Burlington Stores, Inc. (NYSE:BURL) Q2 2023 Results Conference Call August 24, 2023 8:30 AM ET

Company Participants

David Glick - Group Senior Vice President, Investor Relations and Treasurer

Michael O'Sullivan - Chief Executive Officer

Kristin Wolfe - EVP and Chief Financial Officer

Conference Call Participants

Matthew Boss - JPMorgan

Irwin Boruchow - Wells Fargo

Lorraine Hutchinson - Bank of America

John Kernan - TD Cowen

Alex Straton - Morgan Stanley

Chuck Grom - Gordon Haskett

Adrienne Yih - Barclays

Operator

Thank you for holding. And welcome everyone to the Burlington Stores Fiscal 2023 Second Quarter Operating Results Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions]. I will now turn the call over to David Glick, Group Senior Vice President, Investor Relations and Treasurer. Mr. Glick, please go ahead.

David Glick

Thank you, operator, and good morning, everyone. We appreciate everyone's participation in today's conference call to discuss Burlington's fiscal 2023 second quarter operating results. Our presenters today are Michael O'Sullivan, our Chief Executive Officer; and Kristin Wolfe, our EVP and Chief Financial Officer. Before I turn the call over to Michael, I would like to inform listeners that this call may not be transcribed, recorded or broadcast without our expressed permission. A replay of the call will be available until August 31, 2023. We take no responsibility for inaccuracies that may appear in transcripts of this call by third parties. Our remarks on the Q&A that follows are copyrighted today by Burlington Stores. Remarks made on this call concerning future expectations, events, strategies, objectives, trends or projected financial results are subject to certain risks and uncertainties. Actual results may differ materially from those that are projected in such forward-looking statements. Such risks and uncertainties include those that are described in the company's 10-K for fiscal 2022 and in other filings with the SEC. All of which are expressly incorporated herein by reference. Please note that the financial results and expectations we discuss today are on a continuing operations basis. Reconciliations of the non-GAAP measures we discuss today to GAAP measures are included in today's press release. Now here's Michael.

Michael O'Sullivan

Thank you, David. Good morning, everyone, and thank you for joining us. I would like to cover three topics this morning. Firstly, I will discuss our second quarter results. Secondly, I will share our outlook for the rest of the year. And thirdly, I will talk about our new store opening program. Then I will hand the call over to Kristin to walk through the financial details. Okay, let's talk about our Q2 results. Comp store sales for the second quarter increased 4% versus our guidance of 2% to 4%. This represents a 3% comp store sales growth versus 2019 on a geometric GAAP basis. This was very similar to our trend in Q1 and it means that for the spring season as a whole, our comp store sales growth was 4% on a one year and 3% on a four year geometric stat basis. We are a little disappointed with these numbers. As we came into 2023, we guided to 3% to 5% comp growth. Year-to-date, on a four year basis, we are at the low end of this range. We had hoped to do better. As discussed previously, we believe the key external factor negatively influencing our underlying sales trend is the health of the low income shopper, our core customer. This demographic continues to be under significant economic pressure, Increases in the cost of living, which had a huge impact on this customer's discretionary spending last year have moderated but not but of course, these costs are still going up. Add to that, these lower income shoppers have been impacted by lower benefits and lower tax refunds in the first half of 2023.