UPDATE 2-Finish Line discontinued Man Alive leads to Q2 loss
* Q2 adjusted EPS 21 cents vs Street's 20 cents
* Q2 sales decline 11.4 percent
* Shares close down 1.3 percent on Nasdaq. (Adds CFO quotes, detail on margins, costs, byline)
SAN FRANCISCO, Sept 24 (Reuters) - Finish Line Inc (FINL.O) on Thursday swung to a second-quarter net loss from a year-ago profit as its now-discontinued Man Alive chain weighed on the athletic shoe and apparel retailer.
But the company said the impact of discontinued operations would be smaller in the third quarter, while sales comparisons would get easier.
The company reported a net loss in the second quarter of $874,000, or 2 cents per share compared with a net profit of $13.1 million, or 24 cents per share in the year ago period.
Excluding its discontinued operations, the company earned 21 cents per share, above analysts' expectations for adjusted earnings of 20 cents per share, according to Reuters Estimates.
Net sales fell 11.4 percent to $298.7 million, while same-store sales fell 9.9 percent, the company said. Having fewer stores contributed to the sales decline in the quarter as did fewer shoppers in malls, which has hurt all mall-based retailers.
"The traffic for us in the quarter that we just ended was challenging and a big driver in the comp sales decline," Chief Financial Officer Ed Wilhelm told Reuters.
The Indianapolis-based company this summer exited its money-losing Man Alive chain, which sold streetwear-inspired fashion, to focus on its namesake mall-based chain.
"We're really positioned well for future profit growth particularly if the consumer comes back and starts spending with us," Wilhelm said. "We can react very quickly there."
Gross margins rose slightly in the quarter from 31.8 percent of sales to 31.9 percent. Selling, general and administrative costs fell by 9 percent, while inventories were down 13.4 percent at the end of the quarter from the year-ago period.
Shares of Finish Line closed at $9.30, down 1.3 percent or 12 cents, on the Nasdaq and fell to $9.15 in after-hours trading. (Reporting by Alexandria Sage; Editing by Gary Hill and Carol Bishopric)
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