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Proprietary and confidential Burlington Stores Investor PresentationMarch 2025
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2 This presentation contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about Burlington Stores, Inc., together with its consolidated subsidiaries including, without limitation, Burlington Coat Factory Warehouse Corporation and its operating subsidiaries (“Burlington” or the “Company”), the industry in which Burlington operates and other matters, as well as management’s beliefs and assumptions and other statements regarding matters that are not historical facts. For example, when Burlington uses words such as “projects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “should,” “would,” “could,” “will,” “opportunity,” “potential” or “may,” variations of such words or other words that convey uncertainty of future events or outcomes, Burlington is making forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Burlington’s forward-looking statements are subject to risks and uncertainties. Such statements may include, but are not limited to, those about our long-term prospects and the effects of our Burlington 2.0 initiatives, as well as statements describing our outlook for future periods. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by Burlington include: general economic conditions, such as inflation, and the domestic and international political situation and the related impact on consumer confidence and spending; competitive factors, including the scale and potential consolidation of some of our competitors, rise of e-commerce spending, pricing and promotional activities of major competitors, and an increase in competition within the markets in which we compete; seasonal fluctuations in our net sales, operating income and inventory levels; the reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located; our ability to identify changing consumer preferences and demand; our ability to meet evolving regulatory requirements and stakeholder expectations regarding environmental, social or governance matters; extreme and/or unseasonable weather conditions caused by climate change or otherwise adversely impacting demand; effects of public health crises, epidemics or pandemics; our ability to sustain our growth plans or successfully implement our long-range strategic plans; our ability to execute our opportunistic buying and inventory management process; our ability to optimize our existing stores or maintain favorable lease terms; the availability, selection and purchasing of attractive brand name merchandise on favorable terms; our ability to attract, train and retain quality employees and temporary personnel in sufficient numbers; labor costs and our ability to manage a large workforce; the solvency of parties with whom we do business and their willingness to perform their obligations to us; import risks, including tax and trade policies, tariffs and government regulations; disruption in our distribution network; our ability to protect our information systems against service interruption, misappropriation of data, breaches of security, or other cyber-related attacks; risks related to the methods of payment we accept; the success of our advertising and marketing programs in generating sufficient levels of customer traffic and awareness; damage to our corporate reputation or brand; impact of potential loss of executives or other key personnel; our ability to comply with existing and changing laws, rules, regulations and local codes; lack of or insufficient insurance coverage; issues with merchandise safety and shrinkage; our ability to comply with increasingly rigorous privacy and data security regulations; impact of legal and regulatory proceedings relating to us; use of social media by us or by third parties at our direction in violation of applicable laws and regulations; our ability to generate sufficient cash to fund our operations and service our debt obligations; our ability to comply with covenants in our debt agreements; the consequences of the possible conversion of our convertible notes; our reliance on dividends, distributions and other payments, advance and transfers of funds from our subsidiaries to meet our obligations; the volatility of our stock price; the impact of the anti-takeover provisions in our governing documents; impact of potential shareholder activism; and each of the factors that may be described from time to time in our filings with the U.S. Securities and Exchange Commission, including under the heading “Risk Factors” in our most recent Annual Report on Form 10-K. For each of these factors, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended.Many of these factors are beyond Burlington’s ability to predict or control. In addition, as a result of these and other factors, Burlington’s past financial performance should not be relied on as an indication of future performance. The cautionary statements referred to on this slide also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by Burlington or persons acting on Burlington’s behalf. Burlington undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Furthermore, Burlington cannot guarantee future results, events, levels of activity, performance or achievements.This presentation includes certain non-GAAP financial measures as defined by SEC rules. Reconciliations of those measures to the most directly comparable GAAP measures are available in the Appendix.
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Agenda•Company Overview•Off-Price Retail•Retail Market Share•Burlington Full Potential•Burlington 2.0 Strategy•Financial Performance•CSR Progress3
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Company Overview 4 Nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories, and home merchandise at everyday low prices.National footprint with 1,108 stores in 46 states, Washington D.C. and Puerto Rico; attractive store economics and the potential to expand store base to 2,000 stores.Strong track record of results but, based on off-price benchmarks, still has significant performance upside to achieve its financial “Full Potential”.Strong leadership team with extensive experience in merchandising and operations across the off-price, dept. store, and specialty retail sectors.
