Dive Brief:

• Burlington on Thursday reported that second quarter total sales rose 9.9% to $1.5 billion as comparable store sales rose 2.9%, on top of last year’s 3.5% increase. New and non-comparable stores also contributed an incremental $94 million in sales during the quarter, according to a company press release.

• Net income in the quarter rose 51% year over year to $71 million, and adjusted net income rose 54% to $79 million from a year ago, the company also said. Gross margin in the quarter expanded by 70 basis points over last year to 41.4%, driven primarily by increased merchandise margin and slightly offset by higher freight costs.

• The company said it now expects full-year sales to rise between 10.1% and 10.6%, excluding the impact of 2017's extra week. That assumes a 2% to 3% comps rise for the rest of the year, which would send full-year comps up between 2.9% and 3.4% over last year. The company plans to open 43 net new stores for the year. Since the end of the year-ago quarter, Burlington opened 51 net new stores, according to the release.

Dive Insight:

As a retailer operating in the well-loved off-price segment, Burlington continues to post stellar numbers. Yet, the retailer's shares dropped Thursday morning as it just missed some analyst forecasts for same-store sales and disappointed others on guidance for the third quarter.

The company said it expects total sales in the current quarter to rise between 11% and 12%, and comp sales to rise between 2% and 3% after its 3.1% increase in the year-ago quarter. In his statement on Thursday, CEO Tom Kingsbury thanked "store, supply chain and corporate teams for contributing to these strong results.”

But not all off-price retailers are alike, and in some ways Burlington has more in common with Walmart than with TJX's Marshall's and TJ Maxx — and Walmart has recently released new apparel and home goods merchandise. Coresight Research, citing its own cross-shopping and consumer profile data on the off-price sector, noted that TJX's customers tend to be more affluent and cross-shop at different stores more than the typical Burlington or Ross Stores shoppers.

But even more different are department store-run off-price units, according to Coresight. In recent quarters, for example, Nordstrom Rack posted comp growth of just 0.4%, though merchandise improvements moved that up to a 4% increase in the most recent quarter. But Hudson’s Bay Company has reported comparable sales declines at its off-price Saks OFF 5TH banner and Neiman Marcus, which hasn't broken out results at its Last Call off-price unit, has been shuttering those stores. As Coresight notes, that "implies pockets of underperformance."

Because of its previous focus on outerwear (the retailer was once known as "Burlington Coat Factory") the retailer has an opportunity to grow its non-outerwear sales, Coresight also said. "Coats fell from 7% of the retailer’s sales in 2015 to 5% in 2017, and the company has room to dilute this category further by growing non-outerwear apparel sales more quickly," according to Coresight analysts.