The Finish Line, Inc. reported comparable store sales declined 9.9% in the second quarter ended Aug. 29 compared to a 4.9% increase last year. Net sales declined 11.4% to $298.7 million for the period compared to $337.0 million as a result of fewer stores and the comparable store sales decline.
Finish Line reported income from continuing operations of $11.7 million, or 21 cents per share, compared to income from continuing operations of $14.9 million, or 27 cents, in the second quarter last year. Diluted weighted average shares outstanding for the second quarter were 54.6 million versus 54.3 million for the same period a year ago.
Consolidated merchandise inventories were reduced 18% to $221.4 million as of August 29, 2009 compared to $269.9 million a year ago. Finish Line inventory declined 13.4% overall and 10.1% on a per-square-foot basis.
At quarter end, the company had no interest-bearing debt and $142.9 million in cash and cash equivalents, up from $65.0 million at the end of the second quarter a year ago.
“In the second quarter, we continued to manage the business conservatively by controlling costs and increasing efficiencies, but we also made and will continue to make appropriate investments in our business to drive sales and profitable growth,” said Finish Line Chief Executive Officer Glenn Lyon. “Our online business and cross-channel strategies are growing, and we are focused on building upon that growth by improving the customer experience wherever and whenever they shop with us. Overall, our focus at Finish Line is to sustain the health of our balance sheet, maintain our premium brand position, and within the realities of what remains a cautious consumer environment, position ourselves for future profit growth.”
Year-to-Date Results
For the 26 weeks ended August 29, 2009, Finish Line reported income from continuing operations of $13.5 million, or 24 cents per diluted share, versus income from continuing operations of $17.3 million, or 32 cents per diluted share for the same period a year ago.
Year-to-date comparable store sales declined 7.2% versus a 3.4% increase last year. Net sales declined 8.6% to $557.8 million, compared to $610.0 million a year ago.
As previously disclosed, the company exited the Man Alive business effective July 4, 2009. Therefore, all financial results of the Man Alive operations are included in discontinued operations for all periods presented.
The Finish Line, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share and store data)
Thirteen Thirteen Twenty-Six Twenty-Six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
August 29, August 30, August 29, August 30,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $298,733 $337,000 $557,829 $610,019
Cost of sales
(including
occupancy costs) 203,364 229,740 386,086 422,675
------- ------- ------- -------
Gross profit 95,369 107,260 171,743 187,344
Selling, general
and administrative
expenses 75,260 82,762 148,414 158,667
Store closing costs 1,381 250 1,612 250
Terminated merger-
related costs - 45 - 83
--- --- --- ---
Operating income 18,728 24,203 21,717 28,344
Interest income, net 108 243 212 498
--- --- --- ---
Income from
continuing
operations
before income
taxes 18,836 24,446 21,929 28,842
Income tax expense 7,088 9,535 8,422 11,589
----- ----- ----- ------
Income from
continuing
operations 11,748 14,911 13,507 17,253
Loss from
discontinued
operations, net
of income taxes (12,622) (1,817) (14,989) (3,291)
------- ------ ------- ------
Net (loss) income $(874) $13,094 $(1,482) $13,962
===== ======= ======= =======
Income (loss) per
diluted share:
Income from
continuing
operations $0.21 $0.27 $0.24 $0.32
Loss from
discontinued
operations (0.23) (0.03) (0.27) (0.06)
----- ----- ----- -----
Net (loss) income $(0.02) $0.24 $(0.03) $0.26
====== ===== ====== =====
Diluted weighted
average shares
outstanding 54,560 54,334 54,484 54,007
====== ====== ====== ======
Dividends declared
per share $0.030 $0.030 $0.060 $0.030
====== ====== ====== ======
Number of stores
open at end of
period:
Finish Line 681 697
Man Alive (sold in July 2009) - 94
--- ---
Total 681 791
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