Why Burlington Stores Is the Weaker “Outlier” Among Off-Price Winners TJX and Ross

Burlington Stores’ sales declined in Q3, despite what should have been a stronger season for the off-price retailer. Total sales were down 11% on top of a 30% increase in Q3 of last year. Net income was $17 million, and diluted earnings per share was $0.26. Comparable store sales for Q3 decreased 17%. The weaker than expected results came during what has been a generally strong quarter for other off-price companies. TJX Companies, which owns T.J. Maxx and Marshalls, topped profit estimates in the third quarter. Ross Stores Inc. last week raised its guidance given its third quarter sales momentum and improved holiday assortments. Experts previously told FN that the off-price sector was poised to have a strong holiday season, thanks to unusually high inventories across retail and a surge of deal-hungry consumers. This juxtaposition was not lost on Burlington CEO Michael O’Sullivan, who described Burlington’s results this year as “disappointing” and the company as an “outlier within off-price.” “As an off-price retailer, we should be able to drive stronger performance than this,” he said in a Tuesday call with investors. O’Sullivan said a pullback on higher pricing and more aggressive markdowns to clear through slow-moving products in Q3 contributed to the weaker sales and profits.

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