Finish Line Q2 Results Beat View, Backs FY14 Adj. Earnings Growth Forecast

(RTTNews) - Finish Line Inc. (FINL), a retailer of athletic shoes, apparel and accessories, Friday reported higher profit in its second quarter, driven by higher comparable store sales, despite margin pressure. Earnings per share and top line beat analysts' consensus estimates. Further, the company backed its growth forecast for fiscal 2014 adjusted earnings, while adjusted its comparable store sales view.

In pre-market activity, Finish Line shares are currently trading at $24.25, up $1.86 or 8.31 percent.

For the second quarter, net income attributable to the company increased to $26.51 million from $24.97 million in the same quarter last year. Earnings per share improved 10.2 percent to $0.54 from $0.49 a year ago.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.45 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 13.3 percent to $436.03 million from $385.01 million in the prior year quarter. Thirteen analysts had revenue consensus of $426.39 million for the quarter. Finish Line comparable store sales increased 0.9 percent.

Gross profit increased to $146.34 million from last year's $134.55 million. Operating income increased to $42.87 million from $39.51 million a year ago.

Meanwhile, gross profit as a percentage of sales declined to 33.6 percent from 35 percent a year earlier, and operating income as a percentage of sales fell to 9.8 percent from last year's 10.3 percent.

Commenting on the results, Chairman and Chief Executive Officer Glenn Lyon said, "The combination of positive comparable sales and good expense control drove a 10 percent increase in earnings per share over last year. At the same time, we continued to make good progress building our business with Macy's and growing our Running Specialty Group."

Looking ahead for the fiscal year ending March 1, 2014, the company still expects earnings per share to increase mid-single digit percent over fiscal 2013 adjusted earnings per share of $1.47. Analysts expect the company to report earnings of $1.57 per share for fiscal year.

Finish Line comparable store sales are now projected to increase low single digits compared to its previous expectation for a slight increase.

"Looking ahead, we are cognizant of the headwinds currently facing the retail industry and this has been incorporated into our near-term planning. We remain confident that our strategy to create a leading multi-divisional, omni-channel business will lead to sustainable sales and earnings growth and increased shareholder value over the long term," Lyon said.