BURL 10-K & 10-Q changes, risk factors and insider trading
Burlington Stores, Inc. · NYSE · Retail-Department Stores · CIK 1579298 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Removed heading “Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on the Company’s business and operations.”
Largest changes
Like most major corporations,see in full comparisonwe, our customerswe and ourthird-partythird‑partyservicesservice providers face anevolving,increasinglyincreasingcomplex threatlandscapelandscape,inwithwhichcybercriminalscybercriminals, among others, employ a complex array ofusing techniquesdesignedsuchto disrupt operations and/or access personal and other sensitive information, including, for example, the use of fraudulent oras stolenaccesscredentials, malware, ransomware, phishing, and denial ‑of ‑serviceandattacksothertotypesdisruptofoperationsattacks.or access sensitive information. Hardware, software or applications (including AI capabilities) we develop or obtain from third parties may contain defects in design or manufacture or other problems that are not presently known and could unexpectedly compromise information security. In addition, our employees,contractorscontractors, or third partieswith which we do business or to which we outsource business operationsmayattempt to circumvent our security measures in order to misappropriate such information, and may purposefullyintentionally or inadvertentlycausecircumventasecuritybreachcontrols,involvingwhichsuchcouldinformationresult in data breaches orbecome subject to variousothercyber-crimes.cybersecurity incidents. Further, ourcomputersystems andthe third-partythird‑party systemsof our vendors aremay alsosubjectexperiencetonon‑maliciousdamagedisruptions, such as power outages, telecommunications failures, software defects, orinterruptionhumanfrom a number of non-criminal causes, including power outages; computer and telecommunications failures; computer viruses; and design or usage errors by our employees or contractors.error. Moreover, the rapid evolution and increased adoption of artificial intelligence, machine learning, Software as a Service (SaaS), and cloud technologies may intensify our cybersecurityrisks.risks, especially as threat actors use AI to enhance attacks that are harder to detect and defend against.
“Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on the Company’s business and operations.”see in full comparison
“The imposition of significant tariffs on imports from certain countries by the U.S. have heightened uncertainty in the global trade environment. These tariffs, along with retaliatory measures by other countries, may increase inflationary pressure and raise the costs of our merchandise. Additionally, on February 20, 2026, the U.S. Supreme Court issued a ruling limiting the authority to impose tariffs under the International Emergency Economic Powers Act (“IEEPA”), creating uncertainty regarding the potential recovery of tariffs previously assessed under that statute. …”see in full comparison
“In addition, complying with ESG-related rules and regulations, including collecting, measuring and reporting related data, can be costly, difficult and time consuming. Significant expenditures and commitment of time by management, employees and outside advisors may be involved in developing, implementing and overseeing policies, practices and internal controls related to ESG risk and performance, and we may undertake additional costs to meet our reporting and compliance obligations related to ESG matters. …”see in full comparison
“In addition, complying with ESG-related rules and regulations, including collecting, measuring and reporting related data, can be costly, difficult and time consuming. Significant expenditures and commitment of time by management, employees and outside advisors may be involved in developing, implementing and overseeing policies, practices and internal controls related to ESG risk and performance, and we may undertake additional costs to meet our reporting and compliance obligations related to ESG matters. …”see in full comparison
Over the past few years, uncertainty has increased with respect to tax and trade policies, tariffs and government regulations affecting trade between the U.S. and other countries. Although we source the majority of our merchandise from third party vendors located in the U.S., the production of that merchandise occurs primarily overseas. As a result, wesee in full comparisoncontinuehavetobeenevaluateimpacted by theimpactvolatilityof currentlyin effective tariffs,asincludingwellnewastariffsanythatadditionalcommencedproposedintariffs,2025, retaliatory tariffs and other restrictions onourtradesupplythatchain,havecosts, salesresulted andprofitability.may result in the future. We can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful.
Full comparison: every changed paragraph (20)
Consumer spending levels and shopping behaviors are affected by various economic conditions, which can affect our business or the retail industry generally as a result. These factors include, among other things, prevailing global economic conditions, inflation (including the costs of basic necessities and other goods), levels of employment, salaries and wage rates, prevailing interest rates, housing and food costs, energy and fuel costs, commodities pricing, income tax rates and policies, immigration policies (including enforcement practices, particularly in regions with a relatively high concentration of Hispanic customers, which is an important demographic group within our customer base), consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns may be influenced by consumers’ disposable income, credit availability and debt levels. Slowdown in the U.S. economy, an uncertain global economic outlook, interest rate volatility, or a credit crisis could adversely affect consumer spending habits, resulting in lower net sales and profits than expected on a quarterly or annual basis. Consumer confidence is also affected by the domestic and international political situation and periods of social unrest. The occurrence of terrorist acts or other hostilities in or affecting the U.S. could lead to a decrease in spending by consumers. In addition, natural disasters, industrial accidents, acts of war or global international conflicts (such as the conflict in Ukraine or the conflict in the Middle East), and public health issues (such as pandemics or epidemics) have in the past and may in the future have the effect of disrupting supplies and raising prices globally which, in turn, may have adverse effects on the world and U.S. economies and lead to a downturn in consumer confidence and spending. Certain of these risks, such as risks arising from politicaleconomic volatility, may be enhanced in 2025 in light of the U.S. administration’s change in trade and tariff policies. General uncertainty regarding the future political and economic environment and potential adverse economic changes could reduce consumer confidence and could negatively affect our operating results. We cannot predict when macroeconomic uncertainty may arise, whether or when such circumstances may improve or worsen or what impact such circumstances could have on our business.
The imposition of significant tariffs on imports from certain countries by the U.S. have heightened uncertainty in the global trade environment. These tariffs, along with retaliatory measures by other countries, may increase inflationary pressure and raise the costs of our merchandise. Additionally, on February 20, 2026, the U.S. Supreme Court issued a ruling limiting the authority to impose tariffs under the International Emergency Economic Powers Act (“IEEPA”), creating uncertainty regarding the potential recovery of tariffs previously assessed under that statute. The availability, timing, and amount of any such refunds remain uncertain and depend on further legal, regulatory, and administrative actions. There remains substantial uncertainty regarding the impacts of the U.S. Supreme Court’s decision on the availability, timing, and amount of potential refunds, if any, as well as the scope and duration of any newly announced tariffs or retaliatory actions.
The retail sector is highly competitive, and retailers are constantly adjusting their business models, promotional activities and pricing strategies in response to changing conditions. We compete on the basis of a combination of factors, including, among others, price, breadth, quality and style of merchandise offered, in-store experience, level of customer service, ability to identify and respond to new and emerging fashion trends, brand image and scalability. We compete with a wide variety of retailers for customers, vendors, suitable store locations and personnel. Some of our competitors are larger than we are or have more experience than we do in selling certain product lines or through certain channels. Additionally, existing competitors may consolidate with other retailers, expand their merchandise offerings, expand their e-commerce capabilities, and/or add new sales channels, change their pricing strategies, or use technology more effectively than we do, including the use of artificial intelligence.intelligence (“AI”) or other emerging technologies. More generally, consumer e-commerce spending may continue to increase, as it has in recent years, while our business is exclusively in brick-and-mortar stores. If we fail to compete effectively, our sales and results of operations could be adversely affected.