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5% 5%2%5%3% 3% 3%15%**-13%^4% 4%2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024$4,428$4,815$5,099$5,566$6,003$6,643$7,261$5,752$9,307$8,685^$9,571$10,6178.7%9.3%9.5%10.5%11.5%11.9%12.1%-1.1%11.3%8.1%9.4%10.4%2013 2014 2015 2016 2017(52weeks)2018 2019 2020 2021 2022 2023(52weeks)2024Net Sales ($)Adj. EBITDA MarginLadies Apparel21%Accessories and Shoes27%MensApparel17%Kids Apparel and Baby12%Home20%Outerwear3%Adjusted EBITDA is a non-GAAP measure. Please see the Appendix for the reconciliation to its most comparable GAAP measure.Net sales on a 53-week basis for Fiscal 2017 and Fiscal 2023 were $6,085 million and $9,709 million, respectively.Fiscal 2024 and Fiscal 2023 adjusted EBITDA margin excludes $16 million and $18 million, respectively, of expenses associatedwith bankruptcy acquired leases.**Compared to FY2019^Net sales and comparable store sales decline driven by strong results in the prior period, as well as economic pressure on our core customers and promotional activity throughout the retail environment Business Highlights 5Source: Company filings. Strong History of Growth Annual Comparable Store Sales Growth National Store FootprintWest142 StoresMidwest198 StoresNortheast223 StoresWA18OR7CA112NV13ID3MTWYUT9AZ25NM5TX123OK16CO16KS9NE5SD2ND1MN14IA5MO12WI16IL45IN19MI30OH31AR8LA11MS4AL12TN 17FL119GA37SC13NC36VA33WV1KY 9PA42NY70VTME2NH6MA25RI6CT16NJ53DE3MD24Southeast338 StoresSouthwest207 StoresPR22AK2 Broad Merchandise Assortment (FY2024)* Not meaningful. Pandemic era results* Not meaningful. Pandemic era results*Covid EraDC1
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Agenda•Company Overview•Off-Price Retail•Retail Market Share•Burlington Full Potential•Burlington 2.0 Strategy•Financial Performance•CSR Progress6
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Off-Price RetailOff-Price retail offers branded apparel, footwear, accessories, home, and other merchandise at significantly lower prices versus other retailers.Off-price retailers source these great values by taking advantage of disruptions and cancellationsin the supply chain for this merchandise.The assortment is continuously refreshed with new and exciting bargains and is presented in a self-service “treasure hunt” shopping environment.“It’s the same branded item but up to 60% off versus other retailers”; this is a powerful consumer proposition and has driven off-price growth.7
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8Source: Circana/Checkout *Spend weighted customer breakdown as of 12 months ended Dec’24 for Total Off-Price and Total US; Off-price includes Burlington Off-price ShoppersOff-Price has strong appeal across different demographic groups Customer dollar contribution, Total US Retail vs. Total Off-Price* 37%37%19%19%21%19%17%18%6%8% Total US Total Off-Price 18-2425-3435-4445-5455+Ethnicity*HH income*Age*Household Size*54%51%13%13%14%14%19%23% Total US Total Off-Price <$50k$50k-$75k$75k-$100k$100k+62%53%9%10%18%24%11%12% Total US Total Off-PriceHispanicOther16%16%19%19%20%20%34%33%12%13% Total US Total Off-Price SingleTwoThreeFourFive Or MoreWhiteNon-HispanicBlackNon-Hispanic
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Agenda•Company Overview•Off-Price Retail•Retail Market Share•Burlington Full Potential•Burlington 2.0 Strategy•Financial Performance•CSR Progress9
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Retail Market ShareThe retail industry has been undergoing a major restructuring for some time; this restructuring has seen a significant decline in the market share of department stores. The major beneficiaries of this restructuring have been pure-play internet retail formats, and the major off-price retailers.We believe the aftermath of the COVID-19 pandemic has led to an acceleration of this restructuring; it appears that the share loss from department stores, and from mall-based specialty retailers, is leading to further rationalization of full-price brick & mortar retail stores. This could spur further growth for e-commerce players and the major off-price retailers. 10
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$37 $40 $42 $46 $49 $38 $58 $58 $63 $66 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Off-Price Growth 11 Off-Price Retail Sales ($B) Source: Sales data Includes major off-price retailers, based on company filings. Off-Price retail has been taking market sharesince long before the pandemic, driven by the strong consumer need and desire for value
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Agenda•Company Overview•Off-Price Retail•Retail Market Share•Burlington Full Potential•Burlington 2.0 Strategy•Financial Performance•CSR Progress12
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Burlington Full PotentialBurlington has a strong track record of growthand profit improvement, but it remains the smallest, least productive, and least profitableof the major off-price retail chains. It still has significant opportunity to drive growth, improve profitability and achieve its off-price “Full Potential”.This opportunity is based on expansion within the United States, driving sales and store count in markets where the company is well-established and well-known; meanwhile the profit margin opportunity is based on improving execution of the company’s existing off-price business model.13
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Full Potential Benchmarks 14Source: Company filings.Adjusted EBIT is a non-GAAP measure. Please see the Appendix for the reconciliation to its most comparable GAAP measure.*Peer 1 does not present Adjusted EBIT margin1Estimated sales per Sq. Ft. (selling) excludes 53rd week.²Excludes approximately $18 million of expenses associated with the acquisition of Bed Bath & Beyond leases^Not meaningful. Pandemic era results. Based on off-price peer benchmarks, Burlington still has a lot of opportunity to drive performance and achieve its “Full Potential”²
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Agenda•Company Overview•Off-Price Retail•Retail Market Share•Burlington Full Potential•Burlington 2.0 Strategy•Financial Performance•CSR Progress15
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Burlington 2.0 “Full Potential” Strategy 16 1.Chase the Sales Trend•Hold and tightly control liquidity•Fuel the trend with opportunistic buys2.Operate with Leaner Inventories•Drive faster turns, lower markdowns•Flow fresh receipts to support sales trend3.Invest in Buying & Planning •Merchant and planning head count•Improved training, tools, and reporting4.More Operational Flexibility •Faster, more responsive Supply Chain•More flexible Store Staffing Model5.Smaller Store Prototype•More productive retail locations•Lower occupancy & operating expenses6.Challenge Expenses•All areas of the business
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Agenda•Company Overview•Off-Price Retail•Retail Market Share•Burlington Full Potential•Burlington 2.0 Strategy•Financial Performance•CSR Progress17
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$4,428 $4,815 $5,099 $5,566 $6,003 $6,643 $7,261 $5,752 $9,307 $8,685 $9,571 $10,617 2013 2014 2015 2016 2017¹ 2018 2019 2020 2021 2022 2023¹ ² 2024Financial Full Potential 18 Net Sales ($M) Adjusted EBITDA ($M)Adjusted EBITDA is a non-GAAP measure. Please see the Appendix for the reconciliation to its most comparable GAAP measure.*Not meaningful. Pandemic era results; 2020 Adjusted EBITDA was -$62.7M ^ Compared to FY2019¹ 52 weeks; Net Sales on a 53-week basis for FY2023 and FY2017 were $9,709 million and $6,085 million, respectively.² FY2024 and FY2023 adjusted EBITDA margin excludes $16 million and $18 million, respectively, of expenses associated with bankruptcy acquired leases. Burlington has a strong track record of growth and cash generation …but there is still significant upside to achieve “Full Potential” 11%10%-7%28%^*Covid Era9%11%8%9%6%9%Growth10%9%8%11%*Covid12% 12% 11% 11% 9% 9% 9% Margin23%28%-33%19%^Era11%15%18%21%8%17%Growth$384 $448 $484 $585 $696 $792 $880 $1,051 $701 $898 $1,109 2013 2014 2015 2016 2017¹ 2018 2019 2020 2021 2022 2023¹ ² 2024²
