Alan H. Cohen, President and Chief Executive Officer of The Finish Line, reported earnings for the second quarter representing the thirteen weeks ended August 30, 2003.
Net sales increased 33% to $270.8 million for the quarter, compared to $204.3 million reported for the thirteen weeks last year ended August 31, 2002. Comparable store net sales increased 21% for Q2.
Net income for Q2 was $17.5 million, or $.73 per diluted share an increase of 93% versus net income of $9.1 million for Q2 LY, or $.37 per diluted share. Excluding the benefit from repositioning reversals in Q2 LY, net income would have been $.34 per diluted share. Therefore, Q2 earnings per diluted share of $.73 increased 115% versus comparable earnings of $.34 per diluted share for Q2 LY. Diluted weighted average shares outstanding were 24,037,000 for the thirteen weeks ended August 30, 2003, versus 24,896,000 shares outstanding for Q2 LY.
Year to date net sales increased 28% to $478.6 million for the twenty-six weeks ended August 30, 2003 compared to $374.9 million for the twenty-six weeks last year ended August 30, 2002. Comparable store net sales increased approximately 18% for YTD.
Net income for YTD was $24.1 million, or $1.01 per diluted share an increase of 88% versus net income for YTD LY of $12.8 million, or $.51 per diluted share. Excluding the benefit of repositioning reversals, the Company would have reported net income of $.48 per diluted share for YTD LY. Therefore, YTD earnings per diluted share of $1.01 increased 110% versus comparable earnings of $.48 per diluted share for YTD LY. Diluted weighted average shares outstanding were 23,857,000 for the twenty-six weeks ended August 30, 2003, versus 24,941,000 shares outstanding for YTD LY.
Mr. Cohen stated, “We are pleased to report a 93% increase in earnings for the second quarter of Fiscal 2004. The 21% gain in Q2 comparable store sales drove significant improvement in our financial performance as gross profit margin improved 220 basis points from Q2 LY, while SG&A expense also improved 180 basis points. Our strong sales performance in Q2 has continued through the first three weeks of September, and our inventory is positioned to support our anticipated sales growth in the third quarter.”
Merchandise inventories were $188.9 million at August 30, 2003 compared to $160.1 million at August 31, 2002. On a per square foot basis, merchandise inventories at the end of Q2 increased approximately 9% compared to one year ago.
The Company operated 510 stores at August 30, 2003, an increase of 11% over the 459 stores operated one year ago. Year-to-date, the Company has opened 36 new stores (of the planned 55-58 new stores), remodeled 16 existing stores and closed 3 stores. Total retail square footage increased 9% to 2,984,000 at August 30, 2003 versus 2,745,000 square feet at the end Q2 LY.
The Finish Line, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands, except per share and store data)
Thirteen Thirteen Twenty-six Twenty-six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
August 30, August 31, August 30, August 31,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net sales $270,789 $204,280 $478,594 $374,856
Cost of sales
(including
occupancy expenses) 184,379 143,634 331,473 265,632
---------- ----------- ----------- -----------
Gross profit 86,410 60,646 147,121 109,224
Selling, general,
and administrative
expenses 58,103 47,515 108,628 90,604
Repositioning charge
reversal -- (1,126) -- (1,126)
Interest income(net) 130 189 330 537
---------- ----------- ----------- ----------
Income before income
taxes 28,437 14,446 38,823 20,283
Income taxes 10,910 5,345 14,753 7,505
---------- ----------- ----------- ----------
Net income $17,527 $9,101 $24,070 $12,778
========== =========== =========== ==========
Diluted weighted
average shares
outstanding 24,037 24,896 23,857 24,941
========== =========== =========== ==========
Diluted net income
per share $0.73 $0.37 $1.01 $0.51
