|
|
Three Months Ended |
|
Six Months Ended |
August 2, 2025 |
|
5% |
|
2% |
August 3, 2024 |
|
5% |
|
3% |
Various factors affect comparable store sales, including, but not limited to, weather conditions, current economic conditions, the timing of our releases of new merchandise and promotional events, the general retail sales environment, consumer preferences and buying trends, changes in sales mix among distribution channels, competition, and the success of marketing programs.
Gross Margin. Gross margin is the difference between net sales and the cost of sales. Our cost of sales and gross margin may not be comparable to those of other entities, since some entities may include all of the costs related to their buying and distribution functions, certain store-related costs and other costs, in cost of sales. We include certain of these costs in the line items “Selling, general and administrative expenses” and “Depreciation and amortization” in our Condensed Consolidated Statements of Income. We include in our “Cost of sales” line item all costs of merchandise (net of purchase discounts and certain vendor allowances), inbound freight, distribution center outbound freight and certain merchandise acquisition costs, primarily commissions and import fees.
Gross margin as a percentage of net sales increased to 43.7% during the three month period ended August 2, 2025, compared with 42.8% during three month period ended August 3, 2024. Gross margin as a percentage of net sales increased to 43.8% during the six months ended August 2, 2025, compared with 43.2% during the six months ended August 3, 2024. These improvements were driven primarily by increased merchandise margin and decreased freight costs. The improvements in merchandise margin were driven by lower shortage and reduced markdowns, which more than offset lower markup due to tariffs. Product sourcing costs, which are included in selling, general and administrative expenses, were flat as a percentage of net sales during the three and six month periods ended August 2, 2025, compared with the three and six month periods ended August 3, 2024.
Inventory. Inventory at August 2, 2025 increased to $1,414.8 million compared with $1,222.7 million at August 3, 2024. The increase was attributable primarily to an increase in reserve inventory and 81 net new stores opened since the end of the second quarter of Fiscal 2024. Comparable store inventories decreased 8% compared to the second quarter of Fiscal 2024.
Reserve inventory includes all inventory that is being stored for release either later in the season, or in a subsequent season. We intend to use our reserve merchandise to effectively chase sales trends. Reserve inventory was 50% of total inventory at the end of the second quarter of Fiscal 2025 compared to 41% at the end of the second quarter of Fiscal 2024.
In order to better serve our customers and maximize sales, we continue to refine our merchandising mix and inventory levels within our stores. By appropriately managing our inventories, we believe we will be better able to deliver a continual flow of fresh merchandise to our customers.
Liquidity. Liquidity measures our ability to generate cash. Management measures liquidity through cash flow, which is the measure of cash generated from or used in operating, financing, and investing activities. Cash and cash equivalents decreased $247.1 million during the six months ended August 2, 2025, compared with a decrease of $265.4 million during the six months ended August 3, 2024. Refer to the section below entitled “Liquidity and Capital Resources” for further explanation.
27
Results of Operations
The following table sets forth certain items in the Condensed Consolidated Statements of Income as a percentage of net sales for the three and six months ended August 2, 2025 and the three and six months ended August 3, 2024.
|
|
Percentage of Net Sales |
|
|||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
August 2, |
|
|
August 3, |
|
|
August 2, |
|
|
August 3, |
|
||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Other revenue |
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.2 |
|
Total revenue |
|
|
100.1 |
|
|
|
100.2 |
|
|
|
100.2 |
|
|
|
100.2 |
|
Cost of sales |
|
|
56.3 |
|
|
|
57.2 |
|
|
|
56.2 |
|
|
|
56.8 |
|
Selling, general and administrative expenses |
|
|
35.2 |
|
|
|
35.1 |
|
|
|
35.0 |
|
|
|
35.1 |
|
Costs related to debt amendments |
|
|
— |
|
|
|
— |
|
|
|
0.0 |
|
|
|
— |
|
Depreciation and amortization |
|
|
3.5 |
|
|
|
3.5 |
|
|
|
3.6 |
|
|
|
3.5 |
|
Impairment charges - long-lived assets |
|
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
|
0.2 |
|
Other income - net |
|
|
(0.2 |
) |
|
|
(0.4 |
) |
|
|
(0.3 |
) |
|
|
(0.4 |
) |
Interest expense |
|
|
0.6 |
|
|
|
0.7 |
|
|
|
0.6 |
|
|
|
0.7 |
|
Total costs and expenses |
|
|
95.5 |
|
|
|
96.1 |
|
|
|
95.1 |
|
|
|
95.9 |
|
Income before income tax expense |
|
|
4.6 |
|
|
|
4.1 |
|
|
|
5.1 |
|
|
|
4.3 |
|
Income tax expense |
|
|
1.2 |
|
|
|
1.1 |
|
|
|
1.3 |
|
|
|
1.2 |
|
Net income |
|
|
3.4 |
% |
|
|
3.0 |
% |
|
|
3.8 |
% |
|
|
3.1 |
% |
Three Month Period Ended August 2, 2025 Compared With the Three Month Period Ended August 3, 2024
Net sales
Net sales improved $239.8 million, or 9.7%, to $2,701.0 million during the second quarter of Fiscal 2025, primarily driven by net sales from our 81 net new stores opened since the end of the second quarter of Fiscal 2024 as well as an increase of 5% in comparable stores sales during the three month period ended August 2, 2025.
