The Finish Line to Post Q1 Loss on Heavier Promotions, Weak Apparel Business…

The Finish Line, Inc. reported a decline in comp store sales for the fiscal first quarter ended June 2, hurt by a very weak apparel business. Consolidated net sales dipped 0.2% to $288.3 million for the thirteen-week period, while total company same-store net sales decreased 3.9% for the quarter. Comps at the company’s Finish Line format were down 4.1%, while comps at the Man Alive business were up 0.6% for the period. The direct-to-consumer business was up in double-digits for the quarter.

At Finish Line, footwear comps were down less than one percent after a high-single-digit decline in Q1 last year, but the softgoods end of the business comped down more than 20% for the period. Management said they saw mid-single-digit declines in both women’s and men’s. They said they did not generate enough growth in the casual footwear categories to offset weakness in performance. Declining average selling prices were also cited as a reason for the sales decline, due no doubt in part to the shift in sales to casual and heavier promotions. ASP’s were down 4.1% for the quarter and down 8.1% in May alone. FINL said the May decline was exacerbated by higher sales in the canvas and sandals categories. The kid’s footwear business was a bright spot, delivering a double-digit gain for the month. The apparel decline was attributed to weakness in branded apparel, but management did see positive results with Under Armour and NCAA product. Promotions also cut into margins, which are expected to be down 180 basis points for the quarter.

The gains at Man Alive were said to be due to a double-digit increase in juniors apparel and a low-single-digit gain in men’s apparel, offset in part by a double-digit decrease in footwear.

FINL now expects to report a loss in the range of 9 cents to 11 cents per diluted share for Q1, compared to earnings of 9 cents per diluted share in the year-ago period.