Finish Line Delivers Mixed 1Q - Analyst Blog


Shutterstock photo

The Finish Line Inc. ( FINL ) posted adjusted earnings per share of 24 cents in the first quarter of fiscal 2013, beating the Zacks Consensus Estimate by a penny. However, the quarterly earnings per share were 6 cents below the year-ago results.

Indianapolis based Finish Line reported year-over-year net sales growth of 6.5% in the quarter to $319.0 million backed by strong comparable sales (comps). However, the sales figure slightly fell short of the Zacks Consensus Estimate of $321.0 million. Comps increased 8%, with store comps growing 6% and digital comps climbing 28%.

By category, footwear comps, which accounted for 89% of the first-quarter mix, were up 8.5%. In the footwear category, running comps increased at low double digits. Average selling price at Footwear increased 5.5%. Soft good's comps increased 4.6%. The company's decision to leave the private label business marred soft goods sales to some extent. 

During the quarter, Finish Line's gross profit nudged up 1.4% year over year to $104.7 million. Gross margin shrunk 150 basis points year over year to 33.0%.


At quarter end, Finish Line had cash and cash equivalents of $262.0 million, compared with $307.5 million in the year-ago period. The company had no interest-bearing debt.

Finish Line bought back 1.5 million shares in the first quarter for $32.4 million. The company has now 2.3 million shares left in its authorization of 5 million shares.

Store Update

Finish Line opened 9 stores during the quarter and closed 6. In addition, the company relocated or refurbished 7 stores and ended the quarter with 640 units.


Finish Line expects its earnings per share to grow 6-7% year over year in fiscal 2013. The guidance takes an annual comparable store sales growth of 5-6% into account.


This premium retailer of athletic shoes, apparel and accessories is in a strong product cycle for athletic footwear. The uptrend in comps will continue to bode well for the company.

However, management embarked on a set of initiatives to spur technology, stores and digital capabilities and consequently invested substantially. This will lead to increased SG&A expenses and constrained operating margins in 2013. However, management set itself a target to achieve $2 billion in sales and $2.50 in earnings per share by fiscal 2016.

Finish Line, which competes with Genesco Inc. ( GCO ), currently, retains a Zacks #2 Rank (short-term Buy rating). For the long term, we reiterate our Neutral recommendation on the stock.

FINISH LINE-CLA (FINL): Free Stock Analysis Report
GENESCO INC (GCO): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: FINL , GCO

More from


Equity Research
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by