Athletic sports gear retailer, Finish Line Inc. (NASDAQ: FINL) reported on Friday that its fiscal first-quarter net income fell 59% as the expenses soared due to opening of new stores in Macy’s Inc. (NYSE: M), offsetting higher revenue and improvement in same-store-sales.
In order to benefit from growing popularity of basketball products, the Company, earlier during the year said that it would focus more on basketball gear segment by introducing more product offerings even as sales of running gear, which is company’s biggest revenue generator, showed weakness from last fall.
Notwithstanding changes made in product offerings, the retailer is still underperforming compared to its bigger competitor, Foot Licker Inc, a company specializing in basketball gear. The Company however said that it will keep focus on its core segment, (running gear).
Commenting over the results, Finish Line Chief Executive Officer, Glenn Lyon said to analysts in a conference call that the company was happy with improved results in its running gear business and growing traction in the basketball gear market.
“We have clear vision and sound strategies in place to transform our Company into a premier, multi-divisional, omni-channel retailer and drive increased value for our shareholders,” added Lyon.
For the fiscal first quarter ended June 1, the Company reported a profit of $5.1 million or 10 cents a share compared to a net income of $12.3 million or 24 cents a share, in the year earlier quarter.
Stripping out onetime items such as costs related to launching of new stores, adjusted earnings stood at 20 cents a share.
Sales climbed 10% to $351.1 million.
Analysts’ consensus estimate was for earnings of 16 cents a share on revenue of $343 million.
Same-store-sales, a key gauge on retail chain’s performance, rose 2.4%.
Gross margin contracted to 30.5% from 32.8%, in the same quarter of last year.
The Company also reaffirmed its full-year outlook.
Shares were gaining about 3.80% in early trade.
Earlier on Monday, analysts at Deutsche Bank reiterated “hold” rating on the stock. The firm keeps a price target of $19.