Finish Line Reports Profit Decline

Finish Line Inc. said profit slipped in its latest quarter, as higher overhead expenses offset a tepid increase in revenue.

Sales at stores open for at least a year edged 1.5% higher during the second quarter. The metric cooled after jumping 5.5% in the previous period, and the deceleration was sharper than some analysts anticipated. Analysts at B. Riley & Co., for example, had predicted a 4% rise, saying this week that athletic footwear growth moderated from the beginning to the end of the quarter, partly due to a later Labor Day this year.

Overall, the retailer reported a profit of $25.9 million, down from $26.2 million. On a per-share basis, Finish Line earned 57 cents, up from 54 cents thanks to a lower share count. The company repurchased about $4.6 million in shares during the quarter.

Revenue increased 3.5% to $483.2 million.

Analysts projected 57 cents in per-share earnings on $490.8 million in sales, according to Thomson Reuters.

Expenses rose 5.1% to $117.6 million. The company's gross margin narrowed to 33.0% from 33.2%.

The Indianapolis-based company's results in recent quarters have been crimped by more promotions and lower mall traffic, factors facing many retailers.

Finish Line's results come after athletic-gear company Nike Inc., one of Finish Line's main suppliers, said Thursday that profit in its latest quarter surged 23% on 5% revenue growth, owed in part to strength in China.

For the full year, Finish Line affirmed its forecast of same-store sales and earnings growth in the low-single to mid-single digit range.

Shares in the company dropped 2.5% in premarket trading, more than erasing the stock's year-to-date gain through Thursday's close.

Write to Lisa Beilfuss at [e-mail]

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(END) Dow Jones Newswires

September 25, 2015 08:35 ET (12:35 GMT)

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