Business news : Finish Line Raises FY Guidance on Q3 Rebound

The Finish Line Inc. earned $2.3 million, or 5 cents a share, in its third quarter ended Nov. 30, rebounding from a loss of $103,000, or less than one cent a share, a year ago. Results were 5 cents ahead of Wall Street's consensus estimate. Comps increased 7.1 percent and the company raised its full-year outlook.

For the thirteen weeks ended November 30, 2013:

• Consolidated net sales were $364.5 million, an increase of 22.9 percent over the prior year period.
• Finish Line comparable store sales increased 7.1 percent.The
• On a GAAP basis, diluted earnings per share were $0.05.
• Non-GAAP diluted earnings per share, which excludes the impact of impairment charges, were $0.06.

“We are very pleased with the top and bottom line performance we delivered in the third quarter,” said Chairman and Chief Executive Officer, Glenn Lyon. “Our commitment to developing a premier omni-channel platform is strengthening both our customer relationships and our brand partnerships while also reinforcing our market leadership position. We are continually adapting and refining our strategies in this rapidly evolving retail landscape to ensure we meet the needs of today’s empowered consumer. Finish Line is on the right strategic course and is well-positioned to deliver on our near and longer term goals.”

Balance Sheet

As of November 30, 2013, consolidated merchandise inventories increased 19.5 percent to $360.5 million compared to $301.7 million as of December 1, 2012. The increase resulted primarily from the start-up of Macy’s business. For Finish Line, merchandise inventories increased 0.6 percent.

The company repurchased 200,000 shares of its common stock in the third quarter, totaling $5.2 million. The company has 4.1 million shares remaining on its current Board authorized repurchase plan.

As of November 30, 2013, the company had no interest-bearing debt and $111.9 million in cash and cash equivalents, compared to $168.2 million a year ago.

Outlook

For the fiscal year ending March 1, 2014, Finish Line now expects comparable store sales to increase approximately 3 percent-4 percent compared to its previous expectation for a low single digit increase. The Company now expects Non-GAAP earnings per share to increase 9 percent to 12 percent to $1.60-$1.65 from fiscal year 2013 Non-GAAP diluted earnings per share of $1.47. This compares to its previous expectation for a mid-single digit increase.


The Finish Line, Inc. is a premium retailer of athletic shoes, apparel and accessories. Headquartered in Indianapolis, Finish Line has 658 stores in malls across the U.S., manages the athletic footwear inventory in 660 Macy’s stores including 198 branded or staffed shops, and employs more than 13,000 sneakerologists who help customers every day connect with their sport, their life and their style. Online shopping is available at www.finishline.com and www.macys.com.

Finish Line also operates the Running Specialty Group through a venture with Gart Capital Partners. This includes 47 specialty running shops in 12 states and the District of Columbia under The Running Company, Run On!, Blue Mile, Boulder Running Company and Roncker’s Running Spot banners.

The Finish Line, Inc.
					Consolidated Statements of Operations (Unaudited)
					(In thousands, except per share and store/shop data)
					Thirteen Weeks Ended								Thirty-Nine Weeks Ended
					November 30,				December 1,				November 30,				December 1,
					2013				2012				2013				2012
Net sales					$	364,455			$	296,623			$	1,151,538			$	1,000,683
Cost of sales (including occupancy costs)						256,607				206,833				790,358				671,684
Gross profit						107,848				89,790				361,180				328,999
Selling, general and administrative expenses						104,092				91,447				306,903				271,004
Store closing costs						166				1				369				421
Impairment charges						841				-				841				-
Operating income (loss)						2,749				(1,658)				53,067				57,574
Interest income, net						3				38				27				167
Income (loss) before income taxes						2,752				(1,620)				53,094				57,741
Income tax expense (benefit)						1,161				(811)				20,796				22,033
Net income (loss)						1,591				(809)				32,298				35,708
Net loss attributable to redeemable noncontrolling interest						727				702				1,602				1,436
Net income (loss) attributable to The Finish Line, Inc.					$	2,318			$	(107)			$	33,900			$	37,144
Diluted earnings per share attributable to The Finish Line, Inc. shareholders					$	0.05			$	-			$	0.69			$	0.72
Diluted weighted average shares						48,709				49,949				48,733				50,977
Dividends declared per share					$	0.07			$	0.06			$	0.21			$	0.18
Finish Line store activity for the period:
Beginning of period						659				638				645				637
Opened						3				14				22				27
Closed						(4)				(1)				(9)				(13)
End of period						658				651				658				651
Square feet at end of period														3,566,404				3,531,426
Average square feet per store														5,420				5,425
Branded shops within department stores activity for the period:
Beginning of period						133				-				3				-
Opened						48				-				178				-
Closed						-				-				-				-
End of period						181				-				181				-
Square feet at end of period														224,515				-
Average square feet per shop														1,240				-
Running Company store activity for the period:
Beginning of period						39				19				27				19
Acquired						4				5				13				5
Opened						4				1				7				1
Closed						-				-				-				-
End of period						47				25				47				25
Square feet at end of period														154,348				78,120
Average square feet per store														3,284				3,125

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