Business news : The Finish Line Tops Q2 Earnings Estimates

The Finish Line Inc. reported earnings rose 6.1 percent in its second quarter ended Aug. 31, to $26.5 million, or 54 cents a share, exceeding Wall Street's consensus target of 45 cents with the aid of expense controls and share buybacks. Consolidated net sales grew 13.3 percent to $436.0 million with Finish Line comparable store sales increasing 0.9 percent

“We are pleased to have delivered a solid second quarter performance,” said Chairman and Chief Executive Officer, Glenn Lyon. “The combination of positive comparable sales and good expense control drove a 10 percent increase in earnings per share over last year. At the same time, we continued to make good progress building our business with Macy’s and growing our Running Specialty Group. Looking ahead, we are cognizant of the headwinds currently facing the retail industry and this has been incorporated into our near-term planning. We remain confident that our strategy to create a leading multi-divisional, omni-channel business will lead to sustainable sales and earnings growth and increased shareholder value over the long term.”

Balance Sheet
As of August 31, 2013, consolidated merchandise inventories increased 18.1 percent to $296.0 million compared to $250.6 million as of September 1, 2012. The increase resulted primarily from the start-up of Macy’s business. For Finish Line, merchandise inventories decreased 0.5 percent.

The company repurchased 250,000 shares of its common stock in the second quarter, totaling $5.5 million. The company has 4.3 million shares remaining on its current Board authorized repurchase plan.

					The Finish Line, Inc.
					Consolidated Statements of Income (Unaudited)
					(In thousands, except per share and store/shop data)
					Thirteen Weeks Ended								Twenty-Six Weeks Ended
					August 31,				September 1,				August 31,				September 1,
					2013				2012				2013				2012
Net sales					$	436,030			$	385,011			$	787,083			$	704,060
Cost of sales (including occupancy costs)						289,693				250,461				533,751				464,851
Gross profit						146,337				134,550				253,332				239,209
Selling, general and administrative expenses						103,455				94,711				202,811				179,557
Store closing costs						17				325				203				420
Operating income						42,865				39,514				50,318				59,232
Interest income, net						10				58				24				129
Income before income taxes						42,875				39,572				50,342				59,361
Income tax expense						16,682				15,136				19,635				22,844
Net income						26,193				24,436				30,707				36,517
Net loss attributable to redeemable noncontrolling interest						314				537				875				734
Net income attributable to The Finish Line, Inc.					$	26,507			$	24,973			$	31,582			$	37,251
Diluted earnings per share attributable to The Finish Line, Inc. shareholders					$	0.54			$	0.49			$	0.64			$	0.72
Diluted weighted average shares						48,757				50,866				48,744				51,135
Dividends declared per share					$	0.07			$	0.06			$	0.14			$	0.12
Finish Line store activity for the period:
Beginning of period						651				640				645				637
Opened						9				4				19				13
Closed						(1)				(6)				(5)				(12)
End of period						659				638				659				638
Square feet at end of period														3,571,267				3,449,041
Average square feet per store														5,419				5,406
Branded shops within department stores activity for the period:
Beginning of period						44				-				3				-
Opened						89				-				130				-
Closed						-				-				-				-
End of period						133				-				133				-
Square feet at end of period										-				158,948				-
Average square feet per shop										-				1,195				-
Running Company store activity for the period:
Beginning of period						38				19				27				19
Acquired						-				-				9				-
Opened						1				-				3				-
Closed						-				-				-				-
End of period						39				19				39				19
Square feet at end of period														119,964				60,436
Average square feet per store														3,076				3,181

As of August 31, 2013, the company had no interest-bearing debt and $203.8 million in cash and cash equivalents, compared to $254.2 million a year ago.

OutlookFor the fiscal year ending March 1, 2014, the company now expects Finish Line comparable store sales to increase low-single-digits compared to its previous expectation for a slight increase. The company still expects earnings per share to increase mid-single digit percent over fiscal year 2013 Non-GAAP diluted earnings per share of $1.47.

By press release through sportsonesource

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