In addition, complying with ESG-related rules and regulations, including collecting, measuring and reporting related data, can be costly, difficult and time consuming. Significant expenditures and commitment of time by management, employees and outside advisors may be involved in developing, implementing and overseeing policies, practices and internal controls related to ESG risk and performance, and we may undertake additional costs to meet our reporting and compliance obligations related to ESG matters. For example, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on companies doing business in California and may increase our costs of compliance as a result.
In addition, complying with ESG-related rules and regulations, including collecting, measuring and reporting related data, can be costly, difficult and time consuming. Significant expenditures and commitment of time by management, employees and outside advisors may be involved in developing, implementing and overseeing policies, practices and internal controls related to ESG risk and performance, and we may undertake additional costs to meet our reporting and compliance obligations related to ESG matters. For example, the State of California passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that would impose broad climate-related disclosure obligations on companies doing business in California and may increase our costs of compliance as a result; however, claimants have sought to permanently enjoin the two laws and there remains much uncertainty with respect to the final outcome of these and other climate-related laws.
Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on the Company’s business and operations.
Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on our business and operations, including Company sales and cash flow. Such public health crises, epidemics and pandemics have the potential to create significant volatility, uncertainty and worldwide economic disruption, resulting in an economic slowdown of potentially extended duration, as seen with the COVID-19 pandemic. Such public health crises, epidemics and pandemics, could adversely affect our business and financial results, they may also have the effect of heightening many of the other risks described throughout this Annual Report.
In addition, to the extent that our new store openings are in existing markets, we may experience reduced net sales volumes in existing stores in those markets. If we experience a decline in performance or lease paymentlandlord allowances from our lessors become unavailable, we may slow or discontinue store openings, relocations, refreshesdownsizes and/or remodels.
Many of our vendors produce merchandise overseas, and our business is exposed to the risk of foreign and domestic operations and international tax and tariff policies and trade relations.
fluctuation in our vendors’ local currency against the dollar, which may increase our cost of goods sold; and changes in import duties, tariffs, taxes, charges, quotas, loss of “most favored nation” trading status with the United States for a particular foreign country andcountry, trade restrictions (including the United States imposing antidumping or countervailing duty orders, safeguards, remedies or compensation and retaliation due to illegal foreign trade practices). and other barriers to trade.
Over the past few years, uncertainty has increased with respect to tax and trade policies, tariffs and government regulations affecting trade between the U.S. and other countries. Although we source the majority of our merchandise from third party vendors located in the U.S., the production of that merchandise occurs primarily overseas. As a result, we continuehave tobeen evaluateimpacted by the impactvolatility of currentlyin effective tariffs, asincluding wellnew astariffs anythat additionalcommenced proposedin tariffs,2025, retaliatory tariffs and other restrictions on ourtrade supplythat chain,have costs, salesresulted and profitability.may result in the future. We can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful.
In addition, other major developments in tax policy or trade relations, such as the disallowance of tax deductions for imported merchandise or the imposition of additional unilateral tariffs on imported products, could increase the cost of products purchased from suppliers in such countries or restrict the importation of products from such countries,countries. whichIt remains unclear how tax or trade policies, tariffs or trade relations may change in the future, and additional changes in turn could have a material adverse effect on our business, results of operations and liquidity.
We rely extensively on various information systems, including data centers, hardware, software and applications to manage many aspects of our business, including to process and record transactions in our stores, to enable effective communication systems, to plan and track inventory flow, to manage logistics and to generate performance and financial reports. In addition, some aspects of our business, like that of most retailers, involve the receipt, storage and transmission of customers’ personal information and consumer preferences, as well as confidential information about our employees, our vendors and our Company, some of which is entrusted to third-party service providers and vendors. We are dependent on the integrity, security and consistent operations of these systems and related back-up systems, software, tools (including encryption technology) and monitoring to maintain reliable operations, provide security and oversight for processing, transmission, storage and the protection of confidential information, and to recover from unexpected outages.
Like most major corporations, we, our customerswe and our third-partythird‑party servicesservice providers face an evolving,increasingly increasingcomplex threat landscapelandscape, inwith whichcybercriminals cybercriminals, among others, employ a complex array ofusing techniques designedsuch to disrupt operations and/or access personal and other sensitive information, including, for example, the use of fraudulent oras stolen access credentials, malware, ransomware, phishing, and denial ‑of ‑service andattacks otherto typesdisrupt ofoperations attacks.or access sensitive information. Hardware, software or applications (including AI capabilities) we develop or obtain from third parties may contain defects in design or manufacture or other problems that are not presently known and could unexpectedly compromise information security. In addition, our employees, contractorscontractors, or third parties with which we do business or to which we outsource business operations may attempt to circumvent our security measures in order to misappropriate such information, and may purposefullyintentionally or inadvertently causecircumvent asecurity breachcontrols, involvingwhich suchcould informationresult in data breaches or become subject to various other cyber-crimes.cybersecurity incidents. Further, our computer systems and the third-partythird‑party systems of our vendors aremay also subjectexperience tonon‑malicious damagedisruptions, such as power outages, telecommunications failures, software defects, or interruptionhuman from a number of non-criminal causes, including power outages; computer and telecommunications failures; computer viruses; and design or usage errors by our employees or contractors.error. Moreover, the rapid evolution and increased adoption of artificial intelligence, machine learning, Software as a Service (SaaS), and cloud technologies may intensify our cybersecurity risks.risks, especially as threat actors use AI to enhance attacks that are harder to detect and defend against.
lost revenues resulting from operational disruption or the unauthorized use of proprietary information or the failure to retain or attract customers following an attackincident;
We accept payments using a variety of methods, including cash, checks, credit and debit cards, buy now pay later, and gift cards, and we may offer new payment options over time. Acceptance of these payment methods subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers. These requirements may change over time or be reinterpreted, making compliance more difficult or costly.
As of FebruaryJanuary 1,31, 2025,2026, our obligations include (i) $1,238.9$1,719.4 million, inclusive of original issue discount, under our senior secured term loan facility (Term Loan Facility) and (ii) $156.2 million under our 2.25% Convertible Notes due April 15, 2025 (our “2025 Convertible Notes”) and $297.1 million under our 1.25% Convertible Notes due December 15, 2027 (our “2027 Convertible Notes” and, together with our 2025 Convertible Notes, our “Convertible Notes”). We had no outstanding balance on our $900.0$1,000.0 million asset-based lending facility (ABL Line of Credit) as of FebruaryJanuary 3,31, 2024.2026. Our debt obligations also include $25.0$22.9 million of finance lease obligations as of FebruaryJanuary 1,31, 2025.2026. Estimated cash required to make interest payments for these debt obligations, net of the impact of our interest rate swap, amounts to approximately $70.1$93.2 million in the aggregate for the fiscal year ending January 31,30, 2026.2027.
In the event the conditional conversion feature of our 2027 Convertible Notes is triggered, holders of our 2027 Convertible Notes will be entitled to convert their notes at any time during specified periods at their option. If one or more holders elect to convert their 2027 Convertible Notes, we would be required to settle the principal portion of our conversion obligation in cash, which could adversely affect our liquidity. In addition, even if holders of our 2027 Convertible Notes do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2027 Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. Our 2025 Convertible Notes are now convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of April 15, 2025.
