Finish Line Cuts FY18 Outlook As Q2 Profit Down, Misses View On Weak Comps

(RTTNews) - Athletic footwear and apparel retailer Finish Line, Inc. (FINL) trimmed its outlook for fiscal 2018 after reporting weak earnings and comparable sales in its second quarter. For the third quarter, the company sees wider loss and weak comps.

In pre-market activity on Nasdaq, shares were losing around 6.8 percent to $8.59.

For the third quarter ending November 25, the company expects adjusted loss per share to be in the range of $0.32 to $0.40, compared with an adjusted loss per share of $0.24 last year.

On average, 19 analysts polled by Thomson Reuters expect loss of $0.35 per share for the quarter. Analysts' estimates typically exclude special items.

The company expects Finish Line comparable sales to decrease 3% to 5% for the quarter.

For the fourth quarter ending March 3, a 14-week quarter, the company expects adjusted earnings per share to be in the range of $0.50 to $0.58 inclusive of the $0.06 per share contribution from the extra week, compared with earnings per share of $0.50 last year, a 13-week quarter.

The company expects Finish Line comparable sales to decrease 3% to 5%.

For the 53-week fiscal year ending March 3, 2018, Finish Line now expects adjusted earnings per share in the range of $0.50 to $0.60, sharply lower than previous outlook in the range of $1.12 to $1.23. The prior year 52-week adjusted earnings per share were $1.06.

The company said its outlook remains unchanged from the update given August 28 which is Finish Line comparable sales to decrease 3% to 5% versus its previous guidance for an increase in the low-single digit range.

Finish Line estimates that the additional week will contribute approximately $0.06 per share to fourth quarter and full year fiscal 2018 results.

In its second quarter, net income plunged to $2.84 million or $0.07 per share from last year's $22.08 million or $0.53 per share.

Consolidated net sales were $469.4 million, a decrease of 3.3% over the prior year period. Finish Line comparable store sales decreased 4.5%. Finish Line Macy's sales increased 5.6%.

Analysts estimated earnings of $0.12 per share on sales of $470.51 million.

Separately, Finish Line said its Board of Directors appointed Faisal Masud as a director of the Company effective September 19. Masud, Chief Technology Officer for Staples, Inc. (SPLS), will serve as a Class II director for a term expiring at Finish Line's 2018 annual meeting of shareholders.

He will serve on the Compensation Committee of the Board of Directors. With the appointment of Masud, the Board of Directors increases from 7 to 8 directors.