Indianapolis-based Finish Line Inc. suffered from slowing demand for basketball product during its second quarter and missed analyst expectations. The company’s shares fell 10 percent in before-market trading.
The company reported net income of $2.2 million, or 54 cents per diluted share, for the period ended Aug. 30. It was a 1.3 percent decrease over second-quarter 2013, when net income was $26.5 million, or 54 cents a share. Analysts had predicted EPS of 60 cents.
Revenue rose 7.1 percent during the recent quarter to $466.9 million, from $436 million in the year-ago quarter. Analysts had predicted $478.8 million in revenue.
Comparable-store sales for footwear improved 1.5 percent during the quarter. Breaking it out by category, the firm reported that children’s footwear comps grew, while men’s and women’s remained flat.
Finish Line Chairman and CEO Glenn Lyon said in an earnings call with analysts, “While I’m not pleased with our second-quarter results, we remained focused on the longer-term opportunity we’re creating for this business. Our first-half performance is on track toward achieving our full-year guidance, and we will continue to execute well on the strategic initiatives that will deliver our five-year financial goals.”
The company cited softness in basketball as one of the largest challenges facing the business during the quarter. New releases, particularly from the Jordan brand, failed to resonate with shoppers. The running category remained a bright spot, though, with better comp sales and a good balance of styles, executives said in a conference call.
Based on the quarterly results, Finish Line reiterated its full-year expectations for comp-store sales to be up in the mid-single digits and for EPS to be in the high single- to low double-digit range.