Cost of sales
Cost of sales as a percentage of net sales decreased to 56.3% during the second quarter of Fiscal 2025, compared to 57.2% during the second quarter of Fiscal 2024. This improvement was driven primarily by increased merchandise margin and decreased freight costs. The improvement in merchandise margin was driven by lower shortage and reduced markdowns, which more than offset lower markup due to tariffs. On a dollar basis, cost of sales increased $111.5 million, or 7.9%, primarily driven by our overall increase in sales.
Selling, general and administrative expenses
Selling, general and administrative expenses as a percentage of net sales increased to 35.2% during the second quarter of Fiscal 2025, compared to 35.1% during the second quarter of Fiscal 2024. The increase was primarily driven by an increase in incentive compensation, partially offset by improvement in store payroll costs. On a dollar basis, selling, general and administrative expenses increased by $86.0 million, or 9.9%, to $949.9 million during the second quarter of Fiscal 2025. The increase was primarily driven by our 81 net new stores opened since the end of the second quarter of Fiscal 2024.
During the second quarter of Fiscal 2025 and Fiscal 2024, the Company incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $10.8 million and $3.3 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the second quarter of Fiscal 2025 and Fiscal 2024, respectively.
Depreciation and amortization
Depreciation and amortization expense amounted to $94.8 million during the second quarter of Fiscal 2025 compared with $86.7 million during the second quarter of Fiscal 2024. The increase in depreciation and amortization expense was primarily driven by new and non-comparable stores, as well as capital expenditures related to our supply chain.
28
Impairment charges – long-lived assets
Impairment charges on long-lived assets were $1.6 million during the second quarter of Fiscal 2025, related to unrecoverable store assets. There were no impairment charges on long-lived assets during the second quarter of Fiscal 2024.
The recoverability assessment related to these store-level assets requires various judgments and estimates, including estimates related to future revenues, gross margin rates, store expenses and other assumptions. We base these estimates upon our past and expected future performance. We believe our estimates are appropriate in light of current market conditions. However, future impairment charges could be required if we do not achieve our current revenue or cash flow projections for each store. Refer to Note 6, “Fair Value Measurements,” for further discussion regarding impairment charges.
Interest expense
Interest expense increased $0.8 million during the second quarter of Fiscal 2025 to $17.4 million, compared to the same period in the prior year. Increases related to the upsize of the Term Loan Facility and ABL borrowings were offset by increased capitalized interest as a result of the ongoing construction of a distribution center. Additionally, the Company paid down the 2025 Convertible Notes during the first quarter of Fiscal 2025.
The average interest rate on the Term Loan Facility was 6.1% and 7.4% for the second quarter of Fiscal 2025 and the second quarter of Fiscal 2024, respectively. The average balance on the Term Loan Facility, excluding the original issue discount, was $1,527.9 million and $934.0 million for the second quarter of Fiscal 2025 and the second quarter of Fiscal 2024, respectively.
The average interest rate on the ABL Line of Credit was 5.5% for the second quarter of Fiscal 2025. The average balance on the ABL Line of Credit was $57.1 million for the second quarter of Fiscal 2025. There were no borrowings under the ABL Line of Credit during the second quarter of Fiscal 2024.
Income tax expense
Income tax expense was $33.1 million during the second quarter of Fiscal 2025 compared with income tax expense of $25.9 million during the second quarter of Fiscal 2024. The effective tax rate for the second quarter of Fiscal 2025 was 26.0% compared with 26.0% during the second quarter of Fiscal 2024. The increase in tax expense is driven by higher pre-tax income while the effective tax rate remained consistent with prior year.
At the end of each interim period we are required to determine the best estimate of our annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. Use of this methodology during the second quarter of Fiscal 2025 resulted in an annual effective income tax rate of approximately 26% (before discrete items) as our best estimate.
Net income
We earned net income of $94.2 million for the second quarter of Fiscal 2025 compared with $73.8 million for the second quarter of Fiscal 2024. This increase was primarily driven by higher sales, as well as increased gross margin rate. Net income included $8.1 million and $2.5 million of expense, net of income taxes, for the second quarter of Fiscal 2025 and Fiscal 2024, respectively, related to the bankruptcy acquired leases.
Six Month Period Ended August 2, 2025 Compared With the Six Month Period Ended August 3, 2024
Net sales
Net sales improved $382.6 million, or 7.9%, to $5,201.1 million during the six month period ended August 2, 2025, primarily driven by the net sales of 81 net new stores opened since the end of the second quarter of Fiscal 2024, as well as an increase of 2% in comparable stores sales during the six month period ended August 2, 2025.
Cost of sales
Cost of sales as a percentage of net sales decreased to 56.2% during the six month period ended August 2, 2025, compared to 56.8% during the six month period ended August 3, 2024. This improvement was driven primarily by increased merchandise margin and decreased freight costs. The improvement in merchandise margin was primarily driven by lower shortage. On a dollar basis, cost of sales increased $185.9 million, or 6.8%, primarily driven by our overall increase in sales.
