Burlington Stores, Inc. (BURL) Business Profile

What it does

Burlington Stores is an off-price retailer: it buys branded merchandise from manufacturers and other suppliers and sells it at discounted prices in its stores. Its assortment includes women’s, men’s and children’s apparel, as well as shoes, accessories, beauty products, home goods, toys, gifts and coats. The company offers merchandise at up to 60% off other retailers’ prices.

Burlington opened its first store in Burlington, New Jersey in 1972. Michael O’Sullivan is its chief executive officer. The company’s core customer shops for themselves, their family and their home, seeking brands and value. Burlington aims to give shoppers a “treasure hunt” experience, with a frequently refreshed selection that encourages return visits.

Unlike a retailer that commits to most of its stock well before a season begins, Burlington seeks to buy a majority of its merchandise in-season. Its buyers can shift purchases among suppliers and product categories as sales trends change. Buyers assess merchandise on fashion, quality, brand and price.

The stores are the center of the business: over 99% of net sales come from Burlington Stores. The company uses its website to showcase merchandise values and encourage shoppers to visit stores. At the end of the second quarter of fiscal 2026, Burlington operated 1,287 stores.

How it makes money

Burlington earns revenue by selling merchandise to shoppers, primarily through its own stores. Its product range spans apparel, accessories and shoes, home products and other categories. Burlington aims to bring customers back with a changing assortment of current, branded merchandise rather than a fixed selection. It advertises through television, radio, digital and streaming audio, email and social media.

The company purchases less merchandise before a season and buys the balance in-season and opportunistically. This approach lets it respond to sales trends and move purchases between suppliers and categories. Burlington expects the resulting supplier terms to help offset rising merchandise costs. Its buyers use a scorecard covering fashion, quality, brand and price when selecting products.

In fiscal 2025, Burlington earned $610.2 million in net income; in the second quarter of fiscal 2026, total sales grew 11% and comparable-store sales increased 2%.

The company’s second-quarter profitability measures, excluding the benefit of tariff refunds, included a 44.3% gross margin rate and a 7% adjusted EBIT margin. Merchandise margin improved, partly offset by higher freight expenses. Product sourcing costs were $226 million in the second quarter, and the company attributed an improvement in those costs as a percentage of sales to supply-chain productivity and cost-saving initiatives.

Burlington generally realizes higher sales and net income in the second half of the year, which includes back-to-school and holiday shopping. Weather also affects demand: early cold weather can increase sales of cold-weather clothing, while early warm weather can support sales of warm-weather clothing.

Customers and how it sells

Burlington’s core customer is 25-49 years old and lives in midsize to large metropolitan areas. The company appeals to shoppers who are both value-oriented and brand-conscious and who shop for their families and homes as well as themselves.

Its store base spans 46 states, Washington D.C. and Puerto Rico. Burlington had 1,212 stores as of January 31, 2026, and 1,287 stores at the end of the second quarter of fiscal 2026. Over 99% of net sales come from its stores. Burlington.com showcases merchandise values and directs customers toward the in-store assortment.

Burlington says its stores in trade areas with lower median household income continued to have comparable-sales growth above the chain average in the second quarter of fiscal 2026. Stores in heavily Hispanic areas performed in line with the chain during that quarter. The company has also said that higher living costs have put pressure on moderate- and low-income households.

The assortment is refreshed frequently, and Burlington believes the changing selection encourages repeat visits. Its marketing uses broad-based media as well as channels that can deliver more targeted messages.

Suppliers and costs

Burlington buys merchandise directly from nationally recognized manufacturers and other suppliers. No brand accounted for more than 5% of net purchases in fiscal 2025, fiscal 2024 or fiscal 2023. The company has no long-term purchase commitments or arrangements with suppliers and believes it is not dependent on any one supplier.

Buyers are in the market each week and can move purchases among categories and suppliers. Burlington deliberately shifted away from some tariff-exposed categories, particularly home, in the second half of 2025; it says that decision reduced its exposure to higher tariff costs but pressured sales.

