Investment Thesis
Burlington Stores faces significant operational headwinds with flat revenue growth (0.1% YoY) and negative free cash flow of -$227.3M despite $2.9B in sales, indicating unsustainable cash generation. Weak profitability metrics (4% net margin, 6.2% ROE) combined with elevated leverage (1.04x Debt/Equity) and deteriorating liquidity (1.16x current ratio) create structural challenges in the competitive discount retail environment.
Strengths
- Maintains gross margin of 33.9% showing reasonable cost management
- Holds $747.4M in cash providing near-term liquidity buffer
- Adequate interest coverage of 5.0x suggests debt service capacity remains intact
Risks
- Negative free cash flow of -$227.3M with CapEx of $288.7M exceeding operating cash flow, indicating cash burn despite mature business scale
- Zero revenue and net income growth (0.1% and 0.0% YoY respectively) signals market saturation or competitive erosion in discount retail segment
- High leverage (1.04x Debt/Equity, $1.9B long-term debt) combined with weak cash generation creates refinancing risk and limits financial flexibility
Key Metrics to Watch
- Free cash flow trajectory and path to positive FCF generation
- Operating margin expansion and same-store sales trends
- Debt reduction progress and debt-to-EBITDA covenant compliance
Financial Metrics
Revenue
2.9B
Net Income
114.7M
EPS (Diluted)
$1.79
Free Cash Flow
-227.3M
Total Assets
9.8B
Cash
747.4M
Profitability Ratios
Gross Margin
33.9%
Operating Margin
5.0%
Net Margin
4.0%
ROE
6.2%
ROA
1.2%
FCF Margin
-8.0%
Balance Sheet & Liquidity
Current Ratio
1.16x
Quick Ratio
0.49x
Debt/Equity
1.04x
Debt/Assets
0.0%
Interest Coverage
5.02x
Long-term Debt
1.9B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-30T07:49:19.894037 |
Data as of: 2026-05-02 |
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