Burlington Stores (NYSE: BURL) reported Q2 EPS of ($0.56), $0.48 better than the analyst estimate of ($1.04). Revenue for the quarter came in at $1.01 billion versus the consensus estimate of $1.11 billion.

• On a GAAP basis, total sales declined 39%, net loss was $46.8 million, and EPS was ($0.71)
• On a Non-GAAP basis, Adjusted EPS was ($0.56)
• Total inventory decreased 26% at the end of the second quarter
• Unrestricted cash and total liquidity were approximately $1.1 billion and $1.2 billion, respectively, at the end of the second quarter

Michael O’Sullivan, CEO, stated, “The second quarter had some highs and some lows. The pace of our re-opening sales significantly exceeded our expectations, and we turned our aged spring merchandise very rapidly. This enabled us to go back into the market and take advantage of great merchandise availability. But we were not able to get these fresh receipts to our stores as quickly as we needed them; our in-store inventories declined and our sales trend fell off dramatically in the back half of June. As we have re-built our store inventory levels over the last several weeks, we have seen significant improvement in our sales trend.”

Mr. O’Sullivan continued, “We expect our trend to strengthen as we continue to replenish our store inventory levels but we see a lot of risk in Q3. In this uncertain environment, we plan to manage our business conservatively. We have plenty of liquidity and we will use this to support opportunistic buys of fall merchandise and of pack and hold inventory that we will flow to stores next year.”

Outlook

Given the uncertainty surrounding the pace of the recovery of consumer demand, the Company’s sales and earnings guidance for Fiscal 2020 (the 52-weeks ending January 30, 2021) remains suspended at this time.

The following Fiscal 2020 guidance items have been re-issued or updated:

• Capital expenditures, net of landlord allowances, are still expected to be approximately $260 million, which had been reduced at the end of the first quarter from the original outlook of $400 million;
• The Company now expects to open 62 new stores, while relocating or closing 26 stores, for a total of 36 net new stores in Fiscal 2020. Two additional stores that were originally planned for Fiscal 2020 were shifted out to Fiscal 2021, bringing the total number of stores shifted out to next Fiscal year to 18 stores;
• Depreciation & amortization, exclusive of favorable lease costs, is still expected to be approximately $230 million; and
• Interest expense, net of non-cash interest of $24 million on convertible notes, is still expected to be approximately $80 million.

For earnings history and earnings-related data on Burlington Stores (BURL) click here.