Burlington Stores Q2 Earnings Beat on Profit but Stock Drops on Revenue Miss and Soft Q3 Outlook

Burlington Stores posted second-quarter fiscal 2026 adjusted earnings per share of $2.37, beating the $2.18 consensus estimate by 38% year over year, while net income of $184 million surpassed the $137 million estimate. Revenue of $3.0 billion rose 11% year over year but fell slightly short of the $3.02 billion estimate, and comparable store sales grew 2%, a deceleration from 5% in the prior year period. Gross margin expanded 250 basis points to 46.2%, and EBITDA of $324 million exceeded the $302 million estimate by 26%.

Shares fell roughly 3% to 7.6% on the day as investors focused on the revenue miss and a sharply disappointing Q3 outlook: Burlington guided third-quarter adjusted EPS to $1.60-$1.70 against a $2.03 consensus, with adjusted EBIT margin expected to contract 60-80 basis points. A key reason for the weak near-term profit forecast is the company's decision to reinvest all $55 million in tariff refunds it received back into lower prices for shoppers rather than booking a one-time earnings benefit. For the full year, Burlington raised guidance, projecting total sales growth of 10%-11% and adjusted EPS of $11.77-$11.97, with an adjusted EBIT margin improvement of 20-40 basis points and capital expenditures of approximately $875 million.

The chain operated 1,287 stores as of the quarter, up 13.1% year over year, with merchandise inventories rising 9% to $1.5 billion.