29
Selling, general and administrative expenses
Selling, general and administrative expenses as a percentage of net sales decreased to 35.0% during the six month period ended August 2, 2025, compared to 35.1% during the six month period ended August 3, 2024. The decrease was primarily driven by an improvement in store payroll costs, partially offset by an increase in incentive compensation. On a dollar basis, selling, general and administrative expenses increased by $128.8 million, or 7.6%, to $1,818.0 million during the six month period ended August 2, 2025. The increase was primarily driven by our 81 net new stores opened since the end of the second quarter of Fiscal 2024.
During the six month periods ended August 2, 2025 and August 3, 2024, the Company incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $16.6 million and $9.4 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the six month periods ended August 2, 2025 and August 3, 2024, respectively.
Depreciation and amortization
Depreciation and amortization expense amounted to $186.6 million during the six month period ended August 2, 2025 compared with $168.6 million during the six month period ended August 3, 2024. The increase in depreciation and amortization expense was primarily driven by capital expenditures related to our supply chain, as well as new and non-comparable stores.
Impairment charges – long-lived assets
Impairment charges on long-lived assets were $2.1 million during the six month period ended August 2, 2025, related to unrecoverable store assets. Impairment charges on long-lived assets were $8.2 million during the six month period ended August 3, 2024, related to a sale-leaseback transaction at one owned store sold below net carrying value.
The recoverability assessment related to these store-level assets requires various judgments and estimates, including estimates related to future revenues, gross margin rates, store expenses and other assumptions. We base these estimates upon our past and expected future performance. We believe our estimates are appropriate in light of current market conditions. However, future impairment charges could be required if we do not achieve our current revenue or cash flow projections for each store. Refer to Note 6, “Fair Value Measurements,” for further discussion regarding impairment charges.
Interest expense
Interest expense remained flat during the six month period ended August 2, 2025 at $33.2 million, compared to the same period in the prior year. Increases related to the upsize of the Term Loan Facility and ABL borrowings were offset by increased capitalized interest as a result of the ongoing construction of a distribution center. Additionally, the Company paid down the 2025 Convertible Notes during the first quarter of Fiscal 2025.
The average interest rate on the Term Loan Facility was 6.1% and 7.4% for the six month period ended August 2, 2025 and the six month period ended August 3, 2024, respectively. The average balance on the Term Loan Facility, excluding the original issue discount, was $1,386.8 million and $935.3 million for the six month period ended August 2, 2025 and the six month period ended August 3, 2024, respectively.
The average interest rate on the ABL Line of Credit was 5.5% for the six month period ended August 2, 2025. The average balance on the ABL Line of Credit was $40.4 million for the six month period ended August 2, 2025. There were no borrowings under the ABL Line of Credit during the six month period ended August 3, 2024.
Income tax expense
Income tax expense was $65.2 million during the six month period ended August 2, 2025 compared with income tax expense of $57.0 million during the six month period ended August 3, 2024. The effective tax rate for the six month period ended August 2, 2025 was 25.0% compared with 27.2% during the six month period ended August 3, 2024. The increase in income tax expense is due to higher pre-tax income. The lower effective tax rate is mainly driven by the tax benefit from stock-based compensation.
At the end of each interim period we are required to determine the best estimate of our annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. Use of this methodology during the six month period ended August 2, 2025 resulted in an annual effective income tax rate of approximately 26% (before discrete items) as our best estimate.
30
Net income
We earned net income of $195.0 million for the six month period ended August 2, 2025 compared with $152.3 million for the six month period ended August 3, 2024. This increase was primarily driven by higher sales, as well as increased gross margin rate. Net income included $12.4 million and $6.8 million of expense, net of income taxes, for the first half of Fiscal 2025 and Fiscal 2024, respectively, related to the bankruptcy acquired leases.
Liquidity and Capital Resources
Our ability to satisfy interest payment and future principal payment obligations on our outstanding debt will depend largely on our future performance which, in turn, is subject to prevailing economic conditions and to financial, business and other factors beyond our control. If we do not have sufficient cash flow to service interest payment and future principal payment obligations on our outstanding indebtedness and if we cannot borrow or obtain equity financing to satisfy those obligations, our business and results of operations will be materially adversely affected. We cannot be assured that any replacement borrowing or equity financing could be successfully completed on terms similar to our current financing agreements, or at all.
We believe that cash generated from operations, along with our existing cash and our ABL Line of Credit, will be sufficient to fund our expected cash flow requirements and planned capital expenditures for at least the next twelve months as well as the foreseeable future. However, there can be no assurance that we would be able to offset declines in our comparable store sales with savings initiatives.
As market conditions warrant, we may, from time to time, repurchase our outstanding debt securities in the open market, in privately negotiated transactions, by tender offer, by exchange transaction or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity and other factors and may be commenced or suspended at any time. The amounts involved and total consideration paid may be material.
From time to time, we evaluate options to opportunistically increase, refinance or extend our debt. Our assessment will be based on our capital needs for, among other things, facility purchases, capital improvements and expenditures. No assurance can be given that we will enter into such agreements.
Cash Flow for the Six Month Period Ended August 2, 2025 Compared With the Six Month Period Ended August 3, 2024
We used $247.1 million of cash during the six month period ended August 2, 2025 compared with a use of $265.4 million during the six month period ended August 3, 2024.
