Burlington rode a home business resurgence to comp gains and an earnings beat in the second quarter.
Net income was $184.3 million, or $2.88 per diluted share, versus $94.2 million, or $1.47 per share, in the year-prior quarter.
Adjusted for one-time events, net income was $189.3 million, or $2.96 per diluted share, versus $101.8 million, or $1.59 per diluted share, in the year-previous period, the company indicated.
A Zacks Investment Research analyst consensus estimate put earnings at $2.18 per adjusted diluted share and revenues at $3.03 billion.
In addition, Burlington received a $41 million after-tax benefit from IEEPA tariff refunds in the quarter. With the financial effects of the tariff excluded, the company earned $151 million, or $2.37 per diluted share, versus $110 million, or $1.72 per diluted share, in the year-past period.
Comparable sales gained 2% year over year in the quarter. Total revenue came in at $3 billion, up from $2.71 billion in the prior-year period, Burlington reported.
As to outlook, Burlington now expects comps to increase in the range of 3% to 4% and adjusted EPS to land between $11.77 and $11.97. In its previous outlook, Burlington anticipated a 2% to 4% comp increase and adjusted EPS of $11.45 to $11.80.
In a conference call, Michael O’Sullivan, Burlington CEO, said the home business had advanced after lapping the tariffs first introduced in April, 2025, after which the company remixed its assortment to modify its position in product categories that were most heavily impacted by duties.
“That turned out to be the right thing to do from a margin and earnings perspective,” he said, “but it had a very significant impact on sales, especially in our home business in the back half of the year. Now, in late Q2 of this year, we’ve started to lap that impact, and we are very happy with what we are seeing. In July, our home business out-comped the chain, and that trend has continued into August. As I said, that’s very important because home becomes a larger proportion of our business later in the year, especially as we get into the fourth quarter.”
O’Sullivan added, “We are seeing a lot of strength in categories like home furnishings, kitchen essentials and toys. As we look forward, we are very happy with our on-order position and our reserve positions in gifting, toys and holiday categories. Overall, I feel like we are set up for success in home in the back half of the year.”
In the call, O’Sullivan spoke about tariff refunds, saying that the Burlington shopper had been pressured by rising prices, a factor the company had an opportunity to address.
“In the second quarter, we received approximately $55 million in tariff refunds,” he said. “These refunds are included in our reported earnings and provided a 64-cent benefit to our second-quarter earnings per share. We intend to fully reinvest these refunds into the business in the back half to deliver even sharper values to our customers. So we expect the direct impact of these tariff refunds to be neutral to full-year earnings. I want to be explicit about the decision that we have made here. Rather than taking a one-time boost to earnings, we are planning to use the refunds to deliver sharper values for our customers. Over the last few years, the rising cost of living has made life difficult for many moderate and low-income families. At Burlington, we already offer great deals. Our plan is to use these tariff refunds to further sharpen values across our assortment.”
O’Sullivan added, “We are pleased with our strong financial performance in the second quarter. Total sales grew 11% on top of a strong 10% increase last year. Comp store sales increased 2% on top of 5% last year, for a solid 7% two-year stack. Excluding the impact of tariff refunds, adjusted EPS grew 38% versus the second quarter of last year, on top of a 39% increase in the prior year. This was driven by a 100-basis-point increase in our operating margin. This represented our 15th consecutive quarter of double-digit EPS growth, reflecting our ability to consistently convert sales growth into margin expansion and exceptional earnings growth.”
