Finish Line posts flat sales performance following Sports Direct acquisition
The UK-based sports retailer in April acquired 3.2 million shares in Finish Line and became the fifth largest shareholder of the retailer. Sports Direct acquired a stake in the retailer to “hopefully build a relationship and develop commercial partnerships with the relevant parties. They also help the company to build relationships with key suppliers and brands.”
Sports Direct also acquired Agent Provocateur, Iconix, Bob’s Stores and Eastern Mountain Sports this year.
Finish Line missed its earnings per share expectations to end the fiscal year and fourth quarter and also posted a net loss. Comparable sales also fell 4.5%, but met expectations. The retailer also sold its JackRabbit business at the start of 2017 due to the business’ lack of profitability.
For the first quarter of 2018, consolidated net sales decreased 0.1% to $429.8 million, comparable store sales fell 1.1%, and Macy’s sales increased 13.6%.
GAAP diluted earnings per share from continued operations was $0.20 and was $0.23 on a non-GAAP basis, and Finish Line repurchased 250,000 shares of common stock, or $3.8 million, in the quarter, with 4.5 million shares remaining on its current repurchase program.
“We delivered earnings in-line with our expectations despite some unanticipated headwinds late in the quarter,” said Finish Line CEO Sam Sato.
“Following low-single digit comparable sales growth for the combined March/April period, weak traffic trends, and a difficult product launch comparison in May resulted in comps coming in below plan. We offset pressure on our top-line and protected profitability with disciplined expense management resulting from the work we’ve done creating a more nimble and efficient organization. While the retail environment remains challenging, we continue to be confident that our merchandising, digital, in-store, and operational initiatives underway will help fuel profitable growth beginning in the back half of this fiscal year, better positioning the company to deliver increased shareholder value over the long-term.”
Finish Line reaffirmed its fiscal year guidance and expects comparable store sales to increase in the low-single digits range and for adjusted earnings per share to be between $1.12 and $1.23. The retailer also expects its second quarter comparable sales to decrease in the low-single digits.
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