Net cash provided by operating activities amounted to $150.5 million during the six month period ended August 2, 2025, compared with $209.8 million during the six month period ended August 3, 2024. The decrease in our operating cash flows was primarily driven by the impact of changes in working capital, partially offset by improved sales and gross margin.
Net cash used in investing activities was $581.4 million during the six month period ended August 2, 2025 compared with $362.3 million during the six month period ended August 3, 2024. This change was primarily the result of an increase in capital expenditures related to supply chain costs from the purchase and build-out of distribution centers as well as increased store openings.
Net cash provided by financing activities was $183.8 million during the six month period ended August 2, 2025 compared with net cash used of $113.0 million during the six month period ended August 3, 2024. This change was primarily driven by the upsize of the Term Loan Facility during the second quarter of Fiscal 2025, partially offset by settlement of the 2025 Convertible Notes during the first quarter of Fiscal 2025.
Changes in working capital also impact our cash flows. Working capital equals current assets minus current liabilities. We had working capital at August 2, 2025 of $480.3 million compared with $79.3 million at August 3, 2024. The increase in working capital was primarily due to increased inventory and decreased current maturities of long term debt related to the settlement of the 2025 Convertible Notes. We had working capital at February 1, 2025 of $356.3 million.
Capital Expenditures
For the six month period ended August 2, 2025, capital expenditures, net of $13.6 million of landlord allowances, amounted to $639.9 million (inclusive of accrued capital expenditures).
We estimate that we will spend approximately $950 million, net of approximately $55 million of landlord allowances, in capital expenditures during Fiscal 2025, including approximately $445 million, net of the previously mentioned landlord allowances, for store expenditures (new stores, relocations, downsizes and other store expenditures). In addition, we estimate that we will spend
31
approximately $415 million to support our supply chain initiatives, with the remaining capital used to support our information technology and other business initiatives.
Share Repurchase Program
On August 15, 2023, our Board of Directors authorized the repurchase of up to $500.0 million of common stock, which is authorized to be executed through August 15, 2025.
On May 20, 2025, our Board of Directors authorized the repurchase of up to an additional $500.0 million of common stock, which is authorized to be executed through May 20, 2027.
During the six month period ended August 2, 2025, we repurchased 547,759 shares of common stock for $131.1 million under these repurchase programs. As of August 2, 2025, we had $632.1 million remaining under our share repurchase authorization.
We are authorized to repurchase shares of our outstanding common stock from time to time on the open market or in privately negotiated transactions under our repurchase program. The timing and amount of stock repurchases will depend on a variety of factors, including the market conditions as well as corporate and regulatory considerations. Our share repurchase program may be suspended, modified or discontinued at any time, and we have no obligation to repurchase any amount of our common stock under the program.
Dividends
We currently do, and intend to continue to, retain all available funds and any future earnings to fund all of the Company's capital expenditures, business initiatives, and to support any potential opportunistic capital structure initiatives. Therefore, at this time, we do not anticipate paying cash dividends in the near term. Our ability to pay dividends on our common stock will be limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions under the terms of current and any future agreements governing our indebtedness. Any future determination to pay dividends will be at the discretion of our Board of Directors, subject to compliance with covenants in our current and future agreements governing our indebtedness, and will depend upon our results of operations, financial condition, capital requirements and other factors that our Board of Directors deems relevant.
In addition, since we are a holding company, substantially all of the assets shown on our Condensed Consolidated Balance Sheets are held by our subsidiaries. Accordingly, our earnings, cash flow and ability to pay dividends are largely dependent upon the earnings and cash flows of our subsidiaries and the distribution or other payment of such earnings to us in the form of dividends.
Operational Growth
During the six month period ended August 2, 2025, we opened 44 new stores, inclusive of eight relocations, and closed six stores, exclusive of the aforementioned relocations, bringing our store count as of August 2, 2025 to 1,138 stores. During Fiscal 2025, we plan to open 100 net new stores.
Debt and Hedging
As of August 2, 2025, our obligations, inclusive of original issue discount, include $1,727.1 million under our Term Loan Facility, $297.1 million of our 2027 Convertible Notes and no outstanding borrowings on our ABL Line of Credit. Our debt obligations also include $23.9 million of finance lease obligations as of August 2, 2025.
Term Loan Facility
BCFWC and certain of its subsidiaries and holding companies are party to a Credit Agreement (as amended, supplemented and otherwise modified, the Term Loan Facility) that provides for term loans in an aggregate principal amount as of August 2, 2025 of $1,739.4 million maturing on September 24, 2031.
On September 24, 2024, we entered into an amendment to the Term Loan Facility dated as of February 24, 2011 (the "Amendment"), which among other things, (i) refinanced the outstanding $933.0 million principal amount of Term B-6 Loans with Term B-7 Loans in an aggregate principal amount of $1,250.0 million, which includes incremental term loans in an aggregate principal amount of $317.0 million, (ii) extended the maturity date from June 24, 2028 to September 24, 2031, and (iii) reduced the interest rate margins applicable to our term loan facility from 1.00% to 0.75%, in the case of prime rate loans, and from 2.00% to 1.75%, in the case of SOFR loans, with a 0.00% SOFR floor, and removed the SOFR adjustment. The Term B-7 Loans were issued with an original issue discount of 99.5.
