Finish Line Q2 Sales Up, But Income, Comps Down

The Finish Line reported net income for the second quarter ended August 27, 2005 was $18.9 million (38 cents per diluted share) a decrease of 8% versus net income of $20.5 million (42 cents per diluted share) for the same quarter last year. Net sales increased 9% to $341.6 million for Q2 compared to $312.2 million reported for Q2 LY. Comparable store net sales decreased 2% as compared to the 6% increase reported for the second quarter of last year.

Net income for the twenty-six weeks ended August 27, 2005 was $31.6 million (63 cents per diluted share) an increase of 3% versus net income of $30.8 million (63 cents per diluted share) for the twenty-six weeks last year ended August 28, 2004. Diluted weighted average shares outstanding were 49,878,000 for YTD versus 49,273,000 shares outstanding for YTD LY.

Net sales increased 11% to $632.8 million for YTD compared to $570.1 million for YTD LY. Comparable store net sales were flat for YTD versus a 10% increase reported for YTD LY.

Mr. Cohen stated, “Our diluted income per share of 38 cents is within the range of 37 cents – 39 cents we announced in our August 30th release. Our sales performance during the Back-To-School selling season was below expectations and promotional, and we expect business to remain challenging during the second half of the fiscal year. This does not change our long term plans to grow market share and sales, improve our operating efficiencies and grow earnings for our shareholders.”

Merchandise inventories on a consolidated basis (including Man Alive) were $280.0 million at August 27, 2005. Finish Line store merchandise inventories were $273.6 million compared to $241.4 million at August 28, 2004. On a per square foot basis, Finish Line store merchandise inventories increased approximately 2% compared to one year ago.

The company operated 639 Finish Line stores at August 27, 2005, an increase of 13% over the 564 stores operated one year ago. For the quarter, Finish Line opened 16 new stores, remodeled 7 existing stores and closed 2 stores with retail square footage increasing 11% to 3,605,000 at August 27, 2005 versus 3,247,000 at August 28, 2004. The company did not open any Man Alive stores during the quarter and operates 38 stores totaling 107,000 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 27, August 28, August 27, August 28,
                                      2005       2004       2005       2004
                                  ----------- ---------- ---------- ----------
                                             As Restated           As Restated

     Net sales                    $341,573   $312,162   $632,840   $570,128
     Cost of sales (including
      occupancy expenses)          230,449    208,234    431,042    386,682
                                 ---------  ---------- ----------  ---------
     Gross profit                  111,124    103,928    201,798    183,446

     Selling, general, and
      administrative expenses       81,428     71,163    152,254    134,143
                                 ---------  ---------- ----------  ---------
     Operating Income               29,696     32,765     49,544     49,303

     Interest income (net)             512        232      1,061        458
                                 ---------  ---------- ----------  ---------
     Income before income taxes     30,208     32,997     50,605     49,761
     Income taxes                   11,328     12,542     18,977     18,913
                                 ---------  ---------- ----------  ---------
     Net income                    $18,880    $20,455    $31,628    $30,848
                                 =========  ========== ==========  =========
     Diluted weighted average
      shares outstanding            49,854     49,226     49,878     49,273
                                 =========  ========== ==========  =========
     Diluted net income per share    $0.38      $0.42      $0.63      $0.63
                                 =========  ========== ==========  =========

     Dividends declared
      per share                     $0.025     $0.025      $0.05     $0.025