Burlington Stores just announced a sales miss, a wage hike, and now the stock is getting slammed

Burlington shares slumped in premarket trading after the company announced a sales miss in the first quarter.

Sales came in at $US1.19 billion, less than the forecast for $US1.22 billion.

The off price retailer reported adjusted earnings per share of $US0.41, in line with consensus expectations according to Bloomberg.

Burlington also announced a wage hike for employees.

From July 5, full time and part-time associates who’ve been at Burlington for at least six months will be paid a minimum of $US9 an hour.

“The Company indicated that it expects efficiencies to offset expenses associated with the wage increases so it will result in a profit and loss neutral event.”

In the statement, CEO Tom Kingsbury wrote, “We are pleased with our 64% increase in adjusted EPS which was driven by a robust gross margin expansion. While our comp sales were positive for the ninth consecutive quarter, we were negatively impacted by the timing of IRS tax refunds, lower markdown sales due to significantly less markdown inventory, increased store closures due to weather, and receipt flow issues in three key Easter businesses.”

In premarket trading, shares fell more than 7%; the stock closed down around 2% on Monday at $US53.89 per share. The stock has rallied a massive 88% over the last 12 months.

Sales at stores open for at least a year rose 0.8% in the quarter, down from a 2.7% rise in Q1 2014.

For the full fiscal year, it expects net sales to rise in the range of 6% to 7%, and to open 25 new stores.

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