As reported here in SEW 0323, The Finish Line saw fiscal Q1 comp stores sales jump 14% on top of the 3% increase in the year-ago period. In a conference call with analysts following the first quarter financials release, it appears that the mid-teens trend is continuing for the new mall darling after CEO Alan Cohen and CFO Steve Schneider intimated that June has “kept pace” with the Q1 results. June comps rose 8.0% LY.

As for Q1 this year, March comps rose 12%, April jumped 16%, and May showed a 15% gain.

Explaining FINL’s success, Cohen said that they are “becoming so different from our competitors” in the mall and the stores are “more distinguished” than ever before. Cohen said things had “dramatically changed” in the mall since the Nike re-distribution. He sees tremendous opportunity in the back half of the year when he said 50% of the product FINL carries “will not be seen at our key competitor”.

They feel the product mix may insulate them from the promotional environment of a year ago. Cohen said that although the competition is running fewer BOGOs, they are replacing them with other aggressive events, such as 2/$89. Last year July comps were up just 1.0%, while August dipped 4%, Sept. and Oct. both slipped 3%, and Nov. fell 9% on a same-store basis.

While the key statement product from Nike drove much of the sales, it also created traffic that benefited other brands. Cohen mentioned both K-Swiss and Reebok as other key contributors as well as the growth in the women’s business and licensed apparel. Cohen said they are “blowing through” new licensed product, primarily in the retro licensed segment. He also mentioned nice gains in women’s licensed apparel and said the kid’s business is “coming back too”.

FINL sees apparel growing to 22% or 23% of the business this year, up 200-300 basis points from the share it held last year. They don’t see the business getting back to the historically high figures of 35% to 36% because of the dramatic growth in footwear, but do see it getting to 27% to 30% of sales in the next few years.

Licensed is 60% of apparel sales, with Private Label and Branded each delivering 20%. In footwear, Women’s is now 20% of the total and Men’s is now 66%, down from 70% last year.

Gross margins were positively impacted by lower occupancy costs as a percentage of sales, with 170 basis points improvement seen in that line offset a bit from a 100 basis point decline in product margins due to clearance activity.

Some issue was made on the call about inventories that were up 12.5% at the end of the quarter, or up just 6.0% on a comp basis. Footwear was up 5.0% and apparel was up 7.0%. With June comps up in the mid-teens, it appears the inventory will be sorely needed.