A week ago, The Finish Line, Inc. warned the market that business had slowed to a point that they felt compelled to issue a sales and earnings downgrade for the year (SEW_0635). They had also announced they would no longer issue quarterly or annual guidance going forward in an effort to give themselves more room to maneuver in a changing market.

FINL last week reported net sales for the fiscal second quarter ended August 26, posting a 0.9% decrease to $338.6 million for the period, compared to $341.6 million for the same quarter last year. Total company comparable store sales declined 6.6% for the quarter, with Finish Line comps decreasing 6.6% and Man Alive comps dipping 4.8% compared to Q2 last year.

If there was any good news during the second quarter it was the fact that the declines in comp sales moderated a great deal in the month of August as the footwear comp decline narrowed to less than one percent from the mid- to high-singles declines in the earlier part of the quarter. However, the same can’t be said for the apparel business, which hovered in the negative mid-teens territory in the last two months of the quarter after posting a 12.1% comp sales decline in June. The declines come on top of a 2% comp store sales decline in Q2 last year which featured flat footwear comps in July and August. Average selling prices were flat for the quarter this year.

Management said the primary reason for the comp decline in footwear for the quarter was a double-digit decline in the women’s category and a high-singles decrease in the kid’s business. They said the women’s business was hurt most by weakness in the performance footwear categories, while the kid’s decline was attributed to a softer girl’s business. The men’s business did have a “slightly negative” comp for the quarter, but moved into positive territory in August, driven by a stronger men’s casual business. FINL pointed to continued energy from Puma, Converse, and Asics, as well as the addition of Skechers, Heelys, and other “lifestyle footwear,” as key growth drivers for Q2.

Private label, which was the only growth category for apparel, continues to grow as a percentage of the total segment. Private label represented almost 45% of apparel sales in Q2, while branded delivered 35% of sales and licensed contributed 20% to the total.

The Man Alive stores saw declines in both the men’s and junior’s apparel business, which comped against strong woven and novelty t-shirt trends from last year. The total Man Alive nameplate saw a 1.3% comp sales decline in August after posting comp declines in the 6% to 7% range in the earlier part of the quarter. Footwear posted double-digit sales growth in Q2.


>>> Adding new non-performance brands and silhouettes will be critical for the near-term health in the mall. While the women’s performance business is down, much of the gains there over the last few years came from the fashion influence of Shox, not from gains in for-use performance sales as we see at running specialty…

The Finish Line Fiscal Second Quarter
Comparable Store Sales Results
Category JUN JUL AUG QTR
Footwear -6.80% -9.60% -0.70% -5.10%
Apparel/Access. -12.10% -15.20% -14.50% -13.90%
Total Finish Line -7.80% -10.60% -2.90% -6.60%
Total Man Alive -6.30% -6.90% -1.30% -4.80%