With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

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The companies on this annual list make a conscious effort to be supportive, inclusive workplaces.

2025 Best Large Workplaces for Women_Burlington Stores, Inc._US1__68a71ffe383bc91cadd06a8c_1

Employees say:"Burlington truly is a caring company that offers everyone an opportunity to grow and flourish and reach their full potential within the organization. Burlington actively invests in the growth and advancement of its team members. I am proud to work for a company who considers the well-being of their associates and provides such a supporting environment for personal and professional development."

100 Best Large Workplaces for Women

See which workplaces made this year's list.

2025_GPTW_Retail_Large_Burlington Stores, Inc._US1__685d56f6023fa8a02634236e_1

Best Large Workplaces in Retail

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

GPTW Retail Large 2024-Burlington Stores, Inc._US1__20240712204823_6

Employees say:"All ideas are valued and heard. Senior leadership exudes the company's culture and encourages us to step out of our comfort zone. I have autonomy to make the decisions for my team and to take appropriate risks. My senior leadership truly listens and respects my opinions. We don't always agree, however I have never felt ashamed when redirected or my ideas were not implemented."

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

GPTW 2023 Best Workplaces Retail Large Burlington Stores, Inc_5

Employees say: 
 
"All ideas are valued and heard. Senior leadership exudes the company's culture and encourages us to step out of our comfort zone. I have autonomy to make the decisions for my team and to take appropriate risks. My senior leadership truly listens to my methodology and respects my opinions."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Great Places to Work in Retail Large- 2022-Burlington Stores, Inc._1400608-4

Employees say: 
 
“This is truly a diverse caring company. The organization is super flexible with work life and personal life and will help out in any they can to help you get the job done if you need support. Everyone that I've had the pleasure to work with are always smiling, they are kind, willing to help resolve questions or concerns. I feel very comfortable going to other internal departments to seek help when it's needed or just to get to know them and learn what they do it helps build strong relationships with my peers. It feels good when I walk down the hallway and I greet my peers and they greet back with a smile. I've learned so much working at Burlington and I love what I do. I look forward to many more years with them!”

This year’s Fortune 500 marks the 68th running of the list.

Our 2021 list of the 100 best companies to work for, as ranked by their employees. See which companies made the list.

100 Best Companies 2021-70-Burlington Stores, Inc.

While off-price retailers like Burlington Stores are typically among the fastest-growing chains, not having e-commerce really dinged the company during the early weeks of the pandemic when stores were largely closed. But Burlington still paid employees who got sick from COVID up to two weeks’ pay while they quarantined. As stores reopened in early summer, Burlington brought back its furloughed employees and restored pay to initial levels.

Fortune 100 Best Companies to Work For

These companies foster supportive cultures, where employees find opportunities for growth with help from their colleagues.

Best Large Workplaces New York 2021-Burlington-Stores

Employees say: 
 
“The people here were all super nice and welcoming when I first started. At Burlington, the managers are super nice and see mistakes as learning opportunities and as a part of doing business.”

Best Large Workplaces in New York

See which retailers made this year's list.

Best-Workplaces-Retail-2021-Burlington-Stores

Employees say: 
 
“This is a very welcoming company. They don't judge people and their value based on "titles" and there are many opportunities to improve and grow. Our associates are very friendly, fun, welcoming and diverse making Burlington such a fun place to work.”

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-471-Burlington Stores

2020 was a brutal year for retail and Burlington Stores was no exception. The company reported a loss of $216.5 million in net income for 2020 and a 21% decrease in total sales compared to 2019. Yet, as bargain hunters emerge from their pandemic-induced hibernation, the New Jersey-based off-price retailer could benefit; in the first quarter of 2021, the company reported a 35% year-over-year sales increase.

Best-Workplaces-Retail-2020-Burlington

Employees say: 
 
"Very impressed with our opening after COVID. Not only was management ready to deal with the unexpected possibilities of re-opening, but they were well organized for the additional responsibilities of our 50% off sale."

The companies on this year's list make a conscious effort to be supportive, inclusive workplaces.

Best Workplaces Women 2020-Burlington Stores, Inc

Employees say: 
 
“There are a lot of women in management. Makes me feel like they take the role of women in the workplace seriously.”

This year's Fortune 500 marks the 66th running of the list.

