08:46 AM EST, 03/07/2024 (MT Newswires) -- Burlington Stores ( BURL ) reported a better-than-expected fiscal fourth quarter on Thursday as gross margin improved and inventories declined, while the off-price retailer forecasts results in fiscal 2024 to be higher than the previous year.

The company's adjusted earnings came in at $3.66 a share for the key holiday quarter ended Feb. 3, up from $2.96 a year earlier and topping the Capital IQ-polled consensus of $3.30. Excluding expenses from its acquisition of Bed Bath & Beyond leases in 2023, adjusted EPS was $3.69.

Sales advanced 14% to $3.12 billion while overall revenue increased to $3.13 billion from $2.74 billion in the prior-year quarter. The Street's view was for $3.05 billion. Comparable sales gained 2%, compared with the 1% rise modeled by analysts. The stock was up 4.9% in premarket trading.

Gross margin expanded by 190 basis points to 42.6%, as merchandise margins and freight improved by 140 and 50 basis points, respectively. Total costs and expenses widened to $2.81 billion from $2.49 billion year-on-year. At the end of fiscal 2023, merchandise inventories fell to $1.09 billion from $1.18 billion, while comparable store inventories retreated 5%.

Burlington anticipates adjusted earnings to be in a range of $7 to $7.60 a share for fiscal 2024, excluding the lease expenses, while sales are pegged to grow between 9% and 11%. Comparable store sales are set to be flat to up 2%. The Street is looking for normalized EPS of $7.07, revenue of $10.5 billion and same-store sales of 2.2%. In fiscal 2023, adjusted EPS increased to $6.06 from $4.26, sales inclined 12% and comparable store sales moved 4% higher.

"We remain confident in the comparable store sales and margin assumptions we shared in November," Chief Executive Michael O'Sullivan said in a statement. "There is a lot of uncertainty in the external environment, so we are planning our business flexibly, and we are ready to chase if the sales trend is stronger."

For the ongoing quarter, adjusted EPS is seen at $0.95 to $1.10, excluding $0.09 of expected expenses tied to the acquired leases, while analysts estimate $1.12. Comparable sales are projected to be flat to up 2%, while the Street is looking for growth of 2.1%.

"Although it makes sense to be cautious in the short term, we are very excited about the long-term outlook for our business," O'Sullivan said. "As discussed in November, we believe we have the potential to reach $16 billion in total sales and $1.6 billion in adjusted operating income in the next five years."

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