Finish Line Inc.’s third-quarter loss shrank with cuts in costs and inventory, but the company missed Wall Street’s estimate.
For the quarter ended Nov. 29, the Indianapolis-based athletic retailer posted a net loss of $8.8 million, or 16 cents a diluted share, compared with a loss of $16 million, or 34 cents a share, for the year-ago period. Excluding discontinued operations, the net loss for the 2007 quarter was $13.8 million, or 29 cents a share. Quarterly revenue declined 4.4 percent, to $256.9 million from $268.7 million, and was off 3.6 percent on a comparable-store basis. Comps fell 3.3 percent at Finish Line stores and 6.8 percent at Man Alive units.
Analysts surveyed by Yahoo expected a loss of 13 cents on sales of $269.2 million.
Earnings results were announced after the markets closed Tuesday. Finish Line shares were down 9.3 percent to close at $5.38.
Gross margin declined slightly to 25.9 percent of sales versus 26 percent last year, and inventory per square foot decreased 12 percent. Selling, general and administrative expenses fell 2.6 percent.
“We continued making progress on our strategic plan of controlling expenses, managing our inventory investments and maintaining our position as the premium athletic specialty store,” said chief executive officer Glenn Lyon.
With “no interest-bearing debt and $55 million in cash and short-term investments,” Lyon said Finish Line will “continue to succeed even during the toughest of economic times.”
For the nine months, the 791-unit mall-based specialty retailer reported net income of $5.1 million, or 10 cents a diluted share, compared with a loss of $21.6 million, or 46 cents a share, last year. Revenue grew 0.4 percent to $898.1 million, from $894.4 million. Excluding discontinued operations, the company reported a loss of $9.5 million, or 20 cents, for the 2007 period.
Finish Line said it anticipates continued “variability” on its balance sheet and declined to make earnings projections. Analysts on average expect the firm to post a profit of 38 cents a share on revenue of $382 million in the fourth quarter.