F500-2020-424-Burlington-Stores

Discount apparel retailer Burlington Stores has recently tacked against prevailing trends in its industry. It opened 76 new physical locations in 2019, and it announced in March 2020 that it would wind down its ecommerce operations.

From groceries to apparel to home decor, see which companies made the list.

Burlington Stores-Best Workplaces in Retail 2019

Employees say: 
“There is a smile on most associates' faces and the offices in general have a upbeat nature to it. We are given the opportunity to grow and it shows through Burlington's efforts to engage and develop employees.”

At the Best Workplaces for Women, company leaders foster mentorship and career growth.

Burlington Stores-Best Large Workplaces for Women 2019

An employee supervisor says: 
 
"They hire people because their potential as an employee - they don't care what preference you have in your personal life, or gender, or nationality. They recognize you as a good employee and encourage you to keep growing with the company." 
 
Read the Great Place to Work review .

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

Best Large Workplaces for Women 2018_Burlington Stores

Employees say: 
 
&nbsp; 
 
"A wonder management team of women who make it fun and engaging for all the employees." 
 
&nbsp; 
 
Read the Great Place to Work review .

This year's Fortune 500 marks the 63rd running of the list.

Fortune’s annual list of the 100 Best Workplaces for Women highlights companies with generous benefits, flexible schedules, and an emphasis on balancing work and life. 

Best Workplaces for WomenBurlington Stores, Inc.

Employees say: "We are a retailer that has a strong focus on being a caring company and serving a purpose in the community. It's great to be able to provide our customers with great values, but it's especially heartwarming to be part of something bigger and make a difference in our local communities nationwide." 
 
&nbsp; 
 
"Upper level management cares and interacts with all employees. Your voice counts. " Read the .

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Burlington Stores, which operates the Burlington Coat Factory chain, is an off-price retailer of high-quality branded merchandise at deep discounts, typically selling items for 60% off department store prices. Its first store opened in Burlington, N.J., in 1972. It now has around 1,100 stores in 46 states, and its merchandise assortment has expanded to include women’s ready-to-wear apparel, menswear, youth apparel, beauty products, and more. Like rival businesses including Ross Stores and TJX, Burlington not only sells close-out items that went unsold at department stores; it also offers merchandise made by top brands, which sell them directly to Burlington Stores.

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Burlington Stores (BURL): Company Profile, Stock Price, News, Rankings

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Burlington Stores

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Hello, everyone, and welcome to Burlington Stores Inc. First Quarter twenty twenty five Earnings Call. Please note that this call is being recorded. After the speakers' prepared remarks, there will be a question and answer Thank you. I'd now like to hand the call over to David Glick, Group Senior Vice President, Investor Relations and Treasurer.

Thank you, operator, and good morning, everyone. We appreciate everyone's participation in today's conference call to discuss Burlington's fiscal twenty twenty five first quarter operating results. Our presenters today are Michael O'Sullivan, our Chief Executive Officer and Kristen Wolf, our EVP and Chief Financial Officer. Before I turn the call over to Michael, I would like to inform listeners that this call may not be transcribed, recorded or broadcast without our expressed permission. A replay of the call will be available until 06/05/2025.

We take no responsibility for inaccuracies that may appear in transcripts of this call by third parties. Our remarks and the Q and 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 ks and in our 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. As a reminder, as indicated in this morning's press release, all profitability metrics discussed in this call exclude costs associated with bankruptcy acquired leases. These pre tax costs amounted to $6,000,000 each during the fiscal first quarters of twenty twenty five and 2024. Now here's Michael.

Thank you, David. Good morning, everyone, and thank you for joining us. I would like to cover four topics this morning. Firstly, I will briefly discuss our first quarter results. Secondly, I will talk about our forward looking guidance.

Thirdly, I will comment on the two biggest drivers of uncertainty right now, the impact of tariffs and the state of the consumer. Finally, I will share some thoughts on our longer term prospects. After that, I'll hand it over to Kristen to walk through the financial details. Then we will be happy to respond to your questions. Okay.

Let's talk about our q one results. Total sales grew by 6% on top of 11% growth last year. Meanwhile, our comp sales were flat on top of 2% comp growth last year. Both metrics were at the midpoint of our guidance. As we discussed in our Q4 call in early March, the quarter started off slowly with the trend in February being negatively impacted by unfavorable weather and a slower pace of tax refunds versus last year.

