Burlington Stores looks for improvements after struggles in 2022
BURLINGTON TWP. – Burlington Stores Inc. has reported a drop in annual sales and profits, but the discounter’s top executive says he’s optimistic for the future.
Michael O’Sullivan, the firm’s CEO, noted a stronger performance in fiscal 2022’s final quarter and said the company could grow in future years at the expense of traditional retailers.
Burlington Stores made mistakes in 2022
“We executed poorly in 2022,” O’Sullivan acknowledged Thursday in a conference call with investment analysts. “Once we corrected these mistakes later in the year, we saw improvement.”
For the fiscal year, Burlington Stores’ sales fell by 7 percent to $8.6 million. Net income dropped by 44 percent to $230 million, or $3.49 per share.
But sales rose by 5 percent for the fourth quarter that ended Jan. 28, O’Sullivan noted. And a 2 percent decrease in comparable-store sales compared favorably to the company’s guidance, which had forecast a decline of 6 percent to 9 percent for the quarter.
“Our number one priority in 2023 is to drive sales,” O'Sullivan said.
Net income for the quarter rose to $185 million, or $2.83 per share. That compared to year-before results of $122 million, or $1.80 per share.
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Why was merchandise depleted at Burlington Stores?
O’Sullivan acknowledged Burlington Stores made mistakes early in fiscal 2022. He noted decisions that left stores with depleted inventories, particularly for items most sought by consumers.
“We think those issues are behind us,” he said.
The company expects comparable-store sales will rise by 5 to 7 percent in its current quarter and by 3 to 5 percent in fiscal 2023.
“We are ready to chase the trend if it is stronger,” said O’Sullivan.
Burlington plans expansion
Burlington Stores, which ended the fiscal year with 927 stores, expects to add a net of 70 to 80 stores in fiscal 2023.
“This is lower than we’d like,” said O’Sullivan, citing the lack of prime real estate locations and lingering supply problems.
He said the company could add 500 to 600 new stores in coming years, with that growth helped by consolidations and bankruptcies for traditional retailers.
“The biggest source of new store locations comes from other retailers closing stores,” O’Sullivan said.
Jim Walsh is a senior reporter with the Courier-Post, Burlington County Times and The Daily Journal.
This article originally appeared on Cherry Hill Courier-Post: Burlington Coat CEO: Discounter to focus on sales growth in 2023
