* 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)
By Alexandria Sage
SAN FRANCISCO, Sept 24 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
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
"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
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
(Reporting by Alexandria Sage; Editing by Gary Hill and Carol