Burlington Stores extended its long streak of double-digit earnings growth during the second quarter of fiscal 2026, with adjusted EPS increasing 38% as higher sales and operating-margin expansion continued driving substantial operating leverage.
Total sales increased 11% year-over-year to approximately $2.998 billion.
The gain came on top of a 10% sales increase in the prior-year quarter.
Comparable-store sales increased 2%, following 5% growth a year earlier. That produced a two-year comparable-sales stack of approximately 7%.
The company’s adjusted earnings growth significantly outpaced sales.
Adjusted EPS increased 38% to $2.37 from $1.72 after excluding tariff refunds and certain costs associated with bankruptcy-acquired leases.
That increase came on top of 39% adjusted EPS growth in the prior-year quarter.
Burlington has now generated 15 consecutive quarters of double-digit EPS growth, an unusually long stretch of earnings expansion for the retailer.
Management attributed the quarter’s earnings growth largely to a 100-basis-point increase in adjusted EBIT margin.
Reported gross margin increased 250 basis points to 46.2% from 43.7%.
Burlington received approximately $55 million of tariff refunds during the quarter.
However, the underlying margin trend remained positive even when that benefit is removed.
Excluding the tariff refunds, merchandise margin expanded approximately 70 basis points year-over-year.
Freight expense increased about 10 basis points as a percentage of sales.
Adjusted SG&A also improved to 26.2% of revenue from 26.7%, providing another source of operating leverage.
GAAP net income increased to $184 million from $94 million.
Diluted EPS nearly doubled to $2.88 from $1.47.
After excluding the approximately $41 million after-tax benefit from tariff refunds and other adjustment items, adjusted net income reached $151 million compared with $110 million.
Burlington’s treatment of the tariff refunds is also notable.
Management said it plans to reinvest the full $55 million benefit into the business during the second half through sharper customer values rather than retain the one-time windfall as earnings.
As a result, the company expects the direct effect of the tariff refunds to be neutral to full-year profit.
That makes the increase in fiscal-year guidance primarily an underlying operating-performance story rather than a tariff-refund story.
Burlington now expects fiscal 2026 comparable-store sales to increase 3% to 4%.
Full-year adjusted EPS guidance was increased to $11.77 to $11.97, representing projected growth of 16% to 18%.
The retailer’s combination of 11% sales growth and 38% underlying adjusted EPS growth demonstrates significant operating leverage.
More importantly, Burlington has sustained double-digit EPS growth for nearly four years’ worth of quarters, highlighting its ability to convert expansion in sales into higher margins and earnings.
KEY QUOTES:
“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.”
“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 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.”
“Given our intent to invest the refunds in sharper values, we expect the direct impact of tariff refunds to be neutral to full year earnings.”
Michael O’Sullivan, Chief Executive Officer of Burlington Stores
