Finish Line reports 'disappointing' end to fiscal year, misses FY earnings guidance

By

Obi Anyanwu

Published
Mar 24, 2017

Finish Line reported on Friday a “disappointing finish” to its fiscal year, with decreases in fourth quarter gross profit and a net loss.
 
Sam Sato, Finish Line CEO, said that February was increasingly difficult for the company and competitive pricing affected fourth quarter product margins.

 
“We know we must improve the execution of our merchandise strategies to drive increased full price selling and fuel sustained comparable sales growth,” Sato said.
 
Consolidated net sales for the year increased 2.5% to $1.84 billion, and comparable sales met the low end of expectations at 0.3%. The non-GAAP diluted earnings per share did not have the same luck, missing expectations at $1.06, and net loss for the year was $9.5 million compared to net income of $4.0 million in the prior year.

Fourth quarter comparable sales fell 4.5% as expected and non-GAAP earnings per share for the quarter missed expectations at $0.50. In addition, consolidated net sales decreased 0.4% from the previous year’s fourth quarter.
 
Despite the missed expectations, Finish Line’s business at Macy’s performed well, increasing 35% in the fourth quarter and nearly 30% for the year.
 
Finish Line also sold its JackRabbit business in the fourth quarter to CriticalPoint Capital LLC. The company began exploring alternatives for the business since November 2016. According to Buckingham Research Group analyst Scott Krasik, JackRabbit had no history of profitability. The sale to CriticalPoint included 65 JackRabbit stores and the trademark and name.
 
For fiscal 2018, the company expects earnings per share to be in range of $1.12 to $1.23 and comparable sales to increase in low-single digits.