Finish Line delivers higher profit in Q3
The Finish Line Inc. reported results for the third quarter fiscal 2012, representing the 13-week period ended November 26, 2011.
Third Quarter Results
Consolidated net sales, inclusive of Finish Line and The Running Company, increased 8.1% to $282.0 million compared to $260.9 million a year ago. Finish Line comparable store sales increased 7.7% on top of an increase of 10.1% for the same period a year ago. Digital sales, which are included in the comparable store sales results, were up 60.8% in the third quarter.
The company reported consolidated third quarter net income of $5.5 million, or $0.11 per diluted share, compared to net income of $4.1 million, or $0.08 per diluted share, a year ago. This represents an increase in earnings per share of 37.5%. Operating margin increased 20 basis points to 2.7% of sales this year from 2.5% of sales one year ago.
Consolidated merchandise inventories increased 7.0% to $280.4 million at the end of the quarter compared to $262.2 million a year ago. For Finish Line, merchandise inventories increased by 5.5%.
At quarter-end, the company had no interest-bearing debt and $216.6 million in cash and cash equivalents, compared to $222.0 million at the end of the third quarter a year ago.
For the 39 weeks ended November 26, 2011, consolidated net sales increased 8.1% to $913.0 million compared to $844.4 million for the same period a year ago. Finish Line year-to-date comparable store sales increased 8.5% on top of a 7.3% increase last year. Digital sales, on a year-to-date basis, were up 58.7% over the prior year.
The company reported consolidated net income of $42.9 million, or $0.80 per diluted share, which is a 27.0% increase in earnings per share over the same period a year ago, when net income was $34.6 million, or $0.63 per diluted share.
Year-to-date, the company has repurchased 2.6 million shares of its outstanding common stock, totaling $54.5 million with 4.1 million shares remaining on its current 5-millionshare repurchase program.
December Sales Update
Finish Line comparable store sales on a month-to-date basis for the period of November 27 through December 18, 2011 increased 7.0% on top of a 4.5% increase for the same period a year ago.
“Our nearly 8% comp increase and EPS gain of more than 37% in the third quarter was another strong performance for our company,” said Chairman and Chief Executive Officer Glenn Lyon. “It is the interplay of social media and technologies such as mobile along with digital and bricks and mortar channels that is the sweet spot for Finish Line.
“Our strategic plan has led us to develop a strong presence on all of these fronts while working to keep our brand relevant everywhere. We continue to invest with purpose in technology, marketing and digital to drive the Finish Line brand business while also supporting a multi-divisional growthstrategy. We are focused on executing this plan while also moving with speed and innovation to take advantage of the right opportunities to grow our business and drive shareholder value.”
The Finish Line, Inc. is a premium retailer of athletic shoes, apparel and accessories. Headquartered in Indianapolis, the company has two retail divisions – Finish Line, which operates 646 Finish Line brand stores in malls across the United States, and the Running Specialty Group, which operates 19 specialty running shops in seven states and the District of Columbia under The Running Company banner.
The Finish Line Inc