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Burlington 2.0 Financial Goals •Increases in Operating Margin driven by:1. Higher Comparable Store Sales GrowthoUsing Liquidity to Chase SalesoStrengthening Buying & Planning2. Higher Merchandise Margins oFaster Turns, Lower Markdowns3. Lower Supply Chain and Freight CostsoDC productivity initiatives4. Lower Occupancy & Operating Costs oSmaller Store Prototype•Faster Top-Line Sales Growth driven by:5. Expansion of New Store OpeningsoEnabled by Smaller Store Prototype19 Burlington 2.0 targets specific areas for performance improvement
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New Store Economics 20 Gross New Store Openings Optimized Footprint of New Stores Smaller Burlington 2.0 footprint stores unlock a larger whitespace opportunity Burlington 2.0 strategy drives superior unit economics – higher store productivity and increased operating margins Rigorous Underwriting HurdlesEach store to be 4-wall EBIT accretive to company EBIT in base year (Year 2)Each store to be accretive to company ROICOn average, new stores outperform hurdles28,00027,00027,00028,00031,00040,00042,00043,00045,00051,000Avg Sq. Ft The Growth of New Stores should also help drive Operating Margins 3048687662101113104147~1312016 2017 2018 2019 2020 2021 2022 2023 2024 2025E
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Strong Balance Sheet 21*2020 shown using 2019 Adjusted EBITDA for illustrative purposes; 2020 Adjusted EBITDA was -$62.7MAdjusted EBITDA is a non-GAAP measure. Please see the Appendix for the reconciliation to its most comparable GAAP measure. The company has astrong balance sheet to support its growth3.9x 3.4x 2.7x 2.7x 1.8x 1.4x 1.1x 0.7x 0.6x 0.4x0.9x0.5x0.7x2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 2023 2024 Net debt / Adjusted EBITDA
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Q4 2024 Performance Summary Results are on a 13-week basis.•Total sales increased by 10% versus Q4 2023. Comparable store sales increased 6%•Gross Margins increased 30bps. Freight expense improved by 20bps as a percentage of sales; merch margin improved by 10bps•Adjusted EBIT*was $364 million, an increase of 10 basis points as a percentage of sales versus Q4 2023•Adjusted earnings per share* of $4.13versus $3.69 in Q4 2023•Repurchased $61 million of common stock•$1,822 million in liquidity comprised of $995 million in unrestricted cash and $827 million in ABL availability22*Adjusted EBIT and Adjusted earnings per share are non-GAAP measures. Adjusted EBIT excludes $5 million and $6 million, respectively, of expenses associated with bankruptcy acquired leases in the fourth quarters of Fiscal 2024 and Fiscal 2023. Adjusted earnings per share excludes $4 million, net of tax, associated with bankruptcy acquired leases in both the fourth quarters of Fiscal 2024 and Fiscal 2023. Please see the Appendix for the reconciliation to the most comparable GAAP measure.
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Long Term Growth ModelNew store growth plan – expect to open:oApproximately 500 net new stores from 2024 through 2028oPotential to expand store base to 2,000 storesProject low double digit average annual sales growthover the next 5 years:oDriven by new store openings and comp stores sales growthoComp growth could vary year-to-year but average mid-single digitsWith these assumptions, we believe that over this period we can achieve:oApproximately 10% operating margin in 2028, ~400bps increase vs. 2023oSignificant growth of operating margin dollars and earnings per share23
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Agenda•Company Overview•Off-Price Retail•Retail Market Share•Burlington Full Potential•Burlington 2.0 Strategy•Financial Performance•CSR Progress24
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Burlington’s Corporate Social Responsibility Progress•2023 CSR Report released August 29th, 2024.•Tracking toward our 2030 goal of reducing Scope 1 and Scope 2 greenhouse gas emissions by 60% compared to baseline year of 2016 (on a normalized per square foot of operational space), achieving an incremental 5% reduction in 2023 to bring us to a cumulative total of 48%.•In 2023, we consumed over 45,380 MWh of electricity from renewable sources. This made our ratio of renewable energy to overall electricity consumption 9%, keeping us on track to meet our goal of 20% of electricity consumed to be provided by renewable energy sources by 2030.