Strength in footwear — particularly basketball and running — helped Finish Line Inc. finish its fiscal year on a strong note.
Finish Line Inc. said Friday that it had a smaller fourth-quarter loss than expected, due partially to its decision to terminate its proposed acquisition of Genesco Inc. last year. The Indianapolis-based athletic goods company narrowed its net loss to $1.4 million, or 3 cents a diluted share, in the period ended Feb. 28, from $39.2 million, or 83 cents a share, a year earlier, when costs from a failed merger with Nashville, Tenn.-based Genesco weighed down results.
Excluding impairment and merger-related charges and other items, income from continuing operations was $19.6 million, or 36 cents a share, 4 cents ahead of the analyst consensus estimate carried by Yahoo Finance but below the 45 cents reported in the prior-year quarter. Revenues slid 4.9 percent, to $364.1 million from $382.8 million, and sales declined 3.9 percent on a same-store basis.
Shares of Finish Line spiked 33 cents, or 5.2 percent, to $6.69 following Friday’s earnings report.
During a conference call on Friday, Finish Line CEO Glenn Lyon said the retailer has been cutting its inventory and costs amid the economic downturn and tough retail environment.
“Our management team is revisiting every contract, working with every department and leaving no stone unturned when it comes to searching for cost savings opportunities that will help enhance the financial performance of our company,” Lyon said. Avoiding excessive promotional activity and putting emphasis instead on value product, he said, would be a priority. “We are a premium retailer, we’re not going to promote and give up profitability.”
For the year, the company registered net income of $3.8 million, or 7 cents a share, versus a net loss of $60.8 million, or $1.29 a share, last year. Sales declined 1.2 percent to $1.26 billion from $1.28 billion as same-store sales dropped 0.4 percent.
Lyon said footwear overall performed well in 2008: comps were up 3 percent for the year, led by strength in Brand Jordan, Nike, Puma, Under Armour and Pastry. Gains in basketball were led by Jordan and Lebron James, while women’s running was also strong, led by Asics, Brooks and Mizuno.
Describing the company as “cautiously optimistic about the trends we have been seeing since the beginning of February,” Lyon said that while the retailer expected mall traffic to continue to be down, footwear — which made up 86 percent of the company’s sales in 2008 — would resonate with consumers.
“While consumers are avoiding luxury items, they still consider sneakers and athletic wear an affordable premium purchase, which is a great fit for our product offering,” Lyon said. “In general, shoe retailers have done better than other segments of retail and we’re doing better than some of our peers.”