Finish Line net sales and store sales decrease for Q3 2016

By

Obi Anyanwu

Published
Jan 8, 2016

The Finish Line, Inc. announced on Thursday the financial results for its third quarter of fiscal 2016 ended on November 28, 2015.

The company reported a 3.5% decrease in consolidated net sales to $382.1 million, and a 5.8% decrease in comparable store sales. Consolidated merchandise inventories increased 4.0% to $414.6 million compared to $398.6 million in the previous year, which was driven by an increase in receipts during the last week of the quarter and was offset by an average inventory decline of 14% throughout the quarter.
 
“Our third quarter performance was severely impacted by a disruption in our supply chain following the implementation of our new warehouse and order management system,” said Glenn Lyon, Chairman and Chief Executive Officer of Finish Line.

"We worked quickly to address the disruption in our system and improve our operating capabilities, increasing technical and operational resources including third party experts. We have achieved a pickup in sales trends as the quantity and quality of our inventory improved in recent weeks. Fourth quarter-to-date comps for Finish Line, which include the fiscal month of December ended January 2, 2016, were up 6.2%. We anticipate that we’ll return to a stable operating environment during the first quarter and we will start leveraging the multiple benefits from our supply chain system enhancements,” he added.
 
In addition, the company announced that it would be closing 150 stores over the next four years to improve the profitability of its stores. The stores produce average annual sales of $1 million, which the company plans to recapture through digital sales.
 
For the fourth quarter ending on February 27, 2016, Finish Line expects comparable store sales to be up in the low single to mid-single digit range, and for the full fiscal year, the company expects comparable store sales to be up in the low single digits.