The Finish Line Inc. (FINL) Tops Second Quarter Estimates, Shares Rally

Shares of The Finish Line Inc. (FINL) were trading up +1.06 or +4.42 percent to $25.05 per share in Friday’s premarket after the company released its fiscal 2017 second quarter earnings early this morning. The company beat estimates on both earnings and sales for the quarter. The Finish Line Inc. stock closed at $23.99 per share, up +0.12 or +0.50 percent in Thursday’s regular trading session.


Stock Analysis

Originally known as The Athlete’s Foot, Indianapolis, Indiana based The Finish Line Inc. was founded in 1976 by Alan Cohen, John Domont and David Klapper.
The three owners added two more investors in 1982 and opened the first Finish Line store in July of that year. The company has since grown to 980 Finish Line branded locations mostly located in U.S. malls and shops inside Macy’s Inc. (M) department stores. In addition, Finish Line operates JackRabbit, which includes 70 specialty running stores in 17 United States and the District of Columbia.

For the company’s fiscal second quarter 2017 ended on August 27th, The Finish Line Inc. reported net income of $22.1 million or $0.53 per diluted share versus $0.57 per share in the same period one year ago.
The Finish Line Inc. (FINL) Tops Second Quarter Estimates, Shares Rally
Image by Hans / Pixabay
Nevertheless, sales in the quarter increased to $509.4 million compared to $483.2 million in 2016’s second quarter. The analyst consensus was for Finish Line to report earnings of $0.53 per share on sales of $495 million.

Comparable store sales for the company increased +5.1 percent in the quarter over the prior year period. Analyst forecast the company would report an increase of just +2.9 percent in comp sales. As of the end of the quarter, consolidated merchandise inventories increased +1.6 percent to $372.3 million versus $366.3 million in the same period last year.

Sam Sato, Chief Executive Officer of Finish Line said in the company’s press release that, “Following a solid start to the year, our comparable store sales accelerated during the second quarter. The combination of top-line growth and disciplined expense management allowed us to partially offset the planned gross margin pressure from our successful inventory reduction actions and deliver earnings in-line with expectations. With our enhanced supply chain now operating efficiently, our focus shifts to streamlining our organizational structure to optimize productivity, adapt more quickly to market changes and better serve our customers. I am pleased with how we continue to execute our plan for fiscal 2017 while at the same time taking the necessary steps to position the company for long-term profitable growth.”

In the second quarter, Finish Line repurchased a total of 1.0 million shares of common stock with a value of $21.3 million, with 5.3 million shares left in its current board authorized share repurchase program. Also, the company reported it had $114.3 million in cash and cash equivalents on hand with no interest bearing debt.

The Finish Line Inc.’s guidance for its full fiscal year ending on February 25th, 2017 is for comparable store sales to increase between three to five percent, with diluted earnings per share of between $1.50 and $1.56. Finish Line shares are off from this morning’s highs but are up +33 percent year to date and could soon test their yearly high of $25.29 per share.

Other News About FINL

The Finish Line, Inc. – Value Analysis (NASDAQ:FINL) : September 16, 2016

CapitalCube gave the stock a rating of 50 compared to its peers.

(FINL)

Finish Line stock was downgraded earlier this month by the troubled bank.

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Published on Sep 23, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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