Burlington Stores, Inc. Announces Second Quarter and First Half Fiscal 2016 Results, Exceeding Prior Guidance; Raises Fiscal Year 2016 Outlook

For the Fiscal 2016 Second Quarter vs the Fiscal 2015 Second
Quarter:

• On a GAAP basis, net sales rose 9.7%, net income increased 87%
  and diluted net income per share rose 100%
• On a Non-GAAP basis,

• Comparable store sales increased 5.4%
• Adjusted Net Income per Share rose 105% to $0.39
• Adjusted EBITDA increased 31% to $99.1 million
• Comparable store inventory decreased 7% and turnover improved 15%

BURLINGTON, N.J.–(BUSINESS WIRE)–Burlington Stores, Inc. (NYSE: BURL), a nationally recognized off-price
retailer of high-quality, branded apparel at everyday low prices, today
announced its results for the second quarter and six months ended July
30, 2016.

Tom Kingsbury, Chief Executive Officer stated, “We are very pleased to
report second quarter results that included a 9.7% increase in net
sales, a 5.4% increase in comparable store sales and a 130 basis point
expansion in Adjusted EBITDA margin. These results were driven by the
continued improvement in the execution of our off-price operating model.
Our consistently strong performance has also enabled us to take
advantage of favorable interest rates resulting in the re-pricing of our
term loan on July 29, 2016. We believe we are well positioned for the
fall season and remain focused on delivering great value, relevant
brands, fresh product and an improved store experience for our customers
every day. I would like to thank our store and corporate teams for these
results.”

Fiscal 2016 Second Quarter Operating Results
(for the 13 week period ended July 30, 2016 compared with the 13 week
period ended August 1, 2015):

• Net sales increased 9.7%, or $110.8 million, to $1,255.1 million. This
  increase includes a 5.4% increase in comparable store sales, as well
  as an increase of $51.8 million from new and non-comparable stores.
  Our 5.4% comparable store sales increase is on top of a 5.6% increase
  in the second quarter of Fiscal 2015.
• Gross margin improved 40 basis points to 39.6% during the Fiscal 2016
  second quarter. This more than offset a 15 basis point increase in
  product sourcing costs, which are included in selling, general and
  administrative expenses (SG&A).
• SG&A, less product sourcing costs, as a percentage of net sales was
  27.3%, representing approximately 110 basis points of improvement
  compared with last year. This improvement was driven by greater
  leverage in store payroll, occupancy, utilities and includes a
  reversal of previously recorded benefits related expenses.
• The effective tax rate was 37.6% compared with 41.4% last year,
  primarily related to a decrease in our state tax rate and an increase
  in federal hiring credits.
• Net income increased 87.1% to $20.4 million, or $0.28 per diluted
  share.
• Adjusted Net Income increased 90.1% to $28.2 million, or $0.39 per
  share vs. $0.19 per share last year.
• Fully diluted shares outstanding were 72.0 million compared with 76.5
  million last year, primarily driven by the repurchase of 4.8 million
  shares since the end of the 2015 second quarter.
• Adjusted EBITDA increased 31.4%, or $23.7 million, to $99.1 million.
  Sales growth, SG&A leverage and gross margin expansion led to a 130
  basis point expansion in Adjusted EBITDA as a percentage of net sales.

Fiscal 2016 First Half Operating Results (for
the 26 week period ended July 30, 2016 compared with the 26 week period
ended August 1, 2015):

• Net sales increased 9.0%, or $210.4 million, to $2,537.7 million. This
  increase includes a 4.9% increase in comparable store sales, as well
  as an increase of $104.4 million from new and non-comparable stores.
  Our 4.9% comparable store sales increase is on top of a 3.1% increase
  in the first half of Fiscal 2015.
• Gross margin expanded by 40 basis points to 39.9% from 39.5%. This
  more than offset a 15 basis point increase in product sourcing costs
  which are included in SG&A.
• SG&A, less product sourcing costs, as a percentage of net sales was
  27.0% vs. 27.8% last year. The 80 basis point improvement was driven
  by increased leverage in store occupancy, marketing and store payroll.
• The effective tax rate was 37.6% compared with 39.0% last year,
  primarily related to a decrease in our state tax rate and an increase
  in federal hiring credits.
• Net income increased 58.2% to $57.9 million, or $0.80 per diluted
  share.
• Adjusted Net Income was $69.9 million vs. $46.1 million, or $0.97 per
  diluted share vs. $0.60 last year.
• Fully diluted shares outstanding were 72.2 million compared with 76.5
  million shares last year, primarily driven by repurchase of 4.8
  million shares since the end of the 2015 second quarter.
• Adjusted EBITDA increased 24.4%, or $43.2 million, to $220.1 million.
  The 110 basis point expansion in Adjusted EBITDA as a percent of net
  sales was driven by sales growth coupled with SG&A leverage and gross
  margin expansion.