Six distribution centers shipped more than 99% of merchandise units to stores in fiscal 2025. Vendors drop-shipped the remaining units directly to stores. The company also operates supporting warehouses and uses third-party pool-point facilities. Its Savannah distribution center began operating in fiscal 2026, and its startup brought costs during the second quarter.

The cost structure includes merchandise, freight, product sourcing, store-related expenses and distribution. In the second quarter of fiscal 2026, freight expenses increased, partly offsetting merchandise-margin improvement. Burlington also reported lower store-related costs and savings from supply-chain productivity initiatives.

Competitive position

Burlington competes in fragmented U.S. apparel and home-furnishings markets. Its rivals include department stores, other off-price retailers, specialty stores, online retailers, discount stores, wholesale clubs and outlet stores. Traditional full-price chains with off-price concepts also compete for shoppers. No competitor is named in the supplied company evidence.

Competition turns on price, merchandise breadth, quality and style, the in-store experience, customer service, responsiveness to fashion trends, brand image and the ability to operate at scale. Full-price department stores and specialty shops can offer brand-name merchandise at markdowns that bring their prices close to Burlington’s.

Burlington’s buying model lets it purchase in-season and shift orders between suppliers and categories. It also uses a changing assortment to encourage visits. The company says its brand awareness is lower than that of other retailers and that shoppers who know the name often associate it with the Coat Factory.

Our reading: flexible sourcing and a broad supplier base provide a meaningful operating advantage, but they depend on Burlington continuing to find merchandise shoppers want at suitable prices. Our reading: the refreshed assortment can support repeat visits, though competing markdowns and lower brand awareness limit its protection. Burlington also expects competition to increase and says other retailers’ price investments could mute the sales effect of its own tariff-refund reinvestment.

Growth opportunities

Burlington’s expansion strategy centers on opening stores in existing and new markets. Its long-term target remains 2,000 stores, supported by a smaller store prototype. The company prioritizes 25,000 square foot stores in busy, convenient strip malls and is downsizing some existing locations to incorporate new designs and reduce occupancy costs. Finding suitable locations and negotiating acceptable leases are conditions for openings.

For fiscal 2026, Burlington expects 135 gross store openings or about 115 net new stores. It also believes it can open at least 110 net new stores annually and reach and likely exceed its 1,500 store target by the end of 2028. New stores are a major driver of sales growth, although the company estimates that new-store cannibalization was worth about 1.5 percentage points of comparable sales in the second quarter.

Burlington is investing in distribution capacity to support its store network. Its Savannah distribution center began operating in fiscal 2026, while a distribution center planned for Buckeye, Arizona is expected to be operational in fiscal 2028. The company is also working on assortment localization, store layouts and supply-chain efficiency.

In the second quarter of fiscal 2026, Burlington received approximately $55 million in tariff refunds. It plans to reinvest the refunds in the business in the second half to deliver lower prices and expects their direct impact on full-year earnings to be neutral.

Structural risks

• Consumer spending: Inflation, higher costs of essentials, unemployment and other economic pressures can reduce discretionary spending. Burlington says moderate- and low-income households are feeling stretched.
• Tariffs and supply disruption: Tariffs may raise merchandise costs and inflationary pressure. Political or labor instability, transport disruption, disasters and other events can delay shipments or disrupt supply.
• Expansion and leases: Burlington may be unable to sustain its growth plans or implement its long-range goals. Its growth strategy and profitability could be affected if it cannot optimize stores or maintain favorable lease terms.
• Competition and margins: Other retailers’ markdowns can bring their prices close to Burlington’s. Burlington says competitors’ price investments could mute the sales impact of its own tariff-refund reinvestment.
• Seasonality and weather: Burlington generally earns more sales and net income in the second half of the year. Store traffic and demand for seasonal clothing are affected by weather patterns.
• Debt service: Burlington’s ability to generate enough cash to meet its debt obligations depends on future performance and economic and business factors outside its control.

Bottom line

Our reading

Burlington is a store-based off-price retailer whose business depends on buying branded goods flexibly and turning a changing assortment into repeat visits. New stores and distribution investment offer paths to growth, but finding locations and managing costs remain important. Its exposure includes pressure on customers’ spending, tariffs, weather and competition from retailers that can also mark down branded merchandise.