Burlington Stores Inc

Q2 results were strong—with tariff refunds stripped out, momentum still robust. - Total sales +11% YoY (on top of +10% last year); comp sales +2% YoY (on top of +5% last year), with a 7% 2-year comp stack. - Adjusted EPS +38% YoY (on top of +39% last year). Company emphasized flow-through converting sales into margin/EPS. - Operating margin expanded +100 bps YoY (well above guided +60 bps high end). - Notable mechanics: Q2 included ~$55M tariff refunds recognized as lower COGS, contributing +0.64 EPS (but management discussed underlying performance ex-refunds).

Tariff refunds: management chose to reinvest into customer value (not “one-time earnings”). - Refunds were ~$55M in Q2, and the company expects the direct full-year impact to be neutral to earnings because it plans to reinvest the benefit in Q3/Q4. - Reinvestment plan: ~40% of the refunds into Q3 and ~60% into Q4, expected to pressure margins in those quarters (lower gross/EBIT margins vs last year), but supports sharper pricing/value for customers. - Key “surprising/good” angle: management framed the refunds as modest relative to peers and argued they can still hit targets without boosting earnings.

Full-year guidance raised (EPS upside passed through), but sales outlook kept steady due to consumer uncertainty. - FY 2026 earnings outlook increased by passing through the entire Q2 underlying beat. - Sales guidance: now total sales +10% to +11%; comp +3% to +4%. - Adjusted EBIT margin: expected to expand +20 bps to +40 bps (vs last year). - Adjusted EPS guidance: $11.77 to $11.97 (+16% to +18% vs FY2025), reflecting Q2 upside. - Important risk control: while management feels good about upside, they maintain sales guidance because of softer retail comps/macro pressure and uncertainty around demand.