FOOTWEAR AIDS NET AT FINISH LINE
NEW YORK — Steep sales declines in branded athletic apparel were offset by strength in footwear to help Finish Line’s profits nudge up 2.3 percent in its first quarter ended May 27.
The athletics chain, based in Indianapolis, earned $3.8 million, up from $3.7 million a year ago. Per share earnings were 15 cents in each period. Sales increased 10.9 percent to $146.7 million from $132.3 million. Same-store sales dipped 1 percent versus a 5 percent drop in the year-ago quarter.
Same-store sales in footwear rose 3 percent but dropped 13 percent in apparel and accessories.
“Product margins improved slightly for the quarter. However, overall gross profit margins declined due to continued occupancy cost increases as a percent to sales,” said Alan H. Cohen, president and chief executive.
On a conference call, Cohen said apparel “continues to suffer from a lack of compelling branded athletic product for our customers, as well as significantly lower average unit selling prices.”
Apparel “remained disappointing” in June due to continued soft demand for branded athletic goods and the lower price points, Cohen said.
Apparel inventories were down 20 percent on a square-foot basis at the quarter’s end and ahead about 2 percent in footwear as the chain allots more space for footwear, which performs well in June, according to Cohen.
Finish Line plans to open approximately 30 new stores and remodel or expand 12 existing stores for a net 12 percent square-footage increase this year. It now has 423 stores, which collectively occupy 2.6 million square feet.