Conversion of the 2027 Convertible Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their 2027 Convertible Notes, or may otherwise depress the price of our common stock.
The conversion of some or all of the 2027 Convertible Notes will dilute the ownership interests of existing stockholders, as we will deliver shares of our common stock with respect to any excess over principal upon conversion of any of the 2027 Convertible Notes. OurThe 2027 Convertible Notes may from time to time in the future be convertible at the option of their holders prior to their scheduled terms under certain circumstances and our 2025 Convertible Notes are now convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of April 15, 2025.circumstances. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the 2027 Convertible Notes may encourage short selling by market participants because the conversion of the 2027 Convertible Notes could be used to satisfy short positions, or anticipated conversion of the 2027 Convertible Notes into shares of our common stock could depress the price of our common stock.
Management's Discussion & Analysis (MD&A)
New heading “Cash Flows for Fiscal 2025 Compared with Fiscal 2024”
Removed heading “Driving Comparable Store Sales Growth.”
Removed heading “Expanding and Enhancing Our Retail Store Base.”
Removed heading “Enhancing Operating Margins.”
Removed heading “Cash Flows for Fiscal 2023 Compared with Fiscal 2022”
Largest changes
A broad, protracted slowdown or downturn in the U.S. economy, an extended period of high unemployment or inflation rates, an uncertain domestic or global economic outlook or a financial crisis could adversely affect consumer spending habits resulting in lower net sales and profits than expected on a quarterly or annual basis. Conversely, if inflationsee in full comparisoncontinues to decline,declines, it could benefit our core customers who have been impacted bythehigher cost ofliving since early 2022,living, and if economic growth slows, it could cause moderate and higher-income shoppers to become more value conscious. Either of these developments, if they occur, would be expected to improve our business. Consumer confidence is also affected by the domestic and international political situation. Our financial condition and operations could be impacted by changes in government regulations, initiatives or programs in areas including, but not limited to, trade and tariffs, taxes, healthcare, and immigration. In addition, trade and tariff regulationscouldhave had and are expected to continue to have an indirect impact on consumer prices. We will continue to monitor changes in tariff policy and the impact of these changes on our industry and the economy and seek to adjust to these changes as efficiently as possible. The outbreak or escalation of war, or the occurrence of terrorist acts or other hostilities in or affecting the U.S., or public health issues such as pandemics or epidemics, could lead to a decrease in spending by consumers. In addition, natural disasters, public health issues, industrial accidents and acts of war or conflicts in various parts of the world (such as the conflict in Ukraine or the conflict in the Middle East), could have the effect of disrupting supplies and raising prices globally which, in turn, may have adverse effects on the world and U.S. economies and lead to a downturn in consumer confidence and spending.
“Optimizing the Supply Chain. Our transportation initiatives have led to lower freight costs compared to recent levels, and we believe our efficiency and labor productivity initiatives will continue to result in lower supply chain costs over the next several years. We also believe there are longer-term supply chain opportunities through investments in automation and new purpose built processing buildings, and owning (rather than leasing) a larger portion of our warehouse network going forward.”see in full comparison
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We are a nationally recognized off-price retailer of high-quality, branded merchandise at everyday low prices. We opened our first store in Burlington, New Jersey in 1972, selling primarily coats and outerwear. Since then, we have expanded our store base to 1,1081,212 stores as of FebruaryJanuary 1,31, 20252026 in 46 states, Washington D.C. and Puerto Rico. We have diversified our product categories by offering an extensive selection of in-season, fashion-focused merchandise at up to 60% off other retailers’ prices, including: women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. We sell a broad selection of desirable, first-quality, current-brand, labeled merchandise acquired directly from nationally-recognized manufacturers and other suppliers.
During the fiscal year ended February 1, 2025 (Fiscal 20242025), we opened 147131 new stores, inclusive of 3118 relocations, and closed 15nine stores, exclusive of the aforementioned relocations, bringing our store count as of FebruaryJanuary 1,31, 20252026 to 1,1081,212 stores. We continue to pursue our growth plans and invest in capital projects that meet our financial requirements. During the fiscal year ending January 31,30, 20262027 (Fiscal 20252026), we plan to open approximately 100110 net new stores.
Our fiscal year ends on the Saturday closest to January 31. We report fiscal years under a 52/53-week format and as a result, certain fiscal years will contain 53 weeks. Fiscal 20242025 included 52 weeks, the fiscal year ended February 1, 2025 (Fiscal 2024) included 52 weeks, and the fiscal year ended February 3, 2024 (Fiscal 2023) included 53 weeks, and the fiscal year ended January 28, 2023 (Fiscal 2022) included 52 weeks. Fiscal 20252026 will have 52 weeks.
We continue to focus on several ongoing strategic initiatives aimed at operating with flexibility, responsiveness, and efficiency in everything we do, while delivering great value to our customers through continued improvement in the execution of our off-price model. These initiatives are outlined below.
Merchandising
Our merchandising strategy is centered on delivering compelling value while remaining responsive to evolving customer preferences. Key initiatives include:
focusing on fashion, quality, brand, and price to inform our buying decisions and provide customers with outstanding value on their purchases;
delivering remarkable value every day with speed and agility through a culture of customer focus and continuous learning and innovation;
enabling buyers to spend more time in the market and take data-driven actions informed by current trends and opportunities;
following the off-price principles of opportunistic buying and in-season purchasing to more effectively chase the sales trend;
building capabilities to localize the assortment by region and store; and continuing to grow our merchandising talent base.
Stores
We remain focused on delivering a neat, clean, easy-to-shop, organized, and consistent shopping experience for our customers while maintaining disciplined cost and inventory controls. Key initiatives include:
redesigning our stores with new interior layouts, signage and fixtures to better highlight our selection of trend-right, branded merchandise, and create an inviting environment for customers that accentuates the thrill of the treasure hunt;
optimizing shortage reduction by identifying risks and implementing innovative physical security solutions and technologies; and getting fresh receipts out to the sales floor rapidly and efficiently.
Real Estate
We continue to selectively expand our store footprint in attractive locations to support long-term growth. Key initiatives include:
opening 100 stores per year on average, which we believe will allow us to operate 2,000 stores over the long-term;
prioritizing 25,000 square foot stores located in busy, convenient strip malls; and downsizing existing stores to incorporate our new store designs and reduce occupancy costs.
Supply Chain
We continue to invest in supply chain capabilities to support growth and improve operational efficiency. Key initiatives include:
driving cost savings through speed, flexibility, and efficiency in distribution and transportation; and expanding and modernizing our supply chain network with flexible and efficient distribution centers purpose-built to execute our off-price business model.
Marketing
Our marketing efforts are focused on building a strong and renewed reputation with consumers. Key initiatives include:
communicating a strong value message to new and existing shoppers; and investing in advertising that drives traffic to our stores.
We continue to focus on a number of ongoing initiatives aimed at increasing our overall profitability. These initiatives include, but are not limited to:
Driving Comparable Store Sales Growth.
We strive to increase comparable store sales through the following initiatives:
More Effectively Chasing the Sales Trend. We plan sales using conservative comparable store sales growth, holding and controlling liquidity, closely analyzing the sales trend by business, and remaining ready to chase that trend. We believe that these actions will also allow us to take more advantage of great opportunistic buys.
