Finish Line reports strong quarter, flags September slowdown
(Reuters) - Retailer Finish Line Inc (FINL.O) reported strong results on Friday and signed a deal to become the exclusive athletic footwear partner to Macy's Inc (M.N), but also flagged softening trends in the current quarter.
The retailer's shares, which rose about 10 percent in premarket trade, opened below Thursday's close after the company said on its earnings call that business has softened since mid-September and customer traffic has declined.
Finish Line expects to have stores at 450 Macy's outlets, starting in the spring of 2013. It expects the deal to add between $250 million and $350 million to annual sales in the long term.
Finish Line, which has been revamping its website, will also sell footwear on macys.com.
The company has been looking to gain share from rivals such as Foot Locker (FL.N) and Dick's Sporting Goods (DKS.N) by investing in its online and mobile sales platforms.
Comparable sales from its digital segment, comprising e-commerce and mobile commerce, rose about 30 percent in the second quarter, raising digital sales to about 11 percent of the total.
The company, which sells merchandise from Nike Inc (NKE.N), Puma SE (PUMG.DE) and Adidas AG (ADSGn.DE), now expects full-year earnings per share to grow 6 to 9 percent, raising the top-end of the forecast by 2 percentage points.
Finish Line said it is likely to incur one-time start-up costs related to the Macy's deal, mainly in the fourth quarter, but had not included these in its full-year outlook.
Net sales rose 16 percent to $385 million. Same-store sales grew 12.3 percent. Analysts were expecting revenue of $358.3 million, according to Thomson Reuters I/B/E/S.
During the second-quarter, the company earned 49 cents per share, while analysts on average were expecting earnings of 44 cents per share.
Finish Line shares were flat at $22.71 on Friday morning on the Nasdaq.
(Reporting by Chris Jonathan Peters in Bangalore; Editing by Sreejiraj Eluvangal)