Burlington Stores Q1 2025: Navigating Contradictions in Tariffs, Inventory, and Consumer Trends

Tariff impact and mitigation, inventory management and strategy, impact of weather on sales trends, consumer behavior and economic conditions, and ocean freight cost impact are the key contradictions discussed in Burlington Stores' latest 2025Q1 earnings call.



First-Quarter Performance and Guidance:
- Burlington Stores reported total sales growth of 6% on top of 11% growth last year, while comp sales remained flat.
- The company maintained its full-year comp sales and earnings guidance of flat to up 2%.
- The slow start of the quarter was attributed to unfavorable weather and slower tax refunds, but performance improved in March and April.

Impact of Tariffs and Supply Chain Disruptions:
- The company anticipates potential volatility in off-price supply and pressure on merchandise margins due to tariffs.
- The recent reduction in tariffs from 145% to 30% has created a rush in production, which could lead to shortages in some categories and excess supply in others.
- Burlington Stores is managing its business flexibly to navigate these disruptions and capitalize on opportunities.

Consumer Trends and Economic Conditions:
- The slowdown in comp growth from Q4 to Q1 was broad-based across different trade areas, with some slowdown observed in lower-income areas.
- There are concerns about a potential economic slowdown and increased inflation, which could impact consumer spending.
- The company is prepared to manage these external uncertainties by offering great value to customers and reacting to sales trends.

Store Expansion and New Store Pipeline:
- Burlington Stores plans to open 100 net new stores in 2025, with 25% opening in the first half and 75% in the second half of the year.
- The company acquired 46 leases from JOANN Fabrics, aiming to open these stores in the spring of 2026.
- The expansion is expected to continue, benefiting from potential consolidation in the bricks-and-mortar retail landscape.