Finish Line Reports 30% Slide in Profit

Finish Line Inc. on Friday became the latest retailer to cite a challenging retail landscape for sharply lower quarterly earnings.

Still, shares of Finish Line jumped 3% to $17.30 in premarket trading, despite the broader market selloff, as the athletic-shoe retailer's results surpassed analyst expectations.

Like retailers across the spectrum, from department stores to specialty shops, Finish Line has been grappling with dwindling store traffic, the rise of Amazon.com and shoppers' shift towards discount chains such as T.J. Maxx and fast-fashion retailers like H&M Hennes & Mauritz AB.

Indianapolis-based Finish Line, which has stores inside struggling Macy's Inc. stores, has moved to shut locations while ramping up its ecommerce capabilities. On Friday, Chief Executive Sam Sato said amid "the challenging retail environment," the company made progress during the quarter to improve the business.

In March, Finish Line offered a forecast for the year that fell short of investors' expectations. Mr. Sato affirmed that outlook Friday, still projecting adjusted per-share profit of $1.50 to $1.56.

The company signaled that it expects sales to pick up a bit as the year progresses. Sales at stores open at least a year rose 1.5% in the first quarter, down sharply from the 4.6% clip a quarter earlier, but Finish Line said the metric would rise to 3% to 5% for the full year.

Overall for the three months ended May 28, the company reported a profit of $9.6 million, or 23 cents a share, down from $13.7 million, or 30 cents a share, a year earlier. The latest quarter's result included $35 million in expenses connected to store closings, down from a $168 million hit a year earlier.

A lower share count—Finish Line repurchased 1 million shares during the quarter—boosted the per-share earnings figure.

Revenue edged 2.3% higher to $453.5 million.

Analysts projected 22 cents in adjusted earnings per share on $449.6 million in revenue, according to Thomson Reuters.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

June 24, 2016 08:35 ET (12:35 GMT)

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