We were pleased that the sales trend picked up in the March and April period once these factors began to normalize. Moving on to Q1 earnings. Our EBIT margin increased 30 basis points, and our adjusted EPS was up 18% over last year despite a flat comp. There were two drivers of this ahead of plan earnings performance. Firstly, there was some timing favorability between Q1 and Q2, mostly related to receipts.

We expect this favorability to slip around in Q2. Secondly, in early Q1, in anticipation of the margin pressure that we are likely to feel from tariffs later in the year, we began to aggressively go after margin and expense savings opportunities across the p and l. We were able to capture some of these savings during the first quarter. Okay. Let's talk about the rest of the year.

Our comp guidance for q two and for the full year 2025 is flat to up 2%. In fact, our full year comp sales and earnings guidance has not changed from the outlook we shared in early March. We feel good about our ability to achieve this guidance, but we recognize that the level of external uncertainty has increased over the last couple of months. So we are reaffirming our full year guidance subject to a few key assumptions that Kristen will describe later in the call. I would now like to discuss the major drivers of external uncertainty, specifically the impact of import tariffs and the state of the consumer.

I will start with tariffs. As I have said previously, disruptions in supply for the retail industry often turn out well for off price. Events like financial crises, disruptive weather, economic downturns, port strikes, and other forms of disruption often lead to excess supply, which off price retailers can benefit from. That said, we think that the potential impact of tariffs is more complex and carries greater risk than other types of disruption. The tariffs that were announced in early April were of a scope and a scale well beyond the expectations of most analysts.

The initial effect of these tariffs was to effectively shut down the flow of merchandise from China. If that had continued, then it would have been bad for consumers and bad for retailers, and that includes off price retailers. For the past two weeks, since the tariffs on imports from China were cut from 145% to 30%, merchandise vendors have been scrambling to catch up. This stop start surge volatility is likely to lead to shortages in some merchandise categories, but it might also create excess supply in others. We see both risks and opportunities in the months ahead, and we are managing our business accordingly.

In this situation, we need to be flexible and nimble. One last point. We think it is very important to look through the short term disruption caused by tariffs. Whatever level these tariffs settle at, the vendor base will adjust. Production capacity will migrate to countries that have the lowest all in costs, the lowest all in costs including the tariff.

In some cases, vendors are already making these sourcing shifts. In other categories, it may take a year or two to adjust. My point is that the way to think about tariffs is that they are just one more thing. Yes. They are going to create uncertainty in the short term, which we will navigate, but they are not likely to affect the longer term structural trends in our industry.

As we have discussed in the past, we see these longer term trends as being favorable for off price and our business. So the next six to twelve months could be challenging. But when we get to the other side, if we navigate this well, we should be in good shape. In fact, we expect to come out ahead. Okay.

Let me talk about the other major source of uncertainty, the state of the consumer. Clearly, we saw a deceleration in our comp trend from q four to q one. Our comp growth in the first quarter was flat. This was the midpoint of our comp guidance range, but please do not infer from this that we are happy with a flat comp. We are not.

We expect to do better. To understand this trend, we have analyzed our own internal sales data. This shows that the slowdown from q four to Q1 was broad based across trade areas with different demographic characteristics. This is just one quarter, so it is too early to say if the slowdown that we saw in our trend from q four to q one is the start of a broader pullback in consumer spending. In addition to this trend, we are also somewhat concerned about macroeconomic indicators.

Many economists have raised their probability estimates for a recession later this year. And there are also concerns that inflation will go up as tariffs work their way through the economy. The good news is that we have a playbook for these situations. It's our standard playbook. We will manage our business carefully and flexibly, and we will be ready to chase the sales trend if it turns out to be stronger.

I would like to wrap up with some comments on the longer term prospects for our business. The two items that I have just discussed, the impact of tariffs and the state of the consumer, are front and center for us and for investors right now. They create risks and opportunities in the short term that we need to navigate. But we are also focused on driving to our full potential over the longer term. As discussed before, we believe that there are longer term structural and competitive factors that will continue to be favorable for off price versus other forms of retail.

