The Finish Line, Inc. reported sales rose 8.7% in its third quarter ended Nov. 27, to $260.9 million from $240.1 million a year ago. Comparable store net sales increased 10.1% compared to an increase of 1.7% a year ago. Earnings would have been up significantly excluding a year-ago tax benefit.

Finish Line reported third quarter income from continuing operations of $4.1 million, or $0.08 per diluted share compared to income from continuing operations of $6.5 million or $0.12 per diluted share a year ago, a figure that included a one-time $6.5 million tax benefit Finish Line recorded in the third quarter of last year. Without the tax benefit, third quarter non-GAAP income from continuing operations last year was $16,000 or $0.00 (flat) per diluted share.

Merchandise inventories increased by 10.4% to $262.2 million at the end of the quarter compared to $237.5 million a year ago. On a per-square-foot basis, inventories were up 13.0%.  For the same period a year ago, inventory per square foot declined by 11.0%.

At quarter end, the company had no interest-bearing debt and $222.0 million in cash and cash equivalents, up from $149.2 million at the end of the third quarter a year ago.

“Staying focused on the strategic plan we developed last year has again helped Finish Line deliver strong results,” said Chairman and Chief Executive Officer Glenn Lyon. “We continue to exceed our internal performance targets, yet there is more growth to come within our existing business. We believe that we can achieve annual double digit operating margins in the future by continuing to drive the top line in our stores and by accelerating growth in e-commerce, which will become an increasingly more significant factor in our business moving forward.”

Year-to-Date Results

Net sales increased 5.8% to $844.4 million, compared to $797.9 million for the same period a year ago. Year-to-date comparable store net sales increased 7.3% versus a 4.7% decrease last year.

For the 39 weeks ended November 27, 2010, Finish Line reported income from continuing operations of $34.6 million, or $0.63 per diluted share. This compares to income from continuing operations of $20.0 million, or $0.36 per diluted share for the same period a year ago including the one-time $6.5 million tax benefit. Without the tax benefit, the year-to-date non-GAAP income from continuing operations was $13.5 million or $0.24 per diluted share. The $0.63 per diluted share represents a 163% increase over the prior year non-GAAP $0.24 per diluted share.

December Sales Update

Comparable store net sales, on a month-to-date basis for the period of November 28 through December 19, increased 4.5% on top of a 4.9% increase for the same period one year ago.

 The Finish Line, Inc. 

Consolidated Statements of Income (Unaudited)

(In thousands, except per share and store data)













Thirteen


Thirteen


Thirty-Nine


Thirty-Nine



Weeks Ended


Weeks Ended


Weeks Ended


Weeks Ended



November 27,


November 28,


November 27,


November 28,



2010


2009


2010


2009











Net sales

$      260,935


$      240,056


$      844,403


$      797,885


Cost of sales (including occupancy costs)

179,056


169,144


568,785


555,230


Gross profit

81,879


70,912


275,618


242,655











Selling, general and administrative expenses

75,278


70,351


219,835


218,765


Store closing costs

87


535


87


2,147


Operating income

6,514


26


55,696


21,743











Interest income, net

151


66


370


278


Income from continuing operations before income taxes

6,665


92


56,066


22,021











Income tax expense (benefit)

2,531


(6,439)


21,459


1,983


Income from continuing operations

4,134


6,531


34,607


20,038











(Loss) income from discontinued operations, net of income taxes

(12)


62


(25)


(14,927)


Net income

$          4,122


$          6,593


$        34,582


$          5,111











Income (loss) per diluted share:









 Income from continuing operations

$            0.08


$            0.12


$            0.63


$            0.36


 Loss from discontinued operations




(0.27)


 Net income

$            0.08


$            0.12


$            0.63


$            0.09





About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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