32
On June 11, 2025, we entered into an amendment to the Term Loan Facility, which among other things, incurred $500.0 million of incremental term loans under the Term Loan Credit Agreement as additional Term B-7 Loans. The incremental term loans were issued with an original issue discount of 99.0 and are otherwise on terms identical to the existing Term B-7 Loans and are fungible with the existing Term B-7 Loans.
At August 2, 2025, our borrowing rate related to the Term Loan Facility was 6.1%.
ABL Line of Credit
BCFWC and certain of its subsidiaries and holding companies are party to a Second Amended and Restated Credit Agreement (as amended, supplemented and otherwise modified, the ABL Line of Credit) that provides for $1,000.0 million of revolving commitments (subject to a borrowing base limitation) maturing on July 25, 2030, and, subject to the satisfaction of certain conditions, BCFWC can increase the aggregate amount of commitments up to $1,200.0 million an amount not to exceed the sum of (i) the greater of (x) $300.0 million and (y) the amount by which the Borrowing Base exceeds the aggregate Commitments, plus (iii) the amount of all permanent reductions in commitments after July 25, 2025. The interest rate margin applicable under the ABL Line of Credit is 1.125% to 1.375% in the case of a daily SOFR rate or a term SOFR rate (in each case, plus a credit spread adjustment of 0.10%), and 0.125% to 0.375% in the case of a prime rate, depending on the average daily availability of the lesser of (a) the total commitments or (b) the borrowing base. The ABL Line of Credit is collateralized by a first priority lien on BCFWC’s and each guarantor's inventory, receivables, bank accounts, and certain related assets and proceeds thereof (subject to certain exceptions), and a second priority lien on BCFWC’s and each guarantor's other assets and proceeds thereof (other than real estate and subject to certain exceptions)
On July 25, 2025, we entered into an amendment to the ABL Line of Credit in order to, among other things, (i) increase the aggregate principal amount of the commitments from $900.0 million to $1,000.0 million and (ii) extend the maturity date of the commitments and loans from December 22, 2026 to July 25, 2030.
At August 2, 2025, we had $945.7 million available under the ABL Line of Credit. Average borrowings during the six month period ended August 2, 2025 amounted to $40.4 million at an average interest rate of 5.5%.
2025 Convertible Notes
On April 16, 2020, we issued 2025 Convertible Notes, which matured on April 15, 2025. The 2025 Convertible Notes were general unsecured obligations of the Company and bore interest at a rate of 2.25% per year, payable semi-annually in cash, in arrears, on April 15 and October 15 of each year.
Prior to maturity, holders of the 2025 Convertible Notes submitted conversion notices with respect to approximately $155.5 million aggregate principal amount of the 2025 Convertible Notes. On the conversion settlement date, the Company paid to the converting holders the aggregate principal amount of 2025 Convertible Notes subject to conversion, and issued and delivered to such holders 57,149 shares of common stock, in respect of the remainder of its conversion obligation in excess of such aggregate principal amount. At maturity, the Company paid in cash the principal balance and related accrued and unpaid interest on the 2025 Convertible Notes not previously converted. There was no resulting debt extinguishment charge from this transaction.
2027 Convertible Notes
On September 12, 2023, we closed the issuance of approximately $297.1 million aggregate principal amount of our 2027 Convertible Notes pursuant to separate, privately negotiated exchange and subscription agreements with a limited number of holders of our 2025 Convertible Notes and certain investors, in each case pursuant to exemptions from registration under the Securities Act of 1933. We exchanged approximately $241.2 million in aggregate principal amount of the 2025 Convertible Notes for approximately $255.0 million in aggregate principal amount of the 2027 Convertible Notes. We also issued approximately $42.1 million in aggregate principal amount of 2027 Convertible Notes in a private placement to certain investors. An aggregate of up to 1,422,568 shares of common stock may be issued upon conversion of the 2027 Convertible Notes, which number is subject to adjustment up to an aggregate of 1,911,372 shares following certain corporate events that occur prior to the maturity date or if we issue a notice of redemption, and which is also subject to certain anti-dilution adjustments.
The 2027 Convertible Notes bear interest at a rate of 1.25% per year, payable semi-annually in arrears on June 15 and December 15 of each year. The 2027 Convertible Notes will mature on December 15, 2027, unless earlier converted, redeemed or repurchased.
