Burlington Stores Inc. beat analyst estimates on the backs of share repurchases, but the stock fell on lowered guidance.
Adjusted net income for the fiscal fourth quarter rose 0.3 percent to $109.3 million, or $1.49 cents a diluted share, up from $1.43 cents last year and beating the FactSet estimate of $1.46. The number of outstanding shares, though, fell from 76.3 million last year to 73.4 million for the same period.
Burlington stock is falling over 3 percent to $55 in early trading as investors were disappointed with the guidance and the general reaction from traders is that the earnings beat was accomplished through lowering the number of outstanding shares.
In the good news category, net sales for the three months ended Jan. 31 increased 3.7 percent to $1.541 billion from $1.45 billion a year earlier and also topped the FactSet estimate of $1.540. For the full year, the company’s adjusted net income per share rose 26 percent to $2.31 cents over last year’s $1.83 cents on a 5.9 percent rise in sales to $5.09 billion.
“We are pleased with our 26 percent increase in adjusted net income per share, which was driven by our 5.9 percent total sales growth, expansion in earnings before interest, taxes, depreciation and amortization margin, and share repurchase activity,” said chief executive officer Tom Kingsbury.
Comparable-store sales increased 0.1 percent in the fourth quarter, but that was a far cry from last year’s comp sales of 6.7 percent. For the year, comp sales increased 2.1 percent, but again that was lower than 2014’s 4.9 percent increase.
Gross margin declined by 120 basis points to 41.0 percent during the fourth quarter due to increased shrink and markdowns. Overall for the year, gross margin expanded 30 basis points to 40 percent from 39.7 percent.
Looking ahead, Burlington has forecast net sales to increase in the range of 6.5 percent to 7.5 percent for the full fiscal year of 2016. Comp sales are expected to increase in the range of 2.5 percent to 3.5 percent. In the bad news category, the first quarter adjusted net income per share was guided to a range of 44 to 48 cents, which is lower than the FactSet estimate of 49 cents per share.