Finish Line Inc. Reports Operating Results (10-Q)
Finish Line Inc. has a market cap of $1 billion; its shares were traded at around $18.79 with a P/E ratio of 16 and P/S ratio of 0.8. The dividend yield of Finish Line Inc. stocks is 0.9%. Finish Line Inc. had an annual average earning growth of 3% over the past 10 years.FINL is in the portfolios of Louis Moore Bacon of Moore Capital Management, LP, Robert Olstein of Olstein Financial Alert Fund, Manning & Napier Advisors, Inc, Steven Cohen of SAC Capital Advisors, Chuck Royce of Royce& Associates, George Soros of Soros Fund Management LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: Net sales increased 5.8% for the thirty-nine weeks ended November 27, 2010 compared to the thirty-nine weeks ended November 28, 2009. The increase was attributable to a comparable store net sales increase of 7.3% for the thirty-nine weeks ended November 27, 2010, a $4.7 million increase from 11 new stores opened subsequent to November 28, 2009 and a $3.4 million increase in net sales from existing stores that were open for only part of the thirty-nine weeks ended November 28, 2009, partially offset by reduced sales of $14.0 million from 23 closed stores along with down time and reduced square footage related to remodeled/relocated stores. Comparable footwear net sales for the thirty-nine weeks ended November 27, 2010 increased 7.8% while comparable softgoods net sales increased 4.2% for the comparable period. The increase in comparable footwear net sales is attributable to a 6.3% increase in footwear average selling price as the Companys inventory aging remains low allowing the Company to sell more full priced products. The 7.3% comparable store net sales increase was driven by a 7.2% increase in average dollar per transaction and a 0.5% increase in store conversion, partially offset by a 1.0% decline in store traffic.
The 2.2% increase in gross profit, as a percentage of net sales, for the thirty-nine weeks ended November 27, 2010 as compared to the thirty-nine weeks ended November 28, 2009 was due to a 1.4% decrease in occupancy costs and a 0.8% increase in product margin. The 1.4% decrease in occupancy costs as a percentage of net sales is primarily the result of leveraging the 7.3% comparable store net sales increase and continuing to work with our landlords to negotiate mutually acceptable terms. The 0.8% increase in product margin is primarily attributable to selling more full priced product as a result of having low levels of aged inventory.
The $1.1 million increase in selling, general and administrative expenses for the thirty-nine weeks ended November 27, 2010 as compared to the thirty-nine weeks ended November 28, 2009 was primarily due to an increase in variable selling costs due to the 5.8% increase in net sales and higher incentive compensation costs, partially offset by a decrease in depreciation, repairs and maintenance, supplies and other areas due to targeted cost reductions and reduced store levels. The decrease in selling, general and administrative expenses as a percentage of net sales was primarily due to expense leveraging with the 7.3% increase in comparable store net sales as well as a continued focus on controlling expenses.
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