Prior to the close of business on the business day immediately preceding September 15, 2027, the 2027 Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods. Thereafter, the 2027 Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled
33
trading day immediately preceding the maturity date. The 2027 Convertible Notes have an initial conversion rate of 4.8560 shares per $1,000 principal amount of 2027 Convertible Notes (equivalent to an initial conversion price of approximately $205.93 per share of our common stock), subject to adjustment if certain events occur. The initial conversion price represents a conversion premium of approximately 32.50% over $155.42 per share, the last reported sale price of our common stock on September 7, 2023 on The New York Stock Exchange. Upon conversion, we will pay cash up to the aggregate principal amount of 2027 Convertible Notes being converted, and pay (and deliver, if applicable) cash, shares of our common stock or a combination thereof, at its election, in respect of the remainder (if any) of our conversion obligation in excess of such aggregate principal amount. We will not be able to redeem the 2027 Convertible Notes prior to December 20, 2025. On or after December 20, 2025 and prior to the 21st scheduled trading day immediately preceding December 15, 2027, we will be able to redeem for cash all or any portion of the 2027 Convertible Notes, at its option, if the last reported sale price of our common stock is equal to or greater than 130% of the conversion price for a specified period of time, at a redemption price equal to 100% of the aggregate principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
If we undergo a fundamental change, subject to certain conditions, holders of the 2027 Convertible Notes may require us to repurchase for cash all or any portion of our 2027 New Convertible Notes. The fundamental change repurchase price will be 100% of the aggregate principal amount of the 2027 Convertible Notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
Hedging
During the second quarter of Fiscal 2025, we entered into a $200.0 million interest rate swap agreement with a fixed interest rate of 3.76%. On the same date, we also entered into a $100.0 million interest rate swap agreement with a fixed interest rate of 3.73%.
In total, we have interest rate swaps which hedge $1,100.0 million of variable rate exposure under our Term Loan Facility. The interest rate swaps are designated as cash flow hedges and expire on September 24, 2031. Refer to Note 5, “Derivative Instruments and Hedging Activities,” for further discussion regarding our derivative transactions.
Certain Information Concerning Contractual Obligations
We had $2,012.7 million of purchase commitments related to goods that were not received as of August 2, 2025, and had $4,879.2 million of future minimum lease payments under operating leases as of August 2, 2025. Other than the items disclosed here, and in the "Debt and Hedging" section above, there were no other significant changes regarding our obligations to make future payments under current contracts from those included in our Fiscal 2024 10-K.
Critical Accounting Policies and Estimates
Our Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. We believe there are several accounting policies that are critical to understanding our historical and future performance as these policies affect the reported amounts of revenues and other significant areas that involve management’s judgments and estimates. The preparation of our Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities; (ii) the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements; and (iii) the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, inventories, long-lived assets, intangible assets, goodwill, insurance reserves, leases and income taxes. Historical experience and various other factors that are believed to be reasonable under the circumstances form the basis for making estimates and judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. A critical accounting estimate meets two criteria: (1) it requires assumptions about highly uncertain matters and (2) there would be a material effect on the Condensed Consolidated Financial Statements from either using a different, although reasonable, amount within the range of the estimate in the current period or from reasonably likely period-to-period changes in the estimate.
Our critical accounting policies and estimates are consistent with those disclosed in Note 1, “Summary of Significant Accounting Policies,” to the audited Consolidated Financial Statements, included in Part II, Item 8 of the Fiscal 2024 10-K.
Safe Harbor Statement
This report contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, the industry in which we operate and other matters, as well as management’s beliefs and assumptions and other statements
34
regarding matters that are not historical facts. For example, when we use words such as “projects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “should,” “would,” “could,” “will,” “opportunity,” “potential” or “may,” variations of such words or other words that convey uncertainty of future events or outcomes, we are making 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 (Exchange Act). Such statements may include, but are not limited to, future impacts of current macroeconomic conditions, proposed store openings and closings, proposed capital expenditures, ongoing strategic initiatives and the intended results of those initiatives, future performance or results, the effect of the adoption of recent accounting pronouncements on our condensed consolidated financial position, results of operations and cash flows, and the outcome of contingencies such as legal proceedings. Our forward-looking statements are subject to risks and uncertainties. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual events or results to differ materially from those we expected include: general economic conditions, such as inflation, and the domestic and international political situation and the related impact on consumer confidence and spending; competitive factors, including the scale and potential consolidation of some of our competitors, rise of e-commerce spending, pricing and promotional activities of major competitors, and an increase in competition within the markets in which we compete; seasonal fluctuations in our net sales, operating income and inventory levels; the reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located; our ability to identify changing consumer preferences and demand; our ability to meet evolving regulatory requirements and stakeholder expectations regarding our environmental, social or governance matters; extreme and/or unseasonable weather conditions caused by climate change or otherwise adversely impacting demand; effects of public health crises, epidemics or pandemics; our ability to sustain our growth plans or successfully implement our long-range strategic plans; our ability to execute our opportunistic buying and inventory management process; our ability to optimize our existing stores or maintain favorable lease terms; the availability, selection and purchasing of attractive brand name merchandise on favorable terms; our ability to attract, train and retain quality employees and temporary personnel in sufficient numbers; labor costs and our ability to manage a large workforce; 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; disruption in our distribution network; our ability to protect our information systems against service interruption, misappropriation of data, breaches of security, or other cyber-related attacks; risks related to the methods of payment we accept; the success of our advertising and marketing programs in generating sufficient levels of customer traffic and awareness; damage to our corporate reputation or brand; impact of potential loss of executives or other key personnel; our ability to comply with existing and changing laws, rules, regulations and local codes; lack of or insufficient insurance coverage; issues with merchandise safety and shrinkage; our ability to comply with increasingly rigorous privacy and data security regulations; impact of legal and regulatory proceedings relating to us; use of social media by us or by third parties at our direction in violation of applicable laws and regulations; our ability to generate sufficient cash to fund our operations and service our debt obligations; our ability to comply with covenants in our debt agreements; the consequences of the possible conversion of our convertible notes; our reliance on dividends, distributions and other payments, advance and transfers of funds from our subsidiaries to meet our obligations; the volatility of our stock price; the impact of the anti-takeover provisions in our governing documents; impact of potential shareholder activism and other risks discussed from time to time in our filings with the Securities and Exchange Commission (SEC), including those under the heading “Risk Factors” in the Fiscal 2024 10-K and as further updated under the heading “Risk Factors” in Part II, Item 1A above.
Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law, 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.
Recent Accounting Pronouncements
Refer to Note 1, “Summary of Significant Accounting Policies,” to our Condensed Consolidated Financial Statements in Part I, Item 1 for a discussion of recent accounting pronouncements and their impact on our Condensed Consolidated Financial Statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
On June 11, 2025, the Company entered into an amendment to the Term Loan Facility, which among other things, incurred $500.0 million of incremental term loans under the Term Loan Credit Agreement as additional Term B-7 Loans. The incremental term loans were issued with an original issue discount of 99.0 and are otherwise on terms identical to the existing Term B-7 Loans and are fungible with the existing Term B-7 Loans.
35
On June 12, 2025, the Company entered into a $200.0 million interest rate swap agreement with a fixed interest rate of 3.76%. On the same date, the Company also entered into a $100.0 million interest rate swap agreement with a fixed interest rate of 3.73%.
On July 25, 2025, the Company entered into an amendment to the ABL Line of Credit in order to, among other things, (i) increase the aggregate principal amount of the commitments from $900.0 million to $1,000.0 million and (ii) extend the maturity date of the commitments and loans from December 22, 2026 to July 25, 2030.
There were no other material changes to our quantitative and qualitative disclosures about market risk from those included in the Fiscal 2024 10-K.
Item 4. Controls and Procedures.
Our management team, under the supervision and with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act, as of the last day of the fiscal period covered by this report, August 2, 2025. The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of August 2, 2025.
During the quarter ended August 2, 2025, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
In the course of business, the Company is party to class or collective actions alleging violations of federal and state wage and hour and other labor statutes, representative claims under the California Private Attorneys’ General Act and various other lawsuits and regulatory proceedings from time to time including, among others, commercial, product, employee, customer, intellectual property, privacy and other claims. Actions against us are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties. Refer to Note 11, "Commitments and Contingencies," to our Condensed Consolidated Financial Statements for further detail.
Item 1A. Risk Factors.
In addition to the other information set forth in this report, you should carefully consider the factors discussed under Item 1A, "Risk Factors" and elsewhere in the Fiscal 2024 Form 10-K. These risks and uncertainties could materially and adversely affect our business, consolidated financial condition, results of operations, or cash flows. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently do not consider material to our business. There have been no material changes in the risk factors discussed in the Fiscal 2024 Form 10-K except as set forth below.
The risk factor set forth in the Fiscal 2024 Form 10-K under the heading “A downturn in general economic conditions or consumer spending or inflationary conditions could adversely affect our business” is replaced in its entirety with the new risk factor set forth below:
A downturn in general economic conditions or consumer spending or inflationary conditions could adversely affect our business.
Consumer spending levels and shopping behaviors are affected by various economic conditions, which can affect our business or the retail industry generally as a result. These factors include, among other things, prevailing global economic conditions, inflation (including the costs of basic necessities and other goods), levels of employment, salaries and wage rates, prevailing interest rates, housing costs, energy costs, commodities pricing, income tax rates and policies, immigration policies, consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns may be influenced by consumers’ disposable income, credit availability and debt levels. Slowdown in the U.S. economy, an uncertain global economic outlook, interest rate volatility, or a credit crisis could adversely affect consumer spending habits, resulting in lower net sales and profits than expected on a quarterly or annual basis. Consumer confidence is also affected by the domestic and international political situation and periods of social unrest. The occurrence of terrorist acts or other hostilities in or affecting the U.S. could lead to a decrease in spending by
36
consumers. In addition, natural disasters, industrial accidents, acts of war or global international conflicts (such as the conflict in Ukraine or the conflict in the Middle East), and public health issues (such as pandemics or epidemics) have in the past and may in the future have the effect of disrupting supplies and raising prices globally which, in turn, may have adverse effects on the world and U.S. economies and lead to a downturn in consumer confidence and spending. Certain of these risks, such as risks arising from economic volatility, have been enhanced in 2025 in light of the recent change in trade and tariff policies. General uncertainty regarding the overall future political and economic environment and adverse economic changes could reduce consumer confidence and could negatively affect our operating results. We cannot predict when macroeconomic uncertainty may arise, whether or when such circumstances may improve or worsen or what impact such circumstances could have on our business.
Recent actions by the U.S., including the imposition of significant tariffs on imports from certain countries, have heightened uncertainty in the global trade environment. These tariffs, along with potential retaliatory measures by other countries, may increase inflationary pressure and raise the costs of our merchandise.
There can be no assurance that we will be able to offset inflationary pressure and other fluctuations in costs in the future, or that consumer behavior or our business, operations, liquidity, and/or financial results, will not be negatively affected by continued inflation in the future. We may not be able to adequately increase our prices over time to offset increased costs, whether due to inflation, tariffs or otherwise. Any decreases in consumer discretionary spending could result in a decrease in store traffic and same store sales, all of which could negatively affect the Company’s business, operations, liquidity, financial results and/or stock price, particularly if consumer spending levels are depressed for a prolonged period of time.
