Athletic retailer Finish Line Inc. (FINL, Financial) reported fourth-quarter financial results, which missed on revenue and same-store sales despite having the luxury of the all-important holiday shopping season. The company’s earnings per share were in line with analysts'Â expectations, though.
Bird’s-eye view
The company’s EPS for the quarter was 59 cents, which represents a 9-cent increase when compared with the same period last year. Quarterly revenue was $561.30 million primarily driven by an 8.5% increase in Finish Line Macy's sales. Comps during the same period plummeted 7.9% year over year. Finish Line’s CEO Sam Sato said:
“While we anticipated that our business would be under pressure during the fourth quarter due to a difficult selling environment for athletic footwear, sales ended up being down more than we forecasted.” He further added: “Despite the top-line headwinds, we worked hard on tightly controlling costs and managing inventories to deliver adjusted earnings per share for the fourth-quarter at the high-end of our most recent guidance range of 58 to 59 cents.”
Finish Line reported quarterly net income of $16.34 million, which was better than the net loss of $9.47 million reported in the year-ago quarter. Company’s operating income during the quarter came in at $11.41 million that was less than what was reported during the same quarter of previous year ($20.32 million).
At the end of the quarter, the company had consolidated merchandise inventories of $321.7 million. The company had cash and cash equivalents of $93.4 million at the end of the same period while it had no interest-bearing debts. The company did not buy back its shares during the fourth quarter.
For the full year, the company posted a profit of $14.4 million or 35 cents per share, which was up from a loss of $18.2 million loss in 2017. Comps for the whole year plunged 3.9% while the same at Macy’s locations soared 7.5%.
JD Sports look to acquire Finish Line
JD Sports (JD, Financial), the British retailer has agreed to pay $558 million to purchase Finish Line. This acquisition would mark JD Sport’s entry into the U.S. market. The British retailer already has business in South Korea, Spain and France. The deal won’t be finalized anytime before June as the contract of merger requires approval the board of directors of both the companies.
Disclosure: I do not hold any position in the stocks mentioned in this article.