And we believe that at Burlington in particular, we have the opportunity to significantly grow our market share, sales, and earnings over time. With that as a setup, there are two aspects of our Burlington Two Point o full potential strategy that I would like to comment on. Firstly, we have talked a lot over the last couple of years about merchandising two point o, the new systems, processes, and tools that we have rolled out to enable our buyers and planners to more effectively and rapidly respond to changes in the external environment. These new capabilities have been very important over the past couple of months as we have made multiple revisions to our assortment plans for the fall season, pivoting from categories that may face shortages to those with stronger supply and remixing and remodeling our margin plans to find offsets to the impact of tariffs. A couple of years ago, we would not have had the transparency and the agility to make these kinds of adjustments.

We expect that as the year goes on, the environment will continue to be volatile and dynamic. Our merchandising two point o capabilities are going to be very important for our buyers and planners to manage through this external volatility. Secondly, I would like to comment and provide an update on our new store pipeline. Our sales guidance for 2025 is predicated on opening 100 net new stores this year. We remain very confident in our ability to hit this number of openings.

We have also been active over the last few months in building out the pipeline for 2026. We were recently able to acquire 46 leases through the bankruptcy process for Jo Ann's Fabrics. We are very excited about these locations. Adding these stores to the 2026 pipeline, we are optimistic about hitting our 100 net new store target for next year. The silver lining of the current volatile environment is that it is likely to drive further consolidation of bricks and mortar stores, and these closures should provide more opportunities to expand our store footprint.

Okay. At this point, I would like to turn the call over to Kristen. Kristen?

Thank you, Michael, and good morning, everyone. I plan to cover a few topics this morning. I will start with some additional color on our first quarter performance. Then I will share details on our guidance for the second quarter and for the full year. And finally, I will finish up by discussing three critical assumptions that underpin our 2025 sales and earnings guidance.

Starting with the first quarter, total sales grew 6%, while comp store sales were flat, which was at the midpoint of our guidance range. The gross margin rate for the first quarter was 43.8%, an increase of 30 basis points versus last year. This was driven by a 20 basis point increase in merchandise margin and a 10 basis point decrease in freight expense. Modest IMU pressure was more than offset by the benefit of faster inventory turns. Product sourcing costs were $197,000,000 versus $183,000,000 in the first quarter of twenty twenty four.

Product sourcing costs increased 10 basis points as a percentage of sales versus last year, as 10 basis points of supply chain leverage, driven by productivity improvements and the timing of receipts, was more than offset by increased asset protection investments. The timing of receipts benefited Q1, but will negatively impact Q2. Adjusted SG and A costs in Q1 decreased 30 basis points versus last year. A portion of this leverage on a flat comp was due to favorable timing of store expenses that will shift into Q2. The balance of the SG and A leverage was due to the expense savings opportunities that Michael described earlier.

Q1 adjusted EBIT margin was 6.1%, thirty basis points higher than last year, which was well above our guidance range of down 90 to down 50 basis points. Our adjusted earnings per share in Q1 was $1.67 which came in above our guidance range. This represents an 18% increase versus the prior year. At the end of the quarter, comparable store inventories were down 8% versus the end of the first quarter of twenty twenty four. Our reserve inventory was 48% of our total inventory versus 40% of our inventory last year.

In dollar terms, our reserve inventory was up 31% compared to last year, reflecting the great deals we were able to make to get ahead of tariffs. We are very pleased with the quality of the merchandise and the values we have in reserve. We ended the quarter with approximately $1,100,000,000 in total liquidity, which consisted of $371,000,000 in cash and $748,000,000 in availability on our ABL. We had $100,000,000 outstanding in outstanding borrowings at the end of the quarter on our ABL. During the quarter, we took advantage of the volatility in our stock price and repurchased $105,000,000 in common stock.

At the end of Q1, we had $158,000,000 remaining on our share repurchase authorization, which expires August 2025. In addition, our Board of Directors just approved a new two year five hundred million dollars share repurchase authorization. In Q1, we opened seven net new stores, bringing our store count at the end of the quarter to eleven fifteen stores. This includes 14 new store openings, four relocations, and three closings. I will now move on to discuss our outlook for the second quarter and for the full fiscal year.

