Finish Line goes off course in Q3

The Finish Line Inc. widened its loss in the third quarter, falling short of expectations amid slumping sales for apparel and accessories.



The chain reported a loss of $40.4 million for the quarter, compared to a loss of $21.84 million in the year-ago period. On a per-share basis, the retailer said it had a loss of $1. Losses, adjusted to account for discontinued operations (related to its process of exploring strategic alternatives for its Jack Rabbit specialty running stores business and severance costs, were 24 cents per share.



The results did not meet Wall Street expectations.



Finish Line’s consolidated net sales rose 3% to $371.7 million.



Finish Line Macy’s sales increased 33.2%.



Same- store sales increased 0.7%.



“We are disappointed that our third quarter sales and earnings fell short of our expectations,” said Sam Sato, CEO of Finish Line. “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.”



Sato noted that the chain is making progress towards its goal of developing a more efficient operating model “that drives increased profitability and greater shareholder value over the long-term.”



“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,” he said.



Finish Line cuts its fiscal year 2017 view. For the fiscal year ending February 25, 2017, the company now expects comparable store sales to range between flat to up 1% and non-GAAP diluted earnings per share from continuing operations between $1.24 and $1.30.



For the fourth quarter ending February 25, 2017, the company expects Finish Line comparable store sales to be down between 3% - 5% and non-GAAP diluted earnings per share from continuing operations between $0.68 and $0.73.



Finish Line has approximately 970 Finish Line branded locations primarily in U.S. malls and shops inside Macy’s department stores.