Dec 23, 2009
Finish Line sales revival sends shares up
Dec 23, 2009
By Alexandria Sage
SAN FRANCISCO, Dec 22 (Reuters) - Finish Line Inc (FINL.O) said Tuesday 22 December its same-store sales have climbed 4.9 percent in the three weeks to Dec. 20 in a sign of revived demand for the retailer's athletic shoes and apparel.
The strong sales and the company's better-than-expected quarterly results for the period ending Nov. 28, helped by tight controls on costs and inventories, sent its shares up 7.5 percent.
"We're not promoting to get these sales," Chief Financial Office Ed Wilhelm told Reuters, citing improved gross margins in the quarter. "Once we get customers into the stores we're converting them from a shopper to a buyer."
The company has been focused on carrying popular brands an augmenting shoe sales with add-ons like socks, shorts or hoodies.
Executives cited strength in the running and toning categories.
Finish Line said third-quarter net profit from continuing operations was $6.5 million, or 12 cents per share, from a year-ago net loss of $6.5 million, or a loss of 12 cents per share.
Adjusting for a tax benefit from its terminated merger with Genesco Inc (GCO.N), Finish Line posted profit of $16,000, or nil cents per share. Analysts on average had been expecting a net loss of 9 cents per share, according to Thomson Reuters
Revenue fell 0.2 percent to $240.1 million but was better than the $233.6 million expected by Wall Street.
Same-store sales -- a key measure of retail health that measures sales at stores open at least a year -- rose by 4.9 percent from Nov. 29 through Dec. 20, the company said. That compared with a 22.1 percent decrease in the year-ago period.
Finish Line, along with larger competitor Foot Locker Inc (FL.N), has seen sales slump in the downturn as consumers have cut back on discretionary purchases. Losses from Finish Line's discontinued Man Alive chain have also weighed on results in recent quarters.
Still, the company has cut inventory and costs to offset the weak sales.
Chief Executive Glenn Lyon said in a statement that the company continued to "display an ability to perform well and improve our business in what remains a cautious consumer environment."
Consolidated merchandise inventories fell by 19 percent in the quarter, Finish Line said.
Gross margins rose to 29.5 percent of sales from 27 percent.
Shares of Finish Line were up 7.5 percent at $10.75 in after-hours trading on the Nasdaq, after closing at $10.00.
(Reporting by Alexandria Sage, editing by Matthew Lewis)
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