Operating with Leaner Inventories. We are planning to carry less inventory in our stores going forward compared to historical levels, which we believe should result in the customer finding a higher mix of fresh receipts and great merchandise values. We believe that this should drive faster turns and lower markdowns, while simultaneously improving our customers’ shopping experience.
Investment in Merchandising Capabilities. We plan to continue investing in training and coaching, improved tools and reporting, incremental headcount, especially in growing or under-developed businesses, and other forms of merchant support. We believe that these investments should improve our ability to strengthen vendor relationships, source great merchandise buys, more accurately assess value, and better forecast and chase the sales trend.
Enhancing Existing Categories and Introducing New Categories. We have opportunities to expand our offerings in certain existing categories, such as ladies’ and junior apparel, beauty, and home merchandise, and maintain the flexibility to introduce new categories as we expand our merchandising capabilities.
Expanding and Enhancing Our Retail Store Base.
We intend to expand and enhance our retail store base through the following initiatives:
Adhering to a Market Focused and Financially Disciplined Real Estate Strategy. We have grown our store base consistently since our founding in 1972. We believe there is significant opportunity to expand our retail store base in the United States. As a result of our smaller store prototype, we have identified numerous market opportunities that we believe will allow us to operate 2,000 stores over the long term. We expect to average about 100 net new stores per year, for a total of 500 net new stores over the five-year period from Fiscal 2024 through Fiscal 2028.
Enhancing the Store Experience. We continue to invest in select store relocations and downsizes to improve the customer experience, taking into consideration the age, size, sales, and location of a store. Relocations provide an opportunity, upon lease expirations, to right-size our stores, improve our competitive positioning, incorporate our new prototype store designs and reduce occupancy costs. Downsizes provide an opportunity to right-size our stores, within our existing space, improve co-tenancy, incorporate our new store designs and reduce occupancy costs.
Enhancing Operating Margins.
We intend to increase our operating margins through the following initiatives:
Improving Operational Flexibility. Our store and supply chain teams must continue to respond to the sales chase, enhancing their ability at flexing up and down based on trends, and allowing us to maximize leverage on sales.
Optimizing Markdowns. We believe that our markdown system allows us to maximize sales and gross margin dollars based on forward-looking sales forecasts, sell-through targets and exit dates. Additionally, as we plan to carry less inventory in our stores compared to historical levels, we expect to drive faster turns, which should reduce the amount of markdowns taken compared to historical levels.
Optimizing the Supply Chain. Our transportation initiatives have led to lower freight costs compared to recent levels, and we believe our efficiency and labor productivity initiatives will continue to result in lower supply chain costs over the next several years. We also believe there are longer-term supply chain opportunities through investments in automation and new purpose built processing buildings, and owning (rather than leasing) a larger portion of our warehouse network going forward.
Challenging Expenses to Drive Operating Leverage. We believe sales growth will drive fixed cost operating leverage. In addition, by more conservatively planning our comparable store sales growth, we are forcing even tighter expense control throughout all areas of our business. We believe that this should put us in a strong position to drive favorable operating leverage on any sales ahead of the plan. Additionally, we plan to continue challenging the processes and operating norms throughout the organization with the belief that this will lead to incremental efficiency improvements and savings.
General Economic Conditions. There remains a high level of uncertainty in the current macroeconomic and geopolitical environments, and prolonged inflationary pressures could continue to negatively impact the discretionary spending of the low-income shopper, our core customer. In addition to inflation, consumer spending habits, including spending for the merchandise that we sell, are affected by, among other things, prevailing global economic conditions, the costs of basic necessities and other goods, levels of employment, salaries and wage rates, prevailing interest rates, reductions in government benefits and lower tax refunds, housing and food costs, energy and fuel costs, commodities pricing, income tax rates and policies, immigration policies, consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns are generally influenced by consumers’ disposable income, credit availability and debt levels.
A broad, protracted slowdown or downturn in the U.S. economy, an extended period of high unemployment or inflation rates, an uncertain domestic or global economic outlook or a financial crisis could adversely affect consumer spending habits resulting in lower net sales and profits than expected on a quarterly or annual basis. Conversely, if inflation continues to decline,declines, it could benefit our core customers who have been impacted by the higher cost of living since early 2022,living, and if economic growth slows, it could cause moderate and higher-income shoppers to become more value conscious. Either of these developments, if they occur, would be expected to improve our business. Consumer confidence is also affected by the domestic and international political situation. Our financial condition and operations could be impacted by changes in government regulations, initiatives or programs in areas including, but not limited to, trade and tariffs, taxes, healthcare, and immigration. In addition, trade and tariff regulations couldhave had and are expected to continue to have an indirect impact on consumer prices. We will continue to monitor changes in tariff policy and the impact of these changes on our industry and the economy and seek to adjust to these changes as efficiently as possible. The outbreak or escalation of war, or the occurrence of terrorist acts or other hostilities in or affecting the U.S., or public health issues such as pandemics or epidemics, could lead to a decrease in spending by consumers. In addition, natural disasters, public health issues, industrial accidents and acts of war or conflicts in various parts of the world (such as the conflict in Ukraine or the conflict in the Middle East), could have the effect of disrupting supplies and raising prices globally which, in turn, may have adverse effects on the world and U.S. economies and lead to a downturn in consumer confidence and spending.
Fiscal 2024 amount relates to the partial write-off of the original issue discount and deferred debt costs related to the September 2024 extension and upsize of the Term Loan Facility. PriorFiscal year2023 amountsamount relaterelates to the partial repurchases of the 2.25% Convertible Senior Notes due 2025 (the “2025 Convertible Notes in Fiscal 2023 and Fiscal 2022,”) and the exchange of a portion of the 2025 Convertible Notes in Fiscal 2023.Notes.
Fiscal 2025 amount relates to the settlement of the 2025 Convertible Notes during the first quarter of Fiscal 2025. Fiscal 2024 amount relates to the September 2024 extension and upsizing of the Term Loan Facility in the third quarter of Fiscal 2024.Facility. Fiscal 2023 amount relates to the Term Loan Facility amendment in the second quarter of Fiscal 2023 changing from the Adjusted LIBOR Rate to the Adjusted Term SOFR Rate.
Represents a one-time settlement of certain layaway liabilities on our Consolidated Balance Sheet, resulting in a gain.
(f)
Represents a one-time write-off to amortization related to certain merchandise security tags on our Consolidated Balance Sheet.
(g)
Tax effect is calculated based on the effective tax rates (before discrete items) for the respective periods, adjusted for the tax effect for the impact of items (a) through (df).
Adjusted EBIT and Adjusted EBITDA have limitations as analytical tools, and should not be considered either in isolation or as a substitute for net income or other data prepared in accordance with GAAP. Among other limitations, Adjusted EBIT doesand Adjusted EBITDA do not reflect:
losses on the extinguishmentextinguishments of debt;
Adjusted EBITDA is further adjusted for cash requirements for replacement of assets. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will likely have to be replaced in the future During Fiscal 2024, Adjusted EBIT improved $164.4 million to $745.4 million. During Fiscal 2024, Adjusted EBITDA improved $204.9 million to $1,093.0 million. These increases were primarily driven by higher sales and increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.future.
During Fiscal 2025, Adjusted EBIT improved $141.7 million to $887.1 million. During Fiscal 2025, Adjusted EBITDA increased $200.3 million to $1,293.3 million. These increases were primarily driven by higher sales and increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.
Fiscal 2024 amount relates to the partial write-off of the original issue discount and deferred debt costs related to the September 2024 extension and upsize of the Term Loan Facility. PriorFiscal year2023 amountsamount relaterelates to the partial repurchases of the 2025 Convertible Notes in Fiscal 2023 and Fiscal 2022, and the exchange of a portion of the 2025 Convertible Notes in Fiscal 2023.Notes.
Fiscal 2025 amount relates to the settlement of the 2025 Convertible Notes during the first quarter of Fiscal 2025. Fiscal 2024 amount relates to the September 2024 extension and upsizing of the Term Loan Facility in the third quarter of Fiscal 2024.Facility. Fiscal 2023 amount relates to the Term Loan Facility amendment in the second quarter of Fiscal 2023 changing from the Adjusted LIBOR Rate to the Adjusted Term SOFR Rate.
(e)
Represents a one-time settlement of certain layaway liabilities on our Consolidated Balance Sheet, resulting in a gain.
(f)
What changed in the latest 10-Q
Risk Factors
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of our Fiscal 2025 10-K.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Impairment charges – long-lived assets”
New heading “Six Month Period Ended August 1, 2026 Compared With the Six Month Period Ended August 2, 2025”
New heading “Impairment charges – long-lived assets”
Removed heading “Selling, general and administrative expenses”
Largest changes
“We earned net income of $299.0 million for the six month period ended August 1, 2026 compared with $195.0 million for the six month period ended August 2, 2025. This increase was primarily driven by higher sales, as well as increased gross margin rate. Net income included $41.3 million, net of income taxes, for the first half of Fiscal 2026 related to tariff refunds. Net income also included $8.8 million and $12.4 million, net of income taxes, for the first half of Fiscal 2026 and for the first half of Fiscal 2025, respectively, related to the bankruptcy acquired leases.”see in full comparison
“During the six month period ended August 1, 2026 and August 2, 2025, we incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $11.8 million and $16.6 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the six month period ended August 1, 2026 and August 2, 2025, respectively.”see in full comparison
“Six Month Period Ended August 1, 2026 Compared With the Six Month Period Ended August 2, 2025”see in full comparison
Full comparison: every changed paragraph (69)
We are a nationally recognized off-price retailer of high-quality, branded merchandise at everyday low prices. We opened our first store in Burlington, New Jersey in 1972, selling primarily coats and outerwear. Since then, we have expanded our store base to 1,2421,287 stores as of MayAugust 2,1, 2026 in 47 states, Washington D.C. and Puerto Rico. We have diversified our product categories by offering an extensive selection of in-season, high-quality branded merchandise at up to 60% off other retailers’ prices, including: fashion-focused women’s apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats.
Fiscal 2026 is defined as the 52-week year endedending January 30, 2027. Fiscal 2025 is defined as the 52-week year endingended January 31, 2026. The firstsecond quarters of Fiscal 2026 and Fiscal 2025 each consist of 13 weeks.
During the threesix month period ended MayAugust 2,1, 2026, we opened 4091 new stores, inclusive of six12 relocations, and permanently closed four stores, exclusive of the aforementioned relocations, bringing our store count as of MayAugust 2,1, 2026 to 1,2421,287 stores.
prioritizing 25,000 square foot stores located in busy, convenient strip malls; and downsizing and relocating select existing stores to incorporate our new store designs and reduce occupancy costs.
On February 20, 2026, the U.S. Supreme Court issued a ruling limiting the authority to impose tariffs under the International Emergency Economic Powers Act (“IEEPA”), creating uncertainty regarding the potential recovery of tariffs previously assessed under that statute. In April, US Customs launched a system to allow importers of record to file IEEPA tariff refunds. We have filed claims to seek recovery of such tariffs; however, the availability, timing, and amount of any refunds remain uncertain and depend on further legal, regulatory, and administrative actions.
Net income. We earned net income of $114.7$184.3 million during the three month period ended MayAugust 2,1, 2026 compared with net income of $100.8$94.2 million during the three month period ended MayAugust 3,2, 2025. ThisWe increaseearned wasnet income of $299.0 million during the six month period ended August 1, 2026 compared with a net income of $195.0 million during the six month period ended August 2, 2025. These increases were primarily driven by higher sales, as well as increased gross margin rate.rate, including a $55.5 million benefit from tariff refunds. Refer to the section below entitled “Results of Operations” for further explanation.
During the three and six months ended MayAugust 2,1, 2026, Adjusted Net Income increased $26.3$87.5 million to $128.9$189.3 million and increased $113.8 million to $318.2 million, respectively, compared to the same period in the prior year. These increases were primarily driven by higher sales, as well as increased gross margin rate.rate, including a $55.5 million benefit from tariff refunds. Refer to the section below entitled “Results of Operations” for further explanation.
The following table shows our reconciliation of net income to Adjusted Net Income for the three and six months ended MayAugust 2,1, 2026 compared with the three and six months ended MayAugust 3,2, 2025:
During the three and six months ended MayAugust 2,1, 2026, Adjusted EBIT increased $25.4$110.4 million to $171.7$261.3 million and increased $135.7 million to $432.9 million, respectively, compared to the same periodperiods in the prior year. During the three and six months ended MayAugust 2,1, 2026, Adjusted EBITDA increased $38.2$129.6 million to $276.3$375.3 million and increased $167.8 million to $651.6 million, respectively, compared to the same periodperiods in the prior year. These increases were primarily driven by higher sales, as well as increased gross margin rate.rate, including a $55.5 million benefit of tariff refunds. Refer to the section below entitled “Results of Operations” for further explanation.
The following table shows our reconciliation of net income to Adjusted EBIT and Adjusted EBITDA for the three and six months ended MayAugust 2,1, 2026 compared with the three and six months ended MayAugust 3,2, 2025:
Gross margin as a percentage of net sales increased to 44.1%46.2% during the three month period ended MayAugust 1, 2026, compared with 43.7% during the three month period ended August 2, 2025. Gross margin as a percentage of net sales increased to 45.1% during the six month period ended August 1, 2026, compared with 43.8% during the threesix month period ended MayAugust 3,2, 2025. This improvement was primarily driven primarilyby by$55.5 million of tariff refunds as well as improved merchandise margin and freight costs.margin.
Product sourcing costs, which are included in selling, general and administrative expenses, improved 20 and 30 basis points as a percentage of net sales during the three and six month periodperiods ended MayAugust 2,1, 2026 compared with the three and six month periodperiods ended MayAugust 3,2, 2025.2025, respectively. These improvements were primarily driven by supply chain efficiency initiatives.
Inventory. Inventory atas Mayof 2,August 1, 2026 increased to $1,444.2$1,541.3 million compared with $1,315.3$1,414.8 million atas Mayof 3,August 2, 2025. The increase was attributable primarily to an 11% increase in comparable store inventory and new store inventory at 127149 net new stores opened since the end of the firstsecond quarter of Fiscal 2025, partially offset by a slight decrease in reserve inventory.
Reserve inventory includes all inventory that is being stored for release either later in the season, or in a subsequent season. We intend to use our reserve merchandise to effectively chase sales trends. Reserve inventory was 41%43% of total inventory at the end of the firstsecond quarter of Fiscal 2026 compared to 48%50% at the end of the firstsecond quarter of Fiscal 2025.
Liquidity. Liquidity measures our ability to generate cash. Management measures liquidity through cash flow, which is the measure of cash generated from or used in operating, financing, and investing activities. Cash and cash equivalents decreased $485.2$528.8 million during the threesix months ended MayAugust 2,1, 2026, compared with a decrease of $623.6$247.1 million during the threesix months ended MayAugust 3,2, 2025. Refer to the section below entitled “Liquidity and Capital Resources” for further explanation.
The following table sets forth certain items in the Condensed Consolidated Statements of Income as a percentage of net sales for the three and six months ended MayAugust 2,1, 2026 and the three and six months ended MayAugust 3,2, 2025.
Three Month Period Ended MayAugust 2,1, 2026 Compared With the Three Month Period Ended MayAugust 3,2, 2025
Net sales
Net sales improved $352.2$296.8 million, or 14.1%,11.0%, to $2,852.3$2,997.8 million during the firstsecond quarter of Fiscal 2026, primarily driven by both an increase in net sales of $196.9$254.8 million from our 127149 net new stores opened since the end of the firstsecond quarter of Fiscal 2025 and non-comparable stores, as well as an increase of 6%,2%, or $155.3$42.0 million, in comparable stores sales during the threesix month period ended MayAugust 2,1, 2026.
Cost of sales as a percentage of net sales decreased to 55.9%53.8% during the firstsecond quarter of Fiscal 2026, compared to 56.2%56.3% during the firstsecond quarter of Fiscal 2025. This improvement was driven primarily by $55.5 million of tariff refunds as well as improved merchandise margin and freight costs.margin. On a dollar basis, cost of sales increased $189.7$94.4 million, or 13.5%,6.2%, primarily driven by our overall increase in sales.sales, partially offset by tariff refunds.
Selling, general and administrative expenses
Selling, general and administrative expenses as a percentage of net sales remaineddecreased atto 34.7%34.0% during the firstsecond quarter of Fiscal 2026, compared to the same percentage of net sales35.2% during the firstsecond quarter of Fiscal 2025. DuringThe thedecrease firstwas quarterprimarily ofdriven 2026,by improvements in occupancyoccupancy, selling supplies, legal reserve, and product sourcing costs were offset by increases in incentive compensation and marketing.costs.
On a dollar basis, selling, general and administrative expenses increased by $121.3$69.2 million, or 14.0%,7.3%, to $989.4$1,019.2 million during the firstsecond quarter of Fiscal 2026. The increase was primarily driven by our 127149 net new stores opened since the end of the firstsecond quarter of Fiscal 2025, as well as an increase in incentive compensation.2025.
During the firstsecond quarter of Fiscal 2026, the Companywe incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $7.4$4.4 million and $5.8$10.8 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the firstsecond quarter of Fiscal 2026 and the firstsecond quarter of Fiscal 2025, respectively.
Depreciation and amortization expense amounted to $104.6$114.0 million during the firstsecond quarter of Fiscal 2026 compared with $91.8$94.8 million during the firstsecond quarter of Fiscal 2025. The increase in depreciation and amortization expense was primarily driven by new and non-comparable stores.stores, as well as capital expenditures related to investments in our supply chain infrastructure.
Impairment charges – long-lived assets
Impairment charges on long-lived assets were $3.6 million during the second quarter of Fiscal 2026, related to unrecoverable store assets at underperforming stores and impairment of assets held-for-sale. Impairment charges on long-lived assets were $1.6 million during the second quarter of Fiscal 2025, related to unrecoverable store assets.
The recoverability assessment related to these store-level assets requires various judgments and estimates, including estimates related to future revenues, gross margin rates, store expenses and other assumptions. We base these estimates upon our past and expected future performance. We believe our estimates are appropriate in light of current market conditions. However, future impairment charges could be required if we do not achieve our current revenue or cash flow projections for each store. Refer to Note 6, “Fair Value Measurements,” for further discussion regarding impairment charges.
Cost related to debt amendments and inducement charges amounted to $15.3 million during the first quarter of Fiscal 2026 compared with $0.1 million during the first quarter of Fiscal 2025. The increase is driven by an inducement charge related to the partial settlement of our 2027 Convertible Notes during the first quarter of Fiscal 2026. Refer to Note 4, “Long Term Debt,” for further discussion regarding this transaction.
Interest expense increased $0.7$2.2 million during the firstsecond quarter of Fiscal 2026 to $16.5$19.7 million, compared to the same period in the prior year.year, Anwhich was driven by an increase relatedin tonet the upsize of the Term Loan Facility was partially offset by increased capitalized interest as a result of the ongoing construction of a distribution center and exchange of certain of convertible notes.borrowings.
Income tax expense was $27.9$57.8 million during the firstsecond quarter of Fiscal 2026 compared with income tax expense of $32.0$33.1 million during the firstsecond quarter of Fiscal 2025. The effective tax rate for the firstsecond quarter of Fiscal 2026 was 19.6%23.9% compared with 24.1%26.0% during the firstsecond quarter of Fiscal 2025. The decreaseincrease in income tax expense andis thedue to higher pre-tax income. The lower effective tax rate wasis primarily attributabledriven toby the purchase of federal energy tax benefit from stock-based compensation.credits.
At the end of each interim period we are required to determine the best estimate of our annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. Use of this methodology during the firstsecond quarter of Fiscal 2026 resulted in an annual effective income tax rate of approximately 27% (before discrete items) as our best estimate.
We earned net income of $114.7$184.3 million for the firstsecond quarter of Fiscal 2026 compared with $100.8$94.2 million for the firstsecond quarter of Fiscal 2025. This increase was primarily driven by higher sales, as well as increased gross margin rate. Net income included $5.5 million and $4.3$41.3 million, net of income taxes, for the firstsecond quarter of Fiscal 2026 related to tariff refunds. Net income also included $3.3 million and $8.1 million, net of income taxes, for the second quarter of Fiscal 2026 and for the firstsecond quarter of Fiscal 2025, respectively, related to the bankruptcy acquired leases.
Six Month Period Ended August 1, 2026 Compared With the Six Month Period Ended August 2, 2025
Net sales improved $649.0 million, or 12.5%, to $5,850.1 million during the six month period ended August 1, 2026, primarily driven by both an increase in net sales of $451.7 million from our 149 net new stores opened since the end of the second quarter of Fiscal 2025, as well as an increase of 4%, or $197.3 million, in comparable stores sales during the six month period ended August 1, 2026.
Cost of sales as a percentage of net sales decreased to 54.9% during the six month period ended August 1, 2026, compared to 56.2% during the six month period ended August 2, 2025. This improvement was driven primarily by $55.5 million of tariff refunds as well as improved merchandise margin. On a dollar basis, cost of sales increased $284.1 million, or 9.7%, primarily driven by our overall increase in sales.
Selling, general and administrative expenses as a percentage of net sales decreased to 34.3% during the six month period ended August 1, 2026, compared to 35.0% during the six month period ended August 2, 2025. The decrease was primarily driven by an improvement in occupancy costs and product sourcing costs, partially offset by an increase in incentive compensation. On a dollar basis, selling, general and administrative expenses increased by $190.6 million, or 10.5%, to $2,008.5 million during the six month period ended August 1, 2026. The increase was primarily driven by our 149 net new stores opened since the end of the second quarter of Fiscal 2025.
During the six month period ended August 1, 2026 and August 2, 2025, we incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $11.8 million and $16.6 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the six month period ended August 1, 2026 and August 2, 2025, respectively.
Depreciation and amortization expense amounted to $218.6 million during the six month period ended August 1, 2026 compared with $186.6 million during the six month period ended August 2, 2025. The increase in depreciation and amortization expense was primarily driven by new and non-comparable stores.
Impairment charges – long-lived assets
Impairment charges on long-lived assets were $4.4 million during the six month period ended August 1, 2026, related to unrecoverable store assets at underperforming stores and impairment of assets held-for-sale. Impairment charges on long-lived assets were $2.1 million during the six month period ended August 2, 2025, related to unrecoverable store assets.
The recoverability assessment related to these store-level assets requires various judgments and estimates, including estimates related to future revenues, gross margin rates, store expenses and other assumptions. We base these estimates upon our past and expected future performance. We believe our estimates are appropriate in light of current market conditions. However, future impairment charges could be required if we do not achieve our current revenue or cash flow projections for each store. Refer to Note 6, “Fair Value Measurements,” for further discussion regarding impairment charges.
Interest expense increased $2.9 million during the six month period ended August 1, 2026 to $36.2 million, compared to the same period in the prior year, which was driven by an increase in net borrowings.
Income tax expense was $85.7 million during the six month period ended August 1, 2026 compared with income tax expense of $65.2 million during the six month period ended August 2, 2025. The effective tax rate for the six month period ended August 1, 2026 was 22.3% compared with 25.0% during the six month period ended August 2, 2025. The increase in income tax expense is due to higher pre-tax income. The lower effective tax rate is mainly driven by the tax benefit from stock-based compensation and purchase of federal energy tax credits.
At the end of each interim period we are required to determine the best estimate of our annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. Use of this methodology during the six month period ended August 1, 2026 resulted in an annual effective income tax rate of approximately 27% (before discrete items) as our best estimate.
We earned net income of $299.0 million for the six month period ended August 1, 2026 compared with $195.0 million for the six month period ended August 2, 2025. This increase was primarily driven by higher sales, as well as increased gross margin rate. Net income included $41.3 million, net of income taxes, for the first half of Fiscal 2026 related to tariff refunds. Net income also included $8.8 million and $12.4 million, net of income taxes, for the first half of Fiscal 2026 and for the first half of Fiscal 2025, respectively, related to the bankruptcy acquired leases.
Cash Flow for the ThreeSix Month Period Ended MayAugust 2,1, 2026 Compared With the ThreeSix Month Period Ended MayAugust 3,2, 2025
We used $485.2$528.8 million of cash during the threesix month period ended MayAugust 2,1, 2026 compared with a use of $623.6$247.1 million during the threesix month period ended MayAugust 3,2, 2025.
Net cash provided by operating activities amounted to $61.5$334.6 million during the threesix month period ended MayAugust 2,1, 2026, compared with net cash used in operating activities of $28.9$150.5 million during the threesix month period ended MayAugust 3,2, 2025. The increase in our operating cash flows was primarily driven by improved sales and gross margin, including a $55.5 million benefit of tariff refunds, partially offset by the impact of changes in working capital.
Net cash used in investing activities was $289.7$537.7 million during the threesix month period ended MayAugust 2,1, 2026 compared with $412.7$581.4 million during the threesix month period ended MayAugust 3,2, 2025. This change was primarily the result of the timing of spend related to investments in our supply chain infrastructure.
Net cash used in financing activities was $325.7 million during the six month period ended August 1, 2026 compared with net cash provided by financing activities wasof $257.0$183.8 million during the threesix month period ended MayAugust 2, 2026 compared with $182.0 million during the three month period ended May 3, 2025. This change was primarily driven by borrowings on the ABLterm Lineloan of Creditupsize during the firstsecond quarter of Fiscal 2025, compared to no borrowings during the first quarter of Fiscal 2026.2025.
Changes in working capital also impact our cash flows. Working capital equals current assets minus current liabilities. We had working capital at MayAugust 2,1, 2026 of $352.7$380.3 million compared with $115.3$480.3 million at MayAugust 3,2, 2025. The increasedecrease in working capital was primarily due to increased cashaccounts balance.payable, decreased prepaid assets, increased current operating lease liabilities, and decreased cash, partially offset by increased inventory. We had working capital at January 31, 2026 of $522.3 million.
For the threesix month period ended MayAugust 2,1, 2026, capital expenditures, net of $20.1$28.3 million of landlord allowances, amounted to $193.6$426.7 million (inclusive of accrued capital expenditures).
We are in the process of selecting a site for relocation of our corporate headquarters. The timing and amount of expenditures related to this relocation are still uncertain. Thus, the above estimated capital expenditures exclude any potential costs related to the relocation that could be incurred during Fiscal 2026.
During the threesix month period ended MayAugust 2,1, 2026, we repurchased 257,906528,185 shares of common stock for $80.8$167.4 million under these repurchase programs. As of MayAugust 2,1, 2026, we had $304.2$217.6 million remaining under our share repurchase authorization.
During the threesix month period ended MayAugust 2,1, 2026, we opened 4091 new stores, inclusive of six12 relocations, and closed four stores, exclusive of the aforementioned relocations, bringing our store count as of MayAugust 2,1, 2026 to 1,2421,287 stores.
As of MayAugust 2,1, 2026, our obligations, inclusive of original issue discount, include $1,715.5$1,711.7 million under our Term Loan Facility, $186.1 million of our 2027 Convertible Notes and no outstanding borrowings on our ABL Line of Credit. Our debt obligations also include $22.1$21.8 million of finance lease obligations as of MayAugust 2,1, 2026.
BCFWC and certain of its subsidiaries and holding companies are party to a Credit Agreement (as amended, supplemented and otherwise modified, the Term Loan Facility) that provides for term loans in an aggregate principal amount as of MayAugust 2,1, 2026 of $1,726.2$1,721.8 million maturing on September 24, 2031.
At MayAugust 1, 2026 and August 2, 2026,2025, ourthe borrowinginterest rate related to the Term Loan Facility was 5.4%.5.5% and 6.1%, respectively.
AtOn MayAugust 2, 2026,2025, we had $942.1$945.7 million available under the ABL Line of Credit. There were noAverage borrowings under the ABL Line of Credit during the three monthand periodsix months ended MayAugust 2, 2026.2025 amounted to $57.1 million and $40.4 million, respectively, at an average interest rate of 5.5% for both periods.
