Burlington Stores, Inc. (NYSE:BURL) Q2 2019 Earnings Conference Call Transcript

Aug 29, 2019 • 08:30 am ET

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Burlington Stores, Inc. (NYSE:BURL) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Burlington Stores Incorporated Second Quarter 2019 Earnings Result Earnings Call. [Operator Instructions]

I would now like to introduce your host for today's conference, Mr. David Glick, Senior Vice President, Investor Relations and Treasurer. Sir, you may begin.

Executive
David J. Glick

Thank you, operator, and good morning everyone. We appreciate everyone's participation in today's conference call to discuss Burlington's fiscal 2019 second quarter operating results.

Our presenters today are Tom Kingsbury, our Chairman and Chief Executive Officer; Marc Katz, Chief Financial Officer and Principal.

Before I turn the call over to Tom, I would like to inform listeners that this call may not be transcribed, recorded or broadcast without our express permission. A replay of the call will be available until September 5, 2019. We take no responsibility for inaccuracy that may appear in transcripts of this call by third parties. Our remarks and the Q&A that follows are copyrighted today by Burlington Stores.

Remarks made on this call concerning future expectations, events, strategies, objectives, trends or projected financial results are subject to certain risks and uncertainties. Actual results may differ materially from those that are projected in such forward-looking statements. Such risks and uncertainties include those that are described in the company's 10-K for fiscal 2018, and in other filings with the SEC, all of which are expressly incorporated herein by reference. Please note that the financial results and expectations we discuss today are on a continuing operations basis.

Reconciliations of the non-GAAP measures we discuss today to GAAP measures are included in today's press release.

Now here's Tom.

Executive
Thomas A. Kingsbury

Thank you, David. Good morning, everyone. We were very pleased with our second quarter results driven by a comparable store sales gain of 3.8%. Total sales increase of 10.5% and a 10 basis point expansion in adjusted EBIT margin. These results drove a 19% increase in adjusted earnings per share, well ahead of our guidance. We achieved this growth while reducing our overall inventory levels which were up 27% at the beginning of the fiscal year to down 2% at the end of the second quarter. This significant improvement in our inventory position affords us the flexibility to be very opportunistic in what we believe is a very favorable buying environment.

Turning to highlights of the second quarter. This was our 26th consecutive quarter of positive comp sales growth. Our comparable store sales growth exceeded the high end of our guidance by 180 basis points and our new stores continue to perform well versus our underwriting model. We leveraged adjusted SG&A by 30 basis points and expanded our merchandise margin by 30 basis points. Our adjusted earnings per share grew 19% and comparable store inventory was down 7% at the end of the second quarter. Our total sales increased 10.5% driven by an acceleration in comparable store sales from the first quarter trend as well as the performance of our new and non-comp stores, which contributed $115 million in sales for the quarter.

We opened seven