Finish Line Posts Loss In Q3 Amid Supply Chain Disruption

(RTTNews) - Athletic shoes and apparel retailer Finish Line, Inc. (FINL) Thursday said its third-quarter net loss was $21.84 million, compared to earnings of $2.5 million last year. Loss per share was $0.49, while it was earnings per share of $0.05 last year.

Adjusted loss per share was $0.49, while it totaled $0.02 per share last year. On average, 22 analysts polled by Thomson Reuters expected loss per share of $0.04 for the quarter. Analysts' estimates typically exclude special items.

Consolidated net sales fell 3.5 percent to $382.1 million from $395.83 million. Finish Line comparable store sales decreased 5.8 percent. Analysts expected revenues of $407.74 million.

"Our third quarter performance was severely impacted by a disruption in our supply chain following the implementation of our new warehouse and order management system," said Glenn Lyon, Chairman and Chief Executive Officer of Finish Line.

The company also announced today that it would improve the profitability of its store fleet by closing up to 150 stores, or 25 percent of its store base over the next four years. These stores produce average annual sales of $1 million, part of which the company expects to recapture at nearby locations and through its digital sites.

The company expects the store closures to generate a 100 basis point improvement in store contribution margins.

Further, the board of directors has declared a quarterly cash dividend of $0.10 per share of outstanding common stock. This represents a $0.01 per share, or 11 percent, increase over the previous dividend paid by the company. The quarterly cash dividend will be payable on March 14 to shareholders of record as of February 26.

Looking ahead, for the fourth quarter ending February 27, the company expects Finish Line comparable store sales to be up in the low-single to mid-single digit range and non-GAAP earnings per share between $0.78 and $0.83. Analysts look for earnings of $0.91 per share.

For the fiscal year ending February 27, 2016, the company now expects Finish Line comparable store sales to be up low-single digits and adjusted earnings per share between $1.18 and $1.23. Wall Street expects profit of $1.74 per share.

In September 2015, the company expected comparable store sales to be up in the low single to mid single digit range.