How Finish Line Inc (NASDAQ:FINL) Shares Reacted to Its Latest Earnings Report


Finish Line Inc (NASDAQ:FINL) shares were up 21.80% to $20.45 on Friday after the company reported earnings per share of $0.23, which is $0.01 higher than the consensus estimate at $0.22. The company has a market cap of $1.06 billion at 41.45 million shares outstanding.

Finish Line is a specialty retailer that operates the Finish Line and JackRabbit brands. The Finish Line division is a retailer of athletic shoes, apparel and accessories while JackRabbit is a lifestyle retailer of precision-fitted running shoes, apparel and accessories. The company operates approximately 590 Finish Line stores and over 70 JackRabbit stores. Both also have e-commerce platforms.

In its latest earnings release, Finish Line reported revenue of $453.5 million versus the consensus estimate at $445 million, representing a 2.3% gain from the same period a year ago. Comparable store sales saw 1.5% growth and management expects further growth of 3% to 5% by February 2017. For that period, earnings per share is expected to reach $1.50 to $1.56.

Finish Line CEO Samuel Sato emphasized that the company was able to see strong figures despite a challenging environment.

Importantly, we’ve made further progress toward optimizing our supply chain and improving execution throughout the enterprise. We remain focused on successfully executing the strategic initiatives for our Finish Line, Macy’s, and JackRabbit businesses while creating an operating model that drives profitable growth and generates shareholder value consistently over the long-term,” he added.

Meanwhile, consolidated merchandise inventories were up 9.0% to $352.3 million, higher than inventories of $323.3 million as of May 30, 2015. The company had no interest-bearing debt and $85.4 million in cash and cash equivalents in the latest reporting period.

Keep in mind, however, that the company also saw a 30% slide in profits for the quarter, echoing the slump seen by major retailers such as JC Penney, Target, and Nordstrom for the same period. Finish Line had profits of $9.6 million compared to $13.5 million in the same period last year.


DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.