The Finish Line, Inc. reported net sales of $361.4 million for the thirteen weeks ended February 26, 2005, an increase of 18% over net sales of $305.3 million for Q4 last year. Comparable store net sales for Q4 increased 8% on top of a 19% increase reported for the comparable thirteen-week period last year. Effective with the beginning of Fiscal 2005, the Company has included internet sales from www.Finishline.com in the comparable sales calculation. This change had the effect of increasing Q4 and year-to-date comparable sales 1%.
On a year to date basis, net sales were $1.17 billion, an increase of 18% over net sales of $985.9 million reported for the fifty-two week period last year. Full year comparable store net sales increased 9% on top of a 20% increase reported for the comparable fifty-two weeks last year.
The Company completed the acquisition of The Hang Up Shoppes, which does business under the trade name Man Alive, effective on the close of business January 29, 2005. The net sales reported above for Q4 and year-to-date include one month of net sales for Man Alive, a wholly owned subsidiary of The Finish Line, Inc. However, the net sales of Man Alive are not included in the comparable store net sales for either period reported.
Chairman and CEO Alan H. Cohen stated: “We are extremely pleased to end our fiscal year with another strong quarter. During Q4, we launched several marquee shoes and new product technologies from our brand partners. These product initiatives were well-received by our customers and give us positive momentum as we enter into a new fiscal year.
“The 9% comp increase YTD, on top of a 20% gain YTD LY, indicates that we continued to increase our market share in athletic specialty retail. Additionally, we achieved an important milestone for the first time in our 29-year history, surpassing one billion dollars in net sales. This achievement is a tribute to the dedication and hard work of our 12,000+ associates across the country along with our Board of Directors and brand partners.”
Due to sales exceeding plan and the leveraging of SG&A costs versus Q4 LY, the Company now anticipates that diluted income per share for the 4th quarter will range from $.54 to $.56 as compared to previous guidance of diluted income per share of $.52 to $.54. For Q4 LY the Company reported diluted income per share of $.43. Correspondingly, full Fiscal 2005 EPS guidance is being increased from a previous range of $1.20 to $1.22 to a new range of $1.22 to $1.24.
Like many companies in the retail industry, the Company is reviewing its accounting for leases in connection with recent views expressed by the Office of the Chief Accountant of the Securities and Exchange Commission on February 7, 2005 regarding certain operating lease and leasehold improvement accounting issues. The earnings guidance discussed above does not give effect to any potential adjustments pending the Companys review of its lease-related accounting. It is currently anticipated that potential adjustments, if any, which the Company may make to its prior period and current period financial statements regarding these matters will have no impact on cash flows, net sales or comparable store sales. The Company expects to report earnings for Q4 on Wednesday, March 23rd, after the market closes followed by a live conference call on Thursday morning, March 24th at 8:30 am ET.
During Q4, the Company opened six new Finish Line stores and remodeled one existing store. The Company did not open or remodel any Man Alive stores during the four week period following the closing of this transaction. For the 2005 Fiscal year, the Company opened a total of 71 new Finish Line stores, remodeled 27 stores and closed four stores. As of February 26, 2005, the Company operated 598 Finish Line stores compared to 531 at February 28, 2004 an increase of 13%. In addition, Finish Line store square footage increased 11% to 3,414,000 square feet compared to 3,081,000 square feet at February 28, 2004. As of February 26, 2005, Man Alive operated 37 stores totaling 105,000 square feet.
