The Finish Line, Inc. revised sales and earnings guidance for its second quarter ending August 26, 2006. The Company expects to report consolidated net sales for Q2 in the range of $335 million to $339 million, compared to $341.6 million reported for the second quarter ended August 27, 2005. The Company expects comparable store sales results for Q2 to be in the range of -6% to -8%. This compares to previous guidance for Q2 of consolidated net sales of $352 – $362 million and comparable store sales of -3% to -6%.
The Company is revising Q2 earnings guidance due to the decrease in sales and pressure on product margins, as well as negative leverage on occupancy costs and selling, general and administrative expenses. The Company’s new guidance for Q2 diluted earnings per share is a range of 19 cents to 21 cents compared to previous guidance of $.25 to $.28 per diluted share.
Alan H. Cohen, Chairman and CEO stated, “For the second quarter we have continued to experience significant weakness in women’s performance running which was down double digits on a comparable store basis. The softgoods business also slowed in Q2 with comparable sales down double digits as well. Comparable sales for the quarter decreased 8% in June followed by an 11% decrease in July. August comparable sales are expected to be negative 3-5%. We currently anticipate that we will report inventory that is up 6-8% per square foot for the Finish Line stores at the end of Q2 compared to Q2LY.”
Based on uncertainty in our current business environment, the Company has changed its policy with regard to providing future sales and earnings guidance, and will no longer provide quarterly or yearly sales and earnings per share guidance. Through press releases and regularly scheduled conference calls available to the public, the Company will continue to provide investors with information and insight into strategic initiatives, growth and value drivers, and trend and industry data critical to understanding the Company’s businesses and operating environment.
The Company has experienced, and expects to continue to experience, significant variability in net sales and comparable store net sales from quarter to quarter. Therefore, the results of the periods presented herein are not necessarily indicative of the results to be expected for any other future period or year.