Our second quarter guidance excludes approximately $11,000,000 of expenses associated with bankruptcy acquired leases. We expect total sales to increase 5% to 7%. Comp store sales are assumed to be flat to plus 2%. We are expecting adjusted EBIT margin to be in the range of down 30 basis points to flat versus the second quarter of twenty twenty four. This results in an adjusted EPS outlook in the range of 1.2 to $1.3 versus last year's second quarter adjusted earnings per share of $1.24 Excluding the roughly $12,000,000 pretax timing shift, which positively impacted the first quarter, we believe second quarter earnings per share guidance would otherwise be about $0.14 higher.

I will now review fiscal twenty twenty five guidance. This guidance excludes approximately $33,000,000 in 2025 associated with bankruptcy acquired leases, compared to $16,000,000 in 2024. For 2025, we still expect total sales growth in the range of 6% to 8%. This assumes 100 net new store openings this year. We anticipate that most of these stores will open in the latter half of the year.

We are still forecasting comp store sales to increase in the range of flat to 2% and our adjusted EBIT margin to be in the range of flat to an increase of 30 basis points versus last year. All of this results in adjusted earnings per share guidance in the range of $8.7 to $9.3 This is consistent with our initial FY 'twenty five guidance. Capital expenditures, net of landlord allowances, are still expected to be approximately $950,000,000 in fiscal twenty twenty five. Let me wrap up by reinforcing the point that our sales and earnings guidance for fiscal twenty twenty five is unchanged from the outlook that we provided in March. But we recognize that the level of uncertainty in the external environment has significantly increased since then.

Of course, guidance is always subject to risks and uncertainties, but it is important to call out that our FY 'twenty five guidance is contingent on three specific assumptions. First, the current tariff rates, 30% on imports from China and 10% on imports from other countries, do not increase through year end. Secondly, that the inflationary impact of tariffs across the retail industry is modest and does not trigger a significant deterioration in retail sales trends, especially among our core lower income customers. And thirdly, that the volatility in imports does not drive a material or sustained increase in ocean freight expense above our contracted rate. I will now turn the call back over to Michael.

Thank you, Kristen. Before I hand it back to the operator for your questions, I would like to summarize the main points from this morning's call. In the first quarter, our total and comp store sales growth were at the midpoint of our guidance, while our earnings were well ahead. We are maintaining our full year 2025 guidance, but we recognize that the external environment has become more uncertain. The two major sources of this uncertainty are tariffs and the state of the consumer.

Tariffs are likely to create volatility in off price supply, and we anticipate that they will pressure our merchandise margin. But at their current levels, we are well positioned to navigate these issues. After that, we see reasons for caution on the state of the consumer, especially if there is a slowdown in the economy or a significant pickup in inflation. The good news is that in these situations, we have a playbook. And as the last couple of years have demonstrated, we have gotten better at executing this playbook.

We're managing our business cautiously, focusing on offering great value to the customer, and we are ready to react if we see supply opportunities or stronger sales trends. I would now like to turn the call over for your questions.

We're opening the floor for question and answer Your first question comes from the line of Matthew Boss of JPMorgan. Your line is now open.

Great, thanks and appreciate all the color. Michael, maybe larger picture, I'm interested in whether you think the disruption caused by tariffs is good or bad overall for off price? And separately, any initial reactions to the recent news that tariffs have been struck down by the Court of International Trade?

Well, good morning, Matt. Thank you for the question. I think I should answer the last part of your question first. I think probably like everybody else on this call, we read the news last night that the tariffs had been struck down. It feels like another curveball that demonstrates the importance of being flexible and nimble.

But candidly, we don't yet know what it means. Is the judgment temporary or permanent? Does it cover every category? Does it cover every country? It certainly doesn't feel like the end of the matter, I guess we'll get more information in the coming days.

Until we know more, I think it's probably better for me not to speculate. So for now, our planning assumption for our guidance, comments, and our answers this morning is that tariffs remain at current levels. In other words, 30% on imports from China and 10% on imports from other countries. Once we better understand the court decision, obviously we'll adjust and update our plans. So with that said, let move on to the first part of your question.

Is the disruption caused by tariffs good or bad for off price? Our view, I think, is that disruption is usually good for off price, but with tariffs, it kinda depends. And let explain what I mean. Yeah. Until a couple of weeks ago, tariffs on imports from China were 145%.

