Finish Line profit, sales down in Q2

Finish Line missed analysts expectations for its second quarter amid continued heavy promotion in the athletic footwear market.



The retailer reported net income of $2.8 million, or 7 cents per share, for the quarter ended Aug. 26, down from $22.1 million, or 53 cents a share, a year ago.



Consolidated net sales fell 3.3% to $469.4 million. Finish Line same-store sales decreased 4.5%. In positive news during a disappointing quarter, same-store sales at Finish Line's in-store shops at Macy's same-store sales increased 5.6%.



“Our second quarter results were shaped by a very promotional marketplace for athletic footwear,” said Sam Sato, CEO of Finish Line. “With industry headwinds weighing on our sales and margin trends, we remain disciplined in managing our expenses and inventories. While we are planning for a challenging retail environment in the near-term, we are confident that the merchandise, digital, in-store and operational initiatives currently in place will allow us to achieve our current full year outlook and best position the company to deliver increased shareholder value over the long-term.”



Separately, Finish Line said its board of directors appointed Faisal Masud as a director of the company effective September 19. Masud is chief technology officer for Staples.



The company’s outlook remains unchanged from the update given August 28, 2017, which is Finish Line comparable sales to decrease 3% to 5% versus its previous guidance for an increase in the low-single digit range.



Adjusted earnings per share are now expected to be in the range of $0.50 to $0.60 for the 53-week fiscal year ending March 3, 2018, versus the previous guidance range of $1.12 to $1.23, and compared with adjusted earnings per share of $1.06 for the fiscal year ended February 25, 2017, which was a 52-week year. The company estimates that the additional week will contribute approximately $0.06 per share to fourth quarter and full year fiscal 2018 results.