Finish Line Inc. is riding a new wave of momentum.
The Indianapolis-based specialty athletic retailer announced second quarter results before the market open Sept. 23 that were — for the third consecutive quarter — better than expected.
Revenues gained more than 5 percent year-over-year, to $509.4 million, topping forecasts for revenues of $494 million. Comparable store sales also advanced 5.1 percent, trumping estimates.
Last year, the retailer’s margins were hit by a significant supply chain disruption, but newly minted CEO Sam Sato said the company has now stabilized that area of the business.
“The combination of top-line growth and disciplined expense management allowed us to partially offset the planned gross margin pressure from our successful inventory reduction actions and deliver earnings in-line with expectations,” Sato said in a release. “With our enhanced supply chain now operating efficiently, our focus shifts to streamlining our organizational structure to optimize productivity, adapt more quickly to market changes and better serve our customers.”
Net income slipped moderately year-over-year, to $22.1 million, or 53 cents per diluted share, from $25.9 million, or 57 cents per diluted share in the comparable period. Those results were in line with Wall Street’s forecasts.
Finish Line also announced that its board of directors approved an updated timetable for Glenn Lyon’s transition to non-executive chairman, effective Sept. 23.
“Throughout our multiyear succession plan, Glenn and Sam worked diligently to develop a seamless and effective transition plan leading us to today,” said Bill Carmichael, lead director of Finish Line’s board, in a release. “With their continued collaboration and a fully immersed leadership team focused on Finish Line’s growth and profitability, we reached this transition quicker than originally anticipated.”
Inventories were up 1.6 percent year-over-year at the end of the quarter.
The company maintained its full-year outlook.