The Finish Line, Inc. issued a press release late Thursday in response to comments made by Foot Locker chairman and CEO Matt Serra on a conference call with analysts following FL's Q1 earnings release. Finish Line said they issued the statement due to “misinformation that was disseminated earlier today by one of its competitors”.

In response to an analyst's question about the current level of promotions in the marketplace, Mr. Serra responded that he had seen a “somewhat more aggressive posture, particularly from our competitor in Indianapolis”, apparently referrring to current clearance sales. He went on to say that, “Obviously they must have some inventory problems.”

While Serra did not name The Finish Line directly, most industry watchers doubted he was referring to Galyan's or Hat World/Lids.

FINL shares were down more than 4.5% in midday trading following the comments by Serra, but bounced back a bit to close at $31.18, off 0.9% for the day.

The following statement was issued by FINL after the market closed:

“Finish Line is currently running a previously planned, yearly liquidation sale on aged inventory in all of the Company's 551 stores. The goods included in this sale are older footwear items approaching one year in age. As has been done in prior years, this sale is part of the Company's normal course of business to keep inventory fresh rather than a reaction to current inventory levels. All strategic indicators reflect a positive inventory position as the Company completes its first quarter ending May 29, 2004. These indicators include inventory level compared to sales trends, product margins, level of aged inventory and average selling price.

Finish Line's current level of inventory is in line with the Company's previous plan. Quarter to date, the Company's increase in sales is outpacing its increase in inventory. Product margins during the current quarter to date have increased over the first quarter last year, and the percentage of aged inventory has decreased versus the same period a year ago. Quarter to date, the average selling price of footwear has continued to climb versus a year ago, increasing more than $2.50 per pair.

Since Finish Line still has nine days left in the current quarter, further discussion regarding first quarter results will be included in the Company's First Quarter Sales Release scheduled to be released on June 3, 2004. While it is Finish Line's policy generally not to comment on current business conditions prior to a quarter's end, when it believes it is in the interests of Finish Line's stockholders, as under the current circumstances, the Company will promptly correct misinformation placed in the marketplace by others about the Company's current operations and inventory.”