Consumers still enjoy bargain hunting when it comes to buying clothing, home furnishing and beauty products, resulting in two consecutive quarters of growth for off-price retailer Burlington Stores (NYSE: BURL).
Shoppers remain under economic pressure as higher gasoline prices persist and as interest rates rise, but still find the product selection at Burlington appealing. The retailer, which has stores spread out across 47 states, reported comparable store sales, which are sales of locations open at least a year, increased 2% during the second quarter following a 5% increase last year.
Burlington reported total sales increased by 11%, following 10% growth last year, resulting in net income of $184 million.
The northeast and the Midwest were the top performing regions while the Southwest region trailed the chain, said CFO Kristin Wolfe during an earnings call.
Shoppers were drawn in by its products in beauty and accessories, which were the strongest performers while the home business has “started to outperform the chain as we build that business back,” she added.
Burlington’s home business is grabbing more market share now after it had been impacted by the cost of tariffs during the third and fourth quarters in 2025.
In July, the home business “outcomped the chain and that trend has continued into August,” CEO Michael O’Sullivan said during an earnings call.
Selling items in the home business will become a larger proportion of the retailer’s business later in the year.
“Right now we are seeing a lot of strength in categories like home furnishings, kitchen essentials and toys,” he added.
Management increased its 2026 earnings outlook. The total revenue is now estimated to increase by 10% to 11% while comparable store sales will rise by 3% to 4%.
Burlington estimates third quarter comparable store sales to increase by 1% to 3% and total sales to increase 9% to 11%. For the fourth quarter, management estimates comparable store sales to be up 1% to 3% and total sales to increase 7% to 9%.
Shares of the retailer rose only by 3.6% during the past year, but 6.4% during the past month.
Opening more stores annually
New stores are driving some of the growth in revenue, said O’Sullivan. The retailer has been on a streak recently, opening new stores to attain greater market share. Burlington opened 45 new stores during the quarter, bringing its total to 1,287 stores in the U.S.
Over the past 12 months, Burlington reported a 13% growth in store count over the period, said Wolfe. The company opened 178 gross new stores, but had a net of 149 new stores after closing some of them and moving locations for other ones.
“This is the highest level of new store growth in Burlington’s history for that time period,” she said. “With the strength of our pipeline, we were able to front-load 2026 new stores more into the spring season.”
The average size of the new stores is 27,000 gross square feet and are located in “highly productive strip centers,” Wolfe said. These stores are estimated to generate over $7 million in annual sales. For 2026, Burlington anticipates 135 gross store openings or 115 net new stores.
“We estimate a payback period of less than two years,” she said. “From an operational standpoint, we’re opening these stores on time and staffing them with experienced Burlington leadership teams.”
Burlington plans to continue its expansion plans in 2027 and 2028 and remains “confident in our ability to open at least 110 net new stores annually, and believe we’re well positioned to reach and likely exceed the 1,500 store target by the end of 2028,” Wolfe said.
Tariff refunds used to lower prices
Burlington received $55 million from the International Emergency Economic Powers Act during the second quarter for tariffs the retailer paid and plans to use the tax money to lower prices on its items, O’Sullivan said.
“By reinvesting the tariff refunds into lower prices, we should be able to sharpen those values further and to offer the customer an even better deal,” he added.
Burlington is “confident” that the company can achieve its targets for profit “without flowing these refunds to earnings,” O’Sullivan said.
The retailer will reinvest the funds throughout both the third and fourth quarters, resulting in a neutral impact on Burlington’s full year guidance, said Wolfe.
The company’s tariff exposure has been lower compared to its competitors because during the second half of 2025 executives made a strategic decision to “deliberately” pivot “from some of the more heavily tariff exposed categories, particularly in home,” she added.
While that decision impacted the amount of revenue generated, it lowered Burlington’s exposure to higher tariff costs and “ultimately contributed to the strong earnings performance we delivered last year,” Wolfe said.
Burlington’s stores that are located in lower median household income areas “continue to have comp growth above the chain average,” demonstrating “strong resilience,” O’Sullivan said.
Selling more home furnishings and beauty products and adding more stores in new regions will likely generate higher sales for Burlington.
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