The risk factor set forth in the Fiscal 2024 Form 10-K under the heading “Many of our vendors produce merchandise overseas, and our business is exposed to the risk of foreign and domestic operations and international tax policies and trade relations” is replaced in its entirety with the new risk factor set forth below:
Many of our vendors produce merchandise overseas, and our business is exposed to the risk of foreign and domestic operations and international tax and tariff policies and trade relations.
We do not own or operate any manufacturing facilities. As a result, we are dependent upon the timely receipt of quality merchandise from vendors, many of which produce merchandise overseas. Factors which affect overseas production could affect our vendors and, in turn, our ability to obtain inventory and the price levels at which they may be obtained. Factors that cause an increase in merchandise costs or a decrease in supply could lead to generally lower sales and gross margins in the retail industry.
Such factors include:
37
Any of the foregoing factors, or a combination thereof, could have a material adverse effect on our business.
Over the past few years, uncertainty has increased with respect to tax and trade policies, tariffs and government regulations affecting trade between the U.S. and other countries. Although we source the majority of our merchandise from third party vendors located in the U.S., the production of that merchandise occurs primarily overseas. As a result, we have been impacted by the volatility in effective tariffs, including new tariffs that have commenced in 2025, retaliatory tariffs and other restrictions on trade that have resulted and may result in the future. We can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful.
In addition, other major developments in tax policy or trade relations, such as the disallowance of tax deductions for imported merchandise or the imposition of additional unilateral tariffs on imported products, could increase the cost of products purchased from suppliers in such countries or restrict the importation of products from such countries. It remains unclear how tax or trade policies, tariffs or trade relations may change in the future, and additional changes in turn could have a material adverse effect on our business, results of operations and liquidity.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table provides information regarding our purchases of common stock during the three fiscal months ended August 2, 2025:
Month |
|
Total Number |
|
|
Average Price |
|
|
Total Number |
|
|
Approximate |
|
||||
May 4, 2025 through May 31, 2025 |
|
|
43,670 |
|
|
$ |
251.47 |
|
|
|
43,670 |
|
|
$ |
646,964 |
|
June 1, 2025 through July 5, 2025 |
|
|
18,460 |
|
|
$ |
230.41 |
|
|
|
18,460 |
|
|
$ |
642,711 |
|
July 6, 2025 through August 2, 2025 |
|
|
40,344 |
|
|
$ |
263.61 |
|
|
|
40,344 |
|
|
$ |
632,076 |
|
Total |
|
|
102,474 |
|
|
|
|
|
|
102,474 |
|
|
|
|
||
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
38
Item 5. Other Information.
On
During the three-month period ended August 2, 2025, other than the trading arrangement noted above, no director or officer of the Company
Item 6. Exhibits.
Exhibit |
|
Incorporated by Reference |
|
Number |
Exhibit Description |
Form |
Filing Date |
10.1+ |
First Amendment to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan. |
Current Report on Form 8-K |
May 27, 2025 |
10.2+ |
Burlington Stores, Inc. Executive Change in Control Severance Plan. |
Quarterly Report on Form 10-Q |
May 30, 2025 |
10.3 |
Amendment No. 12, dated as of June 11, 2025, to the Credit Agreement dated as of February 24, 2011 (as amended), by and among Burlington Coat Factory Warehouse Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and facility guarantors party thereto. |
Current Report on Form 8-K |
June 13, 2025 |
10.4 |
Sixth Amendment to Second Amended and Restated Credit Agreement, dated as of December 22, 2021, by and among Burlington Coat Factory Warehouse Corporation, as lead borrower, the other borrowers party thereto, the facility guarantors party thereto, each lender party thereto, and Bank of America, N.A., as administrative agent and collateral agent. |
Current Report on Form 8-K |
July 29, 2025 |
39
31.1† |
Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
31.2† |
Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
32.1† |
Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
32.2† |
Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
101.INS† |
Inline XBRL Instance Document – the instance document does not appear in Interactive Data File, because its XBRL tags are embedded within the Inline XBRL document. |
|
|
101.SCH† |
Inline XBRL Taxonomy Extension Schema Document |
|
|
101.CAL† |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
101.DEF† |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
101.LAB† |
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
101.PRE† |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
104† |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
|
|
† Filed or furnished herewith.
+ Indicates management contract or compensatory plan or arrangement.
40
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BURLINGTON STORES, INC. |
|
/s/ Michael O’Sullivan |
Michael O’Sullivan Chief Executive Officer (Principal Executive Officer) |
|
/s/ Kristin Wolfe |
Kristin Wolfe Chief Financial Officer (Principal Financial Officer) |
Date: August 28, 2025
41
FAQ
What share repurchase authorizations does Burlington (BURL) have?
What is Burlington's store growth plan disclosed in the 10-Q?
How did equity-based compensation affect Burlington's results in the filing?
What operational initiatives is Burlington pursuing to improve margins?
Does the filing identify major risks that could affect Burlington's inventory?
Are there any notable financing or debt items disclosed?
