The company attributed its performance to effective inventory management, strong consumer demand and a disciplined approach to reinvesting tariff refunds to deliver greater value to customers.
Burlington Stores delivered strong Q2 FY26 results, with sales rising 11 per cent to $3 billion, gross margin improving to 46.2 per cent and adjusted EPS reaching $2.37.
Supported by sustained earnings momentum and effective inventory management, the off-price retailer raised its full-year adjusted EPS guidance while planning around 115 net new store openings in FY26.
For the second quarter ended August 1, 2026, total sales increased 11 per cent year on year (YoY) to $3.0 billion, while comparable store sales rose 2 per cent. Net income reached $184 million, up from $94 million in the same period last year, and diluted EPS was $2.88.
Adjusted net income, excluding a $41 million after-tax benefit from tariff refunds, was $151 million, or $2.37 per share, compared to $110 million, or $1.72 per share, in Q2 FY25. Adjusted EBIT rose to $210 million, up from $162 million a year earlier, with adjusted EBIT margin improving by 100 basis points.
The gross margin rate expanded to 46.2 per cent from 43.7 per cent, while adjusted EBITDA increased to $324 million from $257 million. Merchandise inventories stood at $1.54 billion, reflecting a 9 per cent increase, driven by new store openings and higher comparable store inventory.
“We are pleased with our strong financial performance in the second quarter. 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,” said Michael O’Sullivan, chief executive officer, Burlington Stores.
First half performance supports upgraded outlook
For the first six months of FY26, total sales increased 12 per cent YoY to $5.85 billion, while net income rose 53 per cent to $299 million, or $4.67 per share.
Adjusted EBIT for the half-year, excluding the impact of tariff refunds and certain lease-related expenses, reached $389 million, compared to $314 million in the prior year. Adjusted net income was $286 million, or $4.46 per share, versus $217 million, or $3.39 per share, in the first half of FY25.
Burlington Stores achieved a 250 basis point increase in gross margin rate to 46.2 per cent in Q2, supported by improved merchandise margin and lower selling, general and administrative expenses (SG&A) as a percentage of sales.
Adjusted SG&A, which excludes product sourcing costs and certain lease expenses, was 26.2 per cent of net sales, down from 26.7 per cent a year earlier.
The company ended the quarter with $1.65 billion in liquidity and $1.91 billion in total debt.
Guidance and strategic outlook
Reflecting its strong first-half performance and commitment to reinvesting tariff refunds, Burlington Stores raised its FY26 adjusted EPS guidance to a range of $11.77 to $11.97, up from $10.17 in the previous year.
The company now expects total sales to grow 10–11 per cent, with comparable store sales up 3–4 per cent.
Adjusted EBIT margin is projected to increase by 20–40 basis points versus FY25, and capital expenditures are forecast at approximately $875 million.
For Q3 FY26, the company anticipates total sales growth of 9–11 per cent and adjusted EPS of $1.60–$1.70.
Burlington plans to open around 115 net new stores during the year, while continuing to prioritise value for customers and operational efficiency, according to the company’s quarterly results.
Fibre2Fashion News Desk