•With the help and generosity of our customers, we donated over $3.5 million to charitable organizations and contributed over $1.8 million to support the Burlington Stores Foundation.•After the success of our 2022 pilot program with Good360, we rolled out our store donation program nationwide. In 2023, we donated over $5.7 million worth of merchandise that could no longer be sold in our stores to vetted local non-profits in the communities where we operate.•In its third year, the Burlington Stores Foundation presented nearly $800,000 through grants and donations to non-profit organizations.•Burlington was certified as a Great Place to Work® for the 9thyear in a row, and named one of the Best Workplaces in Retail by FORTUNE® for the 8thyear in a row.•We established a new Leadership and Organizational Transformation team focused on building leadership capability and evolving talent management processes.•For additional information, please see the CSR section on our investor website at: burlingtoninvestors.com/corporate-social-responsibility25
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Appendix 26
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Executive Team 27 Michael O’SullivanChief Executive OfficerAt Burlington Since: 2019Prior experience:Jennifer VecchioGroup President and Chief Merchandising OfficerAt Burlington Since: 2015Prior experience: Kristin WolfeEVP Chief Financial OfficerAt Burlington Since: 2022Prior experience: Greg ShultzEVP Supply ChainAt Burlington Since: 2021Prior experience: Calvin ChungEVP Property DevelopmentAt Burlington Since: 2024Prior experience: Travis MarquettePresident and Chief Operating OfficerAt Burlington Since: 2021Prior experience: Connie DrogeEVP Stores and Asset ProtectionAt Burlington Since: 2023Prior experience:
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Adjusted Net Income and EBIT 28 Historical Adjusted EPS Reconciliation Historical Adjusted EBIT and EBITDA Reconciliation153 weeks² Excludes net favorable lease costs, all or a portion of which were included in depreciation and amortization prior to Fiscal 2021 ($ in millions) FY 16FY 171FY 18 FY 19 FY 20 FY 21 FY 22FY 231FY 24 Q4 23 Q4 24Net Income (loss) $215.9 $384.9 $414.7 $465.1 ($216.5) $408.8 $230.1 $339.6 $503.6 227.5$ 260.8$ Net Favorable Lease Costs 23.8 23.3 26.1 35.8 24.1 21.9 18.6 15.3 11.2 3.4 2.2 Non-cash interest expense on convertible notes - - - - 24.0 - - - - - - Costs Related to Debt Amendments & Offerings 1.3 2.3 2.5 (0.4) 3.6 3.4 - 0.1 4.6 - - Loss on Extinguishment of Debt 3.8 2.9 1.8 - 0.2 156.0 14.7 38.3 1.4 - - Impairment Charges 2.5 2.1 6.8 4.3 6.0 7.7 21.4 6.4 12.9 - 1.7 Stock Option Modification Expense 0.6 0.1 - - - - - - - - - Litigation Accrual 3.5 - - - 22.8 - 10.5 1.5 2.5 - - E-commerce closure - - - - 1.5 - - - - - - Tax Effect (19.1) (9.8) (9.4) (10.1) (35.3) (24.7) (14.5) (7.8) (8.3) 4.8 (0.9) Adjusted Net Income (loss) 232.3$ 405.8$ 442.5$ 494.7$ (169.5)$ 573.2$ 280.8$ 393.4$ 527.9$ 235.7$ 263.7$ Diluted Weighted Average Shares Outstanding 71.7 70.3 68.7 67.3 66.0 68.1 65.9 64.9 64.6 64.4 64.8 Adjusted Earnings per Share 3.24$ 5.77$ 6.44$ 7.35$ (2.57)$ 8.41$ 4.26$ 6.06$ 8.17$ 3.66$ 4.07$ ($ in millions) FY 16FY 171FY 18 FY 19 FY 20 FY 21 FY22FY 231FY 24 Q4 23 Q4 24Net Income (loss) 215.9$ 384.9$ 414.7$ 465.1$ (216.5)$ 408.8$ 230.1$ 339.6$ 503.6$ 227.5$ 260.8$ Interest Expense, Net 56.1 58.6 55.6 49.1 96.5 67.3 57.7 53.8 38.0 10.1 8.2Loss on Extinguishment of Debt 3.8 2.9 1.8 - 0.2 156.0 14.7 38.3 1.4 - - Income Tax Expense (benefit) 117.3 44.1 92.8 115.4 (221.1) 136.5 77.4 126.1 171.2 86.1 86.7 Net Favorable Lease Costs 23.8 23.3 26.1 35.8 24.1 21.9 18.6 15.3 11.2 3.4 2.2 Impairment Charges 2.5 2.1 6.8 4.3 6.0 7.7 21.4 6.4 12.9 - 1.7 Stock Option Modification Expense 0.6 0.1 - - - - - - - - - Litigation Accrual 3.5 - - - 22.8 - 10.5 1.5 2.5 - - Costs Related to Debt Amendments & Offerings 1.3 2.3 2.5 (0.4) 3.6 3.4 - 0.1 4.6 - - E-commerce closure - - - - 1.5 - - - - - - Adjusted EBIT (loss) 424.8$ 518.3$ 600.4$ 669.3$ (282.9)$ 801.7$ 430.3$ 581.0$ 745.4$ 327.1$ 359.5$ Depreciation and amortization²159.8 177.8 191.8 210.4 220.2 249.2 270.4 307.1 347.6 87.3 91.5 Adjusted EBITDA (loss) 584.6$ 696.1$ 792.2$ 879.7$ (62.7)$ 1,050.9$ 700.7$ 888.1$ 1,093.0$ 414.4$ 451.0$