Finish Line 4Q earnings run into trouble
Athletic goods retailer Finish Line was not a first-place winner in the fourth quarter.
The athletic shoe and clothing chain is at the unfortunate nexus of two trends that are hurting its bottom line -- decreasing mall traffic and an ailing sporting goods industry.
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The company lost $9.5 million, or 23 cents a share, in its fourth quarter ending Feb. 25, versus a profit of $4 million, or 9 cents a share, a year earlier, it said Friday. Its consolidated net sales totaled $557.5 million, down 0.4% from the same period the prior year.
During that stretch, Finish Line comparable sales fell 4.5%, while Finish Line Macy’s sales increased 35%. It closed seven standalone stores and 18 branded shops in Macy's.
The market wasn't pleased with the news, and sent its stock price tumbling 18 percent, down $2.87 to $13.19 a share as of 12:25 p.m.
"They were doing well until they hit their fourth quarter, until they hit some strong headwinds," said James Dion of the retail consulting firm Dionco Inc. "Like any retailer, they overextended themselves in retail space."
He also pointed out that the company ran into some trouble with styles.
"There is no hot shoe out there right now that every kid and person in America must have," Dion said. "They rationalized their inventory. They took some heavy markdowns. They bit the bullet."
On Tuesday, Nike reported an increase in net income for its third-quarter, but was frank about the challenges it faced, including the closing of stores that sell its products, increasing discounts and inroads made by competitors as it works to unveil innovative products.
Among the sporting goods casualties are MC Sports, Sports Authority and Eastern Outfitters, as online retailers and specialty stores eat away at this segment of the retail marketplace.
Finish Line has an estimated 950 Finish Line branded locations, mostly in American U.S. malls, and shops inside Macy’s department stores, according to the company.
Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer