Burlington Sales Impacted by ‘Significantly’ Warmer Fall Temperatures

A warmer-than-normal autumn wasn’t enough to stall sales growth for Burlington Stores.

The off-price clothing retailer posted earnings Tuesday (Nov. 26) showing total sales up 11% for the third quarter (Q3), following 12% sales growth last year.

Comparable sales — up 1% — were affected by “significantly warmer temperatures than last year,” CEO Michael O’Sullivan said during an earnings call.

“At Burlington, we are particularly sensitive to warmer weather in Q3,” he told analysts. “Many shoppers still think of us as Burlington Coat Factory. In October, our cold weather businesses represented almost a quarter of our sales.”

O’Sullivan noted that for the first half of the quarter, the company’s sales are dominated by back-to-school purchases. From there, weather becomes the name of the game.

“If the temperature for the remainder of the quarter is cooler than last year, then that helps to drive positive comp growth. On the other hand, if it is warmer than last year, then that is a headwind to comp,” he said.

Looking ahead to the holidays, O’Sullivan noted a “relatively compressed” holiday calendar facing retailers this year, with fewer days between Thanksgiving and Christmas. With that in mind, Burlington says it is adhering to its earlier guidance range of flat to 2% comp growth for the fourth quarter.

As PYMNTS wrote earlier this week, there are indications that consumer spending momentum might slow during the final weeks of the year, a critical time for retailers.

For example, on Target’s third-quarter earnings call last week, CEO Brian Cornell said, “consumers tell us their budgets are being stretched. They’re becoming resourceful, focusing on deals, then stocking up when they find them. Consumers allow themselves to splurge a little bit when they find the right item.”

At the same time, a PYMNTS Intelligence report “Intrigue or Fatigue? Amid Crowded Deals Landscape, Financial Lifestyle Drives Consumers’ Black Friday Interest,” found that a third of consumers feel as though they are being “bombarded” by sales promotions. And 41% said the increased frequency makes the deals feel less special.

Also Tuesday, O’Sullivan outlined Burlington’s plans to open new stores, noting that most of the 101 new locations this year are “in busy strip malls with national co-tenants.”

The company has also been supplementing its “new store pipeline” by acquiring leases from retailers that are going through bankruptcy. For example, Burlington last year picked up 64 former Bed Bath and Beyond locations through this process.