The Finish Line fiscal third quarter sales declined 4.4% to $256.9 million for the thirteen-week period ending November 29, compared to $268.7 million in Q3 last year. Consolidated comps decreased 3.6%. By concept, comps dipped 3.3% at Finish Line and fell 6.8% at Man Alive. The retailer reported a loss from continuing operations of $8.8 million, or 16 cents a share, compared to a continuing loss of $13.8 million, or 29 cents, in the year-ago period.
Diluted weighted average shares outstanding were 53.9 million for Q3, a 14.2% increase versus 47.2 million for Q3 LY, which reflects the 6.5 million shares issued March 7, 2008 in connection with the previously announced settlement related to the terminated merger.
Merchandise inventories on a consolidated basis were $293.2 million at November 29 compared to $338.7 million at December 1, 2007. Consolidated merchandise inventories at the quarter's close decreased 12% per square foot compared to the same time a year ago. By concept, Finish Line inventories decreased 12% and Man Alive inventories decreased 5% compared to one year ago.
Glenn S. Lyon, CEO of the company, stated, “During the third quarter, we continued making progress on our strategic plan of controlling expenses, managing our inventory investments, and maintaining our position as the premium athletic specialty store. Additionally, in today's volatile and unprecedented retail marketplace, having a strong balance sheet is critical to success. Finish Line has no interest bearing debt and $55 million in cash and short-term investments, which gives us confidence that we can continue to succeed even during the toughest of economic times. Given these economic conditions, I am pleased that we have increased the non-GAAP earnings from continuing operations per diluted share for the year by $0.17 over last year through three quarters.”
Net sales increased 0.4% to $898.1 million for the thirty-nine weeks ended November 29 from $894.4 million a year ago. Comps increased 1.1% YTD, with a 1.4% gain at Finish Line offsetting a 4.2% decline at Man Alive.
Diluted weighted average shares outstanding were 54.5 million YTD, a 15.5% increase versus 47.2 million YTD LY, which reflects the 6.5 million shares issued March 7, 2008 in connection with the previously announced settlement.
The company currently operates 698 Finish Line stores in 47 states and online and 93 Man Alive stores in 19 states.
The Finish Line, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share and store data)
Thirteen Thirteen Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
November 29, December 1, November 29, December 1,
2008 2007 2008 2007
———— ———– ———— ———–
Net sales $256,864 $268,699 $898,115 $894,409
Cost of sales
(including
occupancy costs) 190,280 198,803 637,692 646,163
———— ———– ———— ———–
Gross profit 66,584 69,896 260,423 248,246
Selling, general
and administrative
expenses 81,060 83,261 251,709 253,372
Terminated merger
-related costs 23 9,658 106 9,883
———— ———– ———— ———–
Operating (loss)
income (14,499) (23,023) 8,608 (15,009)
Interest income,
net 194 223 693 923
———— ———– ———— ———–
(Loss) income
from continuing
operations before
income taxes (14,305) (22,800) 9,301 (14,086)
Income tax (benefit)
expense (5,462) (9,035) 4,059 (4,626)
———— ———– ———— ———–
(Loss) income from
continuing operations (8,843) (13,765) 5,242 (9,460)
———— ———– ———— ———–
Loss from discontinued
operations, net of
income tax benefit – (2,189) (123) (12,163)
———— ———– ———— ———–
Net (loss) income $(8,843) $(15,954) $5,119 $(21,623)
============ =========== ============= ===========
(Loss) income per
diluted share:
(Loss) income from
continuing
operations $(0.16) $(0.29) $0.10 $(0.20)
Loss from
discontinued
operations – (0.05) – (0.26)
———— ———– ———— ———–
Net (loss) income $(0.16) $(0.34) $0.10 $(0.46)
============ =========== ============= ===========
Number of stores
open at end of period:
Finish Line 699 701
Man Alive 93 96
———— ———–
Total 792 797
============ ===========
