For the three months ended May 30, Finish Line reported a net loss of $600,000, or 1 cent a diluted share, compared with a profit of $900,000, or 2 cents, in the first quarter last year. Sales for the quarter decreased by 7 percent to $267.2 million, from $287.9 million last year. Analysts had expected a 1 cent earnings-per-share increase on sales of $273.2 million.
Net sales at the Finish Line chain were down 5 percent to $259.1 million, while comparable-store sales slipped by 3.9 percent for the quarter. At Man Alive, revenues dropped 46 percent to $8.1 million, and comps fell 39.1 percent.
Earlier in the week, Finish Line announced that it exited the urban-inspired Man Alive business in an acquisition deal with Jimmy Khezrie, owner of the Jimmy Jazz chain. The deal, which includes payment of $7 million to Khezrie’s company, Man Alive Acquisitions LLC, is expected to close in July.
Ed Wilhelm, Finish Line’s CFO, told Footwear News that he was pleased with the Man Alive transaction. “Man Alive was a money-losing business and financial drag. Now we can focus all our resources on our core Finish Line business,” he said, pointing to opportunities such as Internet sales, direct marketing and customer loyalty program. “We think there’s a lot more potential to improve that business.”