Burlington Stores announced its results for the second quarter and six months ended August 1, 2015. Comparable store sales increased 5.6%, which follows a comparable store sales increase of 4.7% in Q2 2014 driven by improved execution of the company’s off-price business model.
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Net sales increased 9.6%, or $100.6 million, to $1,144.2 million. This increase includes the 5.6% increase in comparable store sales, as well as an increase of $46.7 million from new and non-comparable stores.
Gross margin expanded by 100 basis points to 39.2% from 38.2% in the second quarter of Fiscal 2014. This more than offset an approximate 50 basis point increase in product sourcing costs that are included in selling, general and administrative expenses (SG&A).
SG&A, less product sourcing costs and advisory fees, as a percentage of net sales was 28.4%, which represented a 60 basis point improvement from 29.0% in the second quarter of Fiscal 2014. This improvement was driven by improved leverage in store payroll and occupancy.
Adjusted EBITDA increased 29.8%, or $17.3 million, to $75.4 million. Sales growth, SG&A leverage and gross margin expansion led to a 100 basis point expansion in Adjusted EBITDA as a percentage of net sales.
Depreciation and amortization expense, exclusive of net favorable lease amortization, increased $1.7 million to $35.8 million.
Interest Expense decreased $10.9 million to $14.6 million from last year, driven by interest savings realized as a result of the 2014 term loan refinancing as well as savings related to principal payments made over the last twelve months on the company's term loan credit facility.
Adjusted tax expense was $10.2 million compared with an adjusted tax benefit of $0.6 million last year. The adjusted effective tax rate was 40.8% vs. 39.9% last year.
The increase in the effective tax rate was the result of a one-time discrete item recorded during the quarter, offset partially by state credits available to the company for its new corporate headquarters in Fiscal 2015.
Adjusted Net Income was $14.9 million vs. a loss of $(0.9) million last year, or $0.19 per share vs. $(0.01) last year. Fully diluted shares outstanding were 76.5 million at the end of the quarter compared with 74.0 million basic shares outstanding last year. ■