Inventory

• Merchandise inventories were $745.0 million vs. $802.3 million last
  year, primarily driven by a comparable store inventory decrease of 7%.
  Pack and hold inventory represented 27% of inventory at quarter end
  vs. 28% last year.

Share Repurchase Activity

• During the second quarter, we invested $25 million of cash to
  repurchase 390,814 shares of our common stock ending the period with
  approximately $125 million remaining on its share repurchase
  authorization.

Debt Repricing

• On July 29, 2016, the Company completed the repricing of its senior
  secured term loan facility (the Term Loan Facility), which, among
  other things, reduced the applicable interest rate margins from 2.25%
  to 1.75%, in the case of prime rate loans, and from 3.25% to 2.75% in
  the case of LIBOR loans, with the LIBOR floor being reduced from 1.00%
  to 0.75%. As a result of this transaction, the Company recognized a
  non-cash loss on the extinguishment of debt of $3.8 million and
  incurred fees of $1.3 million, which were recorded in the line items
  “Loss on extinguishment of debt” and “Costs related to debt amendments
  and secondary offering,” respectively, in the Condensed Consolidated
  Statements of Operations.

Full Year Fiscal 2016 and Third Quarter 2016
Outlook

The Company is raising its full year Fiscal 2016 outlook based on its
strong first half performance and positive outlook for the remainder of
the year, including a reduction of interest expense associated with the
re-pricing of the Term Loan Facility. The Company notes that given
changes in share count, simple addition of its quarterly adjusted net
income per share will not round to the full fiscal year.

For the full Fiscal Year 2016 (the 52 weeks ending January 28, 2017),
the Company expects:

• Net sales to increase in the range of 7.8% to 8.3%;
• Comparable store sales to increase between 3.6% to 4.1%;
• Interest expense of approximately $59 million reflecting the Term Loan
  Facility repricing;
• Adjusted Net Income per Share in the range of $2.92 to $2.96, which
  reflects an increase in incentive compensation expense of $0.02 per
  share driven by operating performance above the Company’s expectations
  in the first half of the year, compared to the Company’s prior
  guidance of $2.68 to $2.78, utilizing a fully diluted share count of
  approximately 72.1 million shares, as compared with $2.31 in Fiscal
  2015;
• Adjusted EBITDA margin expansion to increase 50 to 60 basis points; and
• To open 25 net new stores.

For the third quarter of Fiscal 2016 (the 13 weeks ending October 29,
2016), the Company expects:

• Net sales to increase in the range of 7.1% to 8.1%;
• Comparable store sales to increase in the range of 2.5% to 3.5%; and
• Adjusted Net Income per Share in the range of $0.30 to $0.32, which
  reflects an increase in incentive compensation expense of $0.01 per
  share driven by operating performance above the Company’s expectations
  in the first half of the year, utilizing a fully diluted share count
  of approximately 72.0 million shares, as compared to $0.25 last year.

The Company has provided non-GAAP guidance as set out above. This does
not reflect the impact of potential future non-GAAP adjustments on GAAP
net income or GAAP diluted net income per share because the need for
some of these adjustments, and their impact, cannot be predicted with
reasonable certainty. The adjustments that cannot be predicted with
reasonable certainty include, but are not limited to, costs related to
debt amendments, secondary offerings, loss on extinguishment of debt,
and impairment charges as well as the tax effect of such items.

Note regarding Non-GAAP financial measures

The foregoing discussion includes references to Adjusted EBITDA,
Adjusted Net Income, and Adjusted Net Income per Share. The Company
believes these measures are useful in evaluating the operating
performance of the business and for comparing its results to that of
other retailers. These non-GAAP financial measures are defined and
reconciled to the most comparable GAAP measure later in this document.

Second Quarter 2016 Conference Call

The Company will hold a conference call on Thursday, August 25, 2016 at
8:30 a.m. Eastern Time to discuss the Company’s second quarter results.
The U.S. toll free dial-in for the conference call is 1-877-407-0789 and
the international dial-in number is 1-201-689-8562.

