Finish Line third quarter misses expectations, updates fiscal outlook

By

Obi Anyanwu

Published
Dec 21, 2016

The Finish Line reported on Wednesday its third quarter 2017 results, which just missed its expectations. Consolidated net sales increased 3% to $371.7 million and non-GAAP diluted loss per share from continuing operations were $(0.24).

Sam Sato, Chief Executive Officer of Finish Line, said, “Steep declines in apparel and accessories offset a high-single digit footwear comp gain and a 33% sales increase in our Macy’s business. While we continue to work on narrowing our soft goods assortment and aligning our offering with customer demand, our primary focus remains on growing the cornerstones of the Company’s foundation - our Finish Line footwear business and our partnership with Macy’s - through enhanced customer engagement. At the same time, we are making progress developing a more efficient operating model that drives increased profitability and greater shareholder value over the long-term.”

In addition to Finish Line Macy’s sales increasing 33.2%, comparable store sales increased 0.7%. Gross profit increased to $99.4 million from $83.0 million and SG&A expenses increased to $118.1 million from $115.7 million. Net loss increased to $40.4 million from $21.8 million due to JackRabbit, which Finish Line reported as discontinued operations.

The retailer announced in November that it is exploring alternatives for JackRabbit including a sale.

“We are now fully benefitting from our enhanced supply chain and are just beginning to realize the $6 million in annualized savings from our actions aimed at streamlining our organizational structure,” said Sato. “Despite our recent underperformance, we remain confident in the strategic course we have set for the Finish Line.”

Finish Line expects its fiscal year comparable store sales to range between flat and up 1% and for its non-GAAP diluted earnings per share from continuing operations to range from $1.24 to $1.30. The company also expects its fourth quarter comparable sales to be down between 3% and 5% and for the non-GAAP diluted EPS from continuing operations to be between $0.68 and $0.73.