BURL insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 10 filings (5 insiders, 10 trade dates, 43,032 shares, about $14.3M; 6 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -43,032 (purchases minus sales); net value about -$14.3M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-01 | Vecchio Jennifer |
Open-market sale |
101 | $268.52 | $27.1K |
| 2026-10-01 | Vecchio Jennifer |
Open-market sale |
262 | $270.04 | $70.8K |
| 2026-10-01 | Vecchio Jennifer |
Open-market sale |
591 | $271.32 | $160.4K |
| 2026-10-01 | Vecchio Jennifer |
Open-market sale |
380 | $272.17 | $103.4K |
| 2026-10-01 | Vecchio Jennifer |
Open-market sale |
344 | $273.22 | $94.0K |
| 2026-09-01 | Vecchio Jennifer |
Open-market sale |
118 | $264.20 | $31.2K |
| 2026-09-01 | Vecchio Jennifer |
Open-market sale |
186 | $262.09 | $48.7K |
| 2026-09-01 | Vecchio Jennifer |
Open-market sale |
136 | $260.76 | $35.5K |
| 2026-09-01 | Vecchio Jennifer |
Open-market sale |
117 | $258.57 | $30.3K |
| 2026-09-01 | Vecchio Jennifer |
Open-market sale |
162 | $257.16 | $41.7K |
| 2026-09-01 | Vecchio Jennifer |
Open-market sale |
307 | $255.94 | $78.6K |
| 2026-09-01 | Vecchio Jennifer |
Open-market sale |
212 | $254.54 | $54.0K |
| 2026-09-01 | Vecchio Jennifer |
Open-market sale |
440 | $263.62 | $116.0K |
| 2026-08-03 | Vecchio Jennifer |
Open-market sale |
161 | $372.79 | $60.0K |
| 2026-08-03 | Vecchio Jennifer |
Open-market sale |
847 | $368.44 | $312.1K |
| 2026-08-03 | Vecchio Jennifer |
Open-market sale |
145 | $369.26 | $53.5K |
| 2026-08-03 | Vecchio Jennifer |
Open-market sale |
147 | $371.58 | $54.6K |
| 2026-08-03 | Vecchio Jennifer |
Open-market sale |
378 | $367.72 | $139.0K |
| 2026-08-03 | Wolfe Kristin |
Shares withheld for tax | 216 | $368.23 | $79.5K |
| 2026-07-01 | Vecchio Jennifer |
Open-market sale |
91 | $311.91 | $28.4K |
| 2026-07-01 | Vecchio Jennifer |
Open-market sale |
281 | $313.08 | $88.0K |
| 2026-07-01 | Vecchio Jennifer |
Open-market sale |
443 | $315.64 | $139.8K |
| 2026-07-01 | Vecchio Jennifer |
Open-market sale |
84 | $310.10 | $26.0K |
| 2026-07-01 | Vecchio Jennifer |
Open-market sale |
520 | $316.51 | $164.6K |
| 2026-07-01 | Vecchio Jennifer |
Open-market sale |
49 | $319.02 | $15.6K |
| 2026-07-01 | Vecchio Jennifer |
Open-market sale |
210 | $318.23 | $66.8K |
| 2026-06-22 | Mcnamara William P |
Gift | 6,048 | — | — |
| 2026-06-17 | Wolfe Kristin |
Open-market sale | 3,210 | $341.10 | $1.1M |
| 2026-06-17 | Wolfe Kristin |
Open-market sale | 2,930 | $339.10 | $993.6K |
| 2026-06-17 | Wolfe Kristin |
Option exercise | 1,500 | $150.17 | $225.3K |
| 2026-06-17 | Wolfe Kristin |
Option exercise | 3,768 | $150.17 | $565.8K |
| 2026-06-17 | Wolfe Kristin |
Open-market sale | 2,060 | $340.34 | $701.1K |
| 2026-06-12 | Vecchio Jennifer |
Open-market sale | 229 | $343.10 | $78.6K |
| 2026-06-12 | Vecchio Jennifer |
Open-market sale | 10,787 | $341.57 | $3.7M |
| 2026-06-12 | Vecchio Jennifer |
Open-market sale | 2,740 | $340.48 | $932.9K |
| 2026-06-12 | Vecchio Jennifer |
Open-market sale | 1,317 | $339.13 | $446.6K |
| 2026-06-12 | Vecchio Jennifer |
Option exercise | 10,386 | $179.46 | $1.9M |
| 2026-06-12 | Vecchio Jennifer |
Option exercise | 10,534 | $170.08 | $1.8M |
| 2026-06-12 | Vecchio Jennifer |
Open-market sale | 5,847 | $342.43 | $2.0M |
| 2026-06-11 | Ferroni Stephen |
Option exercise | 1,032 | $135.37 | $139.7K |
| 2026-06-11 | Ferroni Stephen |
Open-market sale | 1,311 | $337.31 | $442.2K |
| 2026-06-11 | Ferroni Stephen |
Open-market sale | 1,032 | $337.11 | $347.9K |
| 2026-06-05 | Pasch Matthew |
Open-market sale | 3,773 | $317.21 | $1.2M |
| 2026-05-20 | Mahoney John |
Grant/award | 596 | — | — |
| 2026-05-20 | Sen Laura |
Grant/award | 596 | — | — |
| 2026-05-20 | Sullivan Paul |
Grant/award | 596 | — | — |
| 2026-05-20 | Goodwin Michael |
Grant/award | 596 | — | — |
| 2026-05-20 | Mcnamara William P |
Grant/award | 596 | — | — |
| 2026-05-20 | Goodman Shira |
Grant/award | 596 | — | — |
| 2026-05-20 | Hitch Jordan |
Grant/award | 596 | — | — |
| 2026-05-20 | Rodriguez Jessica |
Grant/award | 596 | — | — |
| 2026-05-20 | English Edmond J |
Grant/award | 596 | — | — |
| 2026-05-20 | Skirvin Michael C |
Grant/award | 596 | — | — |
| 2026-05-05 | Marquette Travis |
Open-market sale |
163 | $313.62 | $51.1K |
| 2026-05-05 | Marquette Travis |
Open-market sale |
18 | $315.42 | $5.7K |
| 2026-05-05 | Marquette Travis |
Open-market sale |
9 | $311.33 | $2.8K |
| 2026-05-04 | Vecchio Jennifer |
Shares withheld for tax | 791 | $309.27 | $244.6K |
| 2026-05-04 | Ferroni Stephen |
Shares withheld for tax | 22 | $309.27 | $6.8K |
| 2026-05-04 | O Sullivan Michael B |
Shares withheld for tax | 1,305 | $309.27 | $403.6K |
| 2026-05-04 | Pasch Matthew |
Shares withheld for tax | 78 | $309.27 | $24.1K |
Well-known investors holding BURL (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 1,450,868 | $450.2M | 0.16% | Added 8% |
| PRIMECAP Management | 2026-06-30 | 840,960 | $266.4M | 0.16% | Added 6% |
| Millennium Management (Israel Englander) | 2026-06-30 | 189,514 | $60.0M | 0.04% | Reduced 5% |
| D. E. Shaw & Co. | 2026-06-30 | 172,448 | $54.6M | 0.03% | No change |
| Two Sigma Investments | 2026-06-30 | 81,500 | $25.8M | 0.02% | New position |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 23,951 | $7.6M | 0.02% | Added 201% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 17,051 | $5.4M | 0.0% | Reduced 90% |
| Bridgewater Associates | 2026-06-30 | 7,707 | $2.4M | 0.01% | New position |