At that tariff level, production and shipping of imports from China pretty much got down. You know, China is still an important source country across the retail industry. So if that had continued, it would likely have led to shortages in many, many import categories. At that point, it was very difficult to see how that shutdown was going to be good for off price. Now in the last two weeks, things have changed.

Things have changed a lot. The ninety day reduction in tariffs for China from 145% to 30% has completely reversed the dynamic. There's now a huge rush on production and shipping across the industry. Now the court decision last night could add to that rush. Now as an off price retailer, this is starting to feel like much more familiar territory.

Instead of shortages, This topsy-turvy stop start surge has has the potential to create attractive buying opportunities. Now it you know, it's very situation's very dynamic, so it remains to be seen if if that will happen. But but, yes, I I would say compared with two weeks ago, it's starting to look like the disruption caused by tariffs could could turn out very well for off price.

That's great color. And and maybe just a follow-up. On an assumption that tariffs don't go away and remain at current levels, can you elaborate on the work that you've done and just why you feel confident in still hitting your original guidance despite margin pressure from tariffs?

Good. Yes. Yeah. Let me let me talk through what we've done in the last few months. The starting point was actually the initial round of tariffs on on China.

If you recall, I think it was in early February, the US announced a 10% tariff on all imports from China. That was then raised to 20% in early March. Now at that early stage, we began to look for ways that we could absorb and offset the impact of those tariffs. You know, obviously, the size of the challenge grew enormously as the tariffs ramped up to a 45% in April. Then two weeks ago, they suddenly dropped back down to 30.

And then based on last night's court judgment, now maybe there'll be less. We don't know for sure. Anyway, as I said, in early March, we began to identify and pursue numerous actions we could take that might help offset the potential impact of tariffs on our merchandise margin. So let me provide, you know, some examples of of those actions. Firstly, as you might expect, we started by looking at opportunities to switch away from products or brands or categories that have more sourcing exposure to China to those that have less exposure to China.

Now there are limits to that, but because we, Burlington, directly import very little of the merchandise that we sell, we actually have a lot of flexibility. It depends on the merchandise category. Now as part of that exercise, we worked very closely with our vendors. We have thousands of vendors, and I would describe our vendors as being very entrepreneurial. It helps that at Burlington, we're growing rapidly.

So our vendors know that they have the opportunity to win a larger slice of our business if they work hard to absorb the impact of tariffs. Another action that we started to take in early March, and Kristin referenced this in her remarks, is that we worked with vendors to find buying opportunities in the inventory that they already had here in The United States. Now, of course, this is merchandise that did not incur any tariffs. In the first quarter, we were able to make some great buys and we've packed those goods away in reserve with a plan to release them later in the year. So in addition to remixing our sales plans and working with vendors, in early March, we also began a cross functional effort to build a war chest.

That is actually what we're calling it internally. And that war chest is comprised of numerous margin and expense actions. For example, we've tightened up our inventory plans, looking for places where we can drive a faster turn and squeeze out some margin dollars. We've taken up plans for businesses that are naturally higher margin, where we think that we may have incremental sales opportunity. We've accelerated some of the savings initiatives that we are pursuing in our supply chain organization.

We've gone after productivity and process improvements in stores, and we've pursued numerous savings opportunities in other SG and A line items. As I said earlier, we don't yet know the implications of last night's decision by the Court of International Trade, but no matter how that turns out, I think the work that we've done over the last few months has put us in a pretty good position. Even if the tariffs stay at current levels, 30% on imports from China and 10% for other countries, with the offsetting margin and expense savings I've just described, we still feel like we have a pretty good path to our original guidance.

Your next question comes from the line of Ike Boruchow of Wells Fargo. Your line is now open.

Hey, good morning. Michael, a couple of non tariff questions, if that's okay. Curious if you could maybe dig into a little bit the cadence of the monthly comp sales trend to the first quarter, February, March, April. And also any color you can provide maybe on the trend that you've seen May month to date would be super helpful.

Morning, Ike. It's Kristen. I'll actually take the non tariff question. Back in February, our comp sales were down about 2%. And as we discussed on our Q4 call in early March, we were fairly confident that the weakness in February was really attributable to two factors: the disruptive weather versus last year in our key regions in the Northeast and the Midwest and then secondly, the timing of tax refunds versus last year.

