Based on the first quarter sales report issued last week, The Finish Line is upping its earnings guidance for Q1 and the balance of the year.
The athletic specialty retailer anticipates the gross profit percentage to improve over Q1 LY, “in spite of the ongoing promotional retail environment and the company’s clearance of goods to keep inventory fresh.” Product margins were lower than last year, due to the promotional environment.
Inventory is up 5% – 6% over last year on a per square foot basis and is described as “on plan”. Occupancy costs were leveraged positively by the sales increase.
FINL now expects diluted earnings per share for Q1 will range from 26 cents to 28 cents, compared to previous guidance of diluted EPS of 17 cents to 19 cents and 15 cents in the year-ago quarter.
Second quarter sales are now estimated to be $235 million, with comps up 7.0% and EPS in the 44 cents to 47 cents range. Sales for Q3 are seen at $170 million, driven by an 8.0% comp store increase. FINL sees a net loss per share in Q3 of 9 cents to 11 cents per share. Fourth quarter sales are projected at $262 million, with comps up 4.0% and EPS in the range of 57 cents to 59 cents.
The net net is that fiscal 04 net income is now expected in the $1.15 – $1.20 per share range, up from previous guidance of $.99 to $1.03 per share, on total projected sales of $875 million and an 8.0% increase in same-store sales.
In Q1, FINL opened 15 stores, remodeled 10 stores and closed two stores. They expect to open 55 new stores for the full year, upping its previous 50 store plan, while remodeling 20 stores and closing 5-10 stores.
>>> Dear diary, please remember Matt Serra and Phil Knight for the holidays…