A live webcast of the conference call will also be available on the
investor relations page of the Company’s website at www.burlingtoninvestors.com.
For those unable to participate in the conference call, a replay will be
available after the conclusion of the earnings call on August 25, 2016
through September 7, 2016. The U.S. toll-free replay dial-in number is
1-877-870-5176 and the international replay dial-in number is
1-858-384-5517. The replay passcode is 13643375. Additionally, a replay
of the call will be available on the investor relations page of the
Company’s website at www.burlingtoninvestors.com.

Investors and others should note that Burlington Stores currently
announces material information using SEC filings, press releases, public
conference calls and webcasts. In the future, Burlington Stores will
continue to use these channels to distribute material information about
the Company, and may also utilize its website and/or various social
media sites to communicate important information about the Company, key
personnel, new brands and services, trends, new marketing campaigns,
corporate initiatives and other matters. Information that the Company
posts on its website or on social media channels could be deemed
material; therefore, the Company encourages investors, the media, our
customers, business partners and others interested in Burlington Stores
to review the information posted on its website, as well as the
following social media channels:

Facebook (https://www.facebook.com/BurlingtonCoatFactory/)
and Twitter (https://twitter.com/burlington).

Any updates to the list of social media channels the Company may use to
communicate material information will be posted on the investor
relations page of the Company’s website at www.burlingtoninvestors.com.

Participation in Goldman Sachs Annual Global Retailing Conference

The Company is scheduled to participate in the 23rd Annual Goldman Sachs
Global Retailing Conference, to be held at the Plaza Hotel in New York
City, on Thursday, September 8, 2016. Tom Kingsbury, Chairman, President
and Chief Executive Officer, Marc Katz, Executive Vice President and
Chief Financial Officer and Robert LaPenta, Jr., Treasurer will host a
fireside chat presentation at 1:40 p.m. Eastern Time. The fireside chat
presentation will be webcast live at the Company’s investor relations
web site, www.burlingtoninvestors.com.
An archived webcast will be available after the conclusion of the
presentation.

About Burlington Stores, Inc.

Burlington Stores, Inc., headquartered in New Jersey, is a nationally
recognized off-price retailer with fiscal 2015 revenue of $5.1 billion.
The Company is a Fortune 500 company and its common stock is traded on
the New York Stock Exchange under the ticker symbol “BURL.” The Company
operates 570 stores, inclusive of an internet store, in 45 states and
Puerto Rico, principally under the name Burlington Stores. The Company’s
stores offer an extensive selection of in-season, fashion-focused
merchandise at up to 65% off other retailers’ prices, including women’s
ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear,
accessories, home and coats.

For more information about the Company, visit www.burlingtonstores.com.

Safe Harbor for Forward-Looking and Cautionary Statements

This release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended (Exchange Act). All
statements other than statements of historical fact included in this
release are forward-looking statements. Forward-looking statements
discuss our current expectations and projections relating to our
financial condition, results of operations, plans, objectives, future
performance and business. You can identify forward-looking statements by
the fact that they do not relate strictly to historical or current
facts. We do not undertake to publicly update or revise our
forward-looking statements even if experience or future changes make it
clear that any projected results expressed or implied in such statements
will not be realized. If we do update one or more forward-looking
statements, no inference should be made that we will make additional
updates with respect to those or other forward-looking statements. All
forward-looking statements are subject to risks and uncertainties that
may cause actual results to differ materially from those we expected,
including competition in the retail industry, seasonality of our
business, adverse weather conditions, changes in consumer preferences
and consumer spending patterns, import risks, inflation, general
economic conditions, our ability to implement our strategy, our
substantial level of indebtedness and related debt-service obligations,
restrictions imposed by covenants in our debt agreements, availability
of adequate financing, our dependence on vendors for our merchandise,
events affecting the delivery of merchandise to our stores, existence of
adverse litigation and risks, availability of desirable locations on
suitable terms and other factors that may be described from time to time
in our filings with the Securities and Exchange Commission (SEC). For
each of these factors, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, as amended.

Contacts

Investor Relations:
Burlington Stores, Inc.
Robert L.
LaPenta, Jr.
855-973-8445
Info@BurlingtonInvestors.com
or
ICR,
Inc.
Allison Malkin
Melissa Calandruccio
203-682-8225

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