Our core customers are very sensitive to the timing of tax refunds, specifically as it relates to the earned income tax credit in mid late February. But sure enough, as we got into March, our sales trend began to pick up. Our stores are closed on Easter Sunday, so with the timing of Easter this year, we had one more day in March and one less day in April. So from a comp sales perspective, we look at both months combined. And our comp growth for the MarchApril combined period was up 1%.

So this is certainly better than February, but we would like to be doing better than that. And as for the last part of your question, May month to date, the trend in May has been fairly similar to that of the March and April combined trend at about the middle of our Q2 guidance range.

Got it. Thanks, Kristin. And then maybe just one more. Can you walk us through this first quarter sources of upside as well as the expense shift details into Q2?

Great. Yes. So Q1 adjusted EBIT margin increased 30 basis points despite a flat comp. Earnings per share was $1.67 That represents about a $0.30 beat to the midpoint of our guidance. And there were two drivers of that beat or that higher earnings performance.

First, as you said in your question, there was a timing shift between the first and second quarter. This was primarily in supply chain, receipt timing, as well as some store related and SG and A expenses. This favorability will negatively impact Q2 and is worth about half of that $0.30 beat or about $0.14 And the second, as Michael referenced just a moment ago, early in the quarter, we began to aggressively go after savings opportunities across the P and L. We did this in anticipation of the potential impact from tariffs, and we were able to capture some of these savings during the first quarter, and that makes up the balance of the Q1 beat. Those savings are across the P and L and will be used to help offset the anticipated cost impact of tariffs later in the year.

Your next question comes from the line of Lorraine Hutchinson of Bank of America. Your line is now open.

Thanks. Good morning. Michael, you said that the comp performance in Q1 was broad based. Others have said lower income consumers have actually been an area of strength for them. Are you seeing this?

And I'd also be interested in any other call outs in terms of comp trends for different demographic groups.

Good morning, Lorraine. Thank you for the question. Yes, as I said in the prepared remarks, our slowdown in comp growth from Q4 to Q1 was fairly broad based affecting stores in all demographic trade areas. Now when we look at our stores that are in lower income trade areas, those stores outperformed the rest of the chain in Q4 and throughout 2024, and that relative outperformance continued into Q1. In other words, yes, they slowed down from Q4 to Q1 along with the rest of the chain, but relatively speaking, their comp sales trend continued to be stronger than the chain as a whole.

Now we've seen that relative strength in lower income trade areas for a couple of years now. Now, of course, for us, this is something that matters a lot. These are our core customers. And these shoppers were badly impacted in 2022 by the loss of pandemic era benefits and by the higher cost of living. But we've seen a nice recovery with these customers in the last couple of years.

As you'd expect, we're watching the trend for those customers very closely. On the other part of your question, other callouts on demographics. I know that many investors have questions about Hispanic consumers. So let me talk about what we're seeing in the data there. In addition to segmenting our stores based on income of the trade area, we also analyze our stores based on the mix of households in the trade area that are Hispanic.

Again, this is a very important customer for us. And again, the data tells quite a similar story. In 2024, our stores in high Hispanic trade areas had a slightly higher comp trend than the chain, and that slight outperformance continued in Q1. So from Q4 to Q1, those stores slowed down along with the rest of the chain, but again, their relative outperformance continued. So no specific or unique concerns based on the data at this point.

Now, the only exception to what I've said is actually stores along the southern border. In 2024, stores along the southern border, and we have quite a few, had a significantly higher comp trend than the chain. But in Q1, they underperformed the chain. In other words, those border stores fell off significantly versus other stores. The same thing, I think, has been repeated or reported by other retailers.

And I think the reasons are probably obvious and specific to the border. One last point, let me just talk about trade down customers. As I've said previously, a trade down shopper for us is not necessarily a high income customer visiting our store for the first time. They're just as likely or more likely to be a middle income customer who's coming to our store more often. So it's difficult to assess down activity just based upon income demographics.

It's easier for us actually to see trade down activity by looking at sales trends by price point in the store. So in Q1, we continue to see strong comp trends at higher price points. In other words, the customers voting for elevated merchandise, especially for key brands, And we see that data as evidence of potential trade down traffic in our stores.

Burlington Stores (BURL) Q1 2026 Earnings Call Transcript

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