The Finish Line, Inc. saw net income for the second quarter ended August 26, 2006 decrease 47% to $9.9 million, or 21 cents per diluted share, from $18.9 million, or 38 cents per diluted share, for the same period last year.
Net sales decreased 0.9% to $338.6 million for Q2 compared to $341.6 million reported for Q2 LY. Comparable store net sales decreased 6.6% for Q2 as compared to the 1.9% decrease reported for Q2 LY.
YEAR-TO-DATE RESULTS:
Net income for the first half was $14.3 million, or 30 cents per diluted share, a decrease of 55% from net income of $31.6 million, or 63 cents per diluted share, for the first half of 2005.
Net sales decreased 0.8% to $627.7 million for YTD compared to $632.8 million for YTD LY. Comparable store net sales decreased 6.8% for YTD versus a 0.3% decrease reported for YTD LY.
Mr. Cohen stated, “Our diluted income per share for the second quarter of $.21 is at the high end of the range of $.19 – $.21 we announced in our August 24th release. Our sales performance during the Back-To-School selling season was below expectations and more promotional than the previous year, and we expect business to remain challenging during the second half of the fiscal year. While we are aggressively implementing initiatives to improve our performance in the short-term, we continue to be optimistic about Finish Line's long-term growth opportunities.”
Merchandise inventories on a consolidated basis were $322.7 million at August 26, 2006 compared to $280.0 million at Q2 LY. On a per square foot basis, Finish Line store merchandise inventories increased 6% compared to one year ago.
The company operated 672 Finish Line stores at August 26, 2006, an increase of 5% over the 639 stores operated one year ago. For the quarter, Finish Line opened 5 new stores, remodeled 6 existing stores and closed 2 stores with retail square footage increasing 4% to 3,761,000 at August 26, 2006 versus 3,605,000 at August 27, 2005.
The company opened 11 Man Alive stores during the quarter and as of the end of Q2 operated 76 stores totaling 245,000 square feet. The company opened 2 Paiva stores during the quarter and as of the end of Q2 operated 6 stores totaling 24,000 square feet.
The Finish Line, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands, except per share and store data)
Thirteen Thirteen Twenty-six Twenty-six
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
August 26, August 27, August 26, August 27,
2006 2005 2006 2005
---- ---- ---- ----
Net sales $338,635 $341,573 $627,681 $632,840
Cost of sales (including
occupancy expenses) 236,810 230,449 439,939 431,042
-------- -------- -------- --------
Gross profit 101,825 111,124 187,742 201,798
Selling, general, and
administrative expenses 85,973 81,428 165,599 152,254
-------- -------- -------- --------
Operating Income 15,852 29,696 22,143 49,544
Interest income (net) 150 512 885 1,061
-------- -------- -------- --------
Income before income taxes 16,002 30,208 23,028 50,605
Income taxes 6,081 11,328 8,751 18,977
-------- -------- -------- --------
Net income $9,921 $18,880 $14,277 $31,628
======== ======== ======== ========
Diluted weighted average
shares outstanding 47,612 49,854 48,119 49,878
======== ======== ======== ========
Diluted net income per share $0.21 $0.38 $0.30 $0.63
======== ======== ======== ========
Dividends declared per share $0.025 $0.025 $0.05 $0.05
======== ======== ======== ========
Number of stores open at end
of period: Finish Line 672 639
Man Alive 76 38
Paiva 6 --
