By Lisa Beilfuss
Finish Line Inc. said profit rose 11% in its latest quarter, as
merchandise assortment improved and promotional activity eased at
the sports-apparel retailer.
Better-than-expected results pushed Finish Line's shares 4%
higher to $28.12 in midday trading, adding to the 11% gain notched
this year through Thursday's close.
The Indianapolis-based company's results reverse struggles in
recent quarters that had been stung by more promotions and lower
mall traffic. The report Friday showed a 9.1% jump in revenue and a
same-store-sales increase of 5.5%.
Fellow sports retailer Nike Inc., which is one of Finish Line's
main suppliers, similarly beat expectations when it reported
quarterly results Thursday. The rise of "athleisure"--so named for
the rise in consumers sporting athletic gear for more than just
exercise, like the ubiquitous yoga pant--has benefited retailers in
the space.
Women's merchandise led the Finish Line's first-quarter sales
increase and the running category grew in the high single-digits,
company President Michael Sato said on a call with analysts.
Basketball comparative-store sales returned to positive territory,
helped by demand for Under Armour's new Steph Curry shoe and retro
styles, after some recent product misses in the category.
In all for the first quarter, Finish Line reported a profit of
$13.8 million, or 30 cents a share, up from a year-earlier profit
of $12.4 million, or 25 cents a share. Revenue rose to $443.4
million from $406.5 million.
Analysts had anticipated 24 cents in earnings per share and
$429.8 million in sales.
The company closed 15 stores during the quarter, bring its tally
to 624 shops.
Gross margin contracted to 31.3% from 31.7%. Chief Executive
Glenn Lyon said on the earnings call that Finish Line expects some
product-margin challenges during the current quarter, adding that
improvement during the later half of the year is expected.
Finish Line affirmed its full-year outlook, still expecting
per-share earnings to increase by a percentage in the low-single to
mid-single-digit range over the $1.67 earned in 2015. Sales at
stores that aren't newly opened or closed also are expected to grow
by a percentage in the low-single to mid-single-digit range.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Access Investor Kit for The Finish Line, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US3179231002
Access Investor Kit for NIKE, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6541061031
Subscribe to WSJ: http://online.wsj.com?mod=djnwires