Burlington Stores Stock Surges on Earnings, Guidance. Off-Price Retailers Are Thriving.

Burlington’s second-quarter same-store sales increased 5% year over year. (Dreamstime)

Burlington Stores stock jumped Thursday after the off-price retailer posted another strong quarter, barreling past earnings expectations and raising guidance for the full year.

Burlington’s second-quarter revenue jumped about 10% from last year to $2.7 billion, better than analysts’ call for $2.6 billion, according to FactSet. Same-store sales increased 5% year over year.

Adjusted earnings for the quarter ended Aug. 2 came in at $1.59 a share, or $1.72 excluding certain expenses associated with bankruptcy acquired leases. Consensus estimates called for earnings of $1.28 a share.

“This was a high-quality earnings beat driven by ahead of plan sales, higher merchandise margin, lower freight expense and leverage on SG&A expenses,” said CEO Michael O’Sullivan.

Burlington stock jumped 7.4% to $301 in premarket trading Thursday. As of Wednesday’s close, the shares are off 1.7% this year.

The second-quarter’s strength gave Burlington’s management team the confidence to raise full-year guidance, O’Sullivan said. Total sales will now increase between 7% and 8% from last year. Prior guidance was for sales to grow 6% to 8%.

Burlington also boosted its adjusted earnings guidance to a range of $9.19 to $9.59 from $8.70 to $9.30 previously. The new range’s midpoint, $9.39, is ahead of the $9.24 analysts have projected. The earnings guidance excludes $25 million of anticipated expenses tied to the acquired leases, the company said.

The retailer also issued a new outlook for the third quarter. Total sales will increase between 5% and 7% from last year, with earnings ranging from $1.50 to $1.60 excluding the acquired leases. The Street’s current projections call for earnings of $1.67 a share.

Write to Sabrina Escobar at sabrina.escobar@barrons.com