For the thirteen weeks ended
-
Consolidated net sales were
$371.7 million , an increase of 3.0% over the prior year period. -
Finish Line comparable store sales increased 0.7%. - Finish Line Macy’s sales increased 33.2%.
-
On a GAAP basis, diluted loss per share from continuing operations
were
$(0.26) . -
Non-GAAP diluted loss per share from continuing operations, which
primarily excludes severance related charges, were
$(0.24) . - As a result of the company’s process to explore strategic alternatives for the JackRabbit business, the results of JackRabbit have been reported within discontinued operations.
“We are disappointed that our third quarter sales and earnings fell
short of our expectations,” said
Balance Sheet
As of
The company repurchased 250,000 shares of common stock in the third
quarter, totaling
As of
Outlook
For the fiscal year ending
For the fourth quarter ending
Included in this updated outlook is an expected tax refund delay
shifting sales from the fourth quarter of fiscal year 2017 into the
first quarter of fiscal year 2018. We anticipate this timing difference
will reduce fourth quarter
Q3 Fiscal 2017 Conference Call Today,
The company will host a conference call for investors today,
Disclosure Regarding Non-GAAP Measures
This report refers to certain financial measures that are identified as
non-GAAP. The company believes that these non-GAAP measures, including
selling, general and administrative expenses, operating income, income
tax expense, net income from continuing operations, and diluted earnings
per share from continuing operations, are helpful to investors because
they allow for a more direct comparison of the company’s year-over-year
performance and are useful in assessing the company’s progress in
achieving its long-term financial objectives. This supplemental
information should not be considered in isolation or as a substitute for
the related GAAP measures. A reconciliation of the non-GAAP measures to
the comparable GAAP measures can be found in the company’s Form 8-K
filed with the
About The
The
Forward-Looking Statements
This news release includes statements that are or may be considered “forward-looking” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “expect,” “future,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “outlook,” “potential,” “optimistic,” “confidence,” “continue,” “evolve,” “expand,” “growth” or words and phrases of similar meaning. Statements that describe objectives, plans or goals also are forward-looking statements.
All of these forward-looking statements are subject to risks, management
assumptions and uncertainties that could cause actual results to differ
materially from those contemplated by the relevant forward-looking
statements. The principal risk factors that could cause actual
performance and future actions to differ materially from the
forward-looking statements include, but are not limited to, the
company’s reliance on a few key vendors for a majority of its
merchandise purchases (including a significant portion from one key
vendor); the availability and timely receipt of products; the ability to
timely fulfill and ship products to customers; fluctuations in oil
prices causing changes in gasoline and energy prices, resulting in
changes in consumer spending as well as increases in utility, freight
and product costs; product demand and market acceptance risks;
deterioration of macroeconomic and business conditions; the inability to
locate and obtain or retain acceptable lease terms for the company’s
stores; the effect of competitive products and pricing; loss of key
employees; execution of strategic growth initiatives (including actual
and potential mergers and acquisitions and other components of the
company’s capital allocation strategy); cybersecurity risks, including
breach of customer data; a major failure of technology and information
systems; and the other risks detailed in the company’s
| The Finish Line, Inc. | |||||||||||||||||||||
| Consolidated Statements of Operations (Unaudited) | |||||||||||||||||||||
| (In thousands, except per share and store/shop data) | |||||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||
| November 26, | November 28, | November 26, | November 28, | ||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
| Net sales | $ | 371,741 | $ | 361,025 | $ | 1,286,941 | $ | 1,239,137 | |||||||||||||
| Cost of sales (including occupancy costs) | 272,377 | 277,986 | 900,691 | 874,115 | |||||||||||||||||
| Gross profit | 99,364 | 83,039 | 386,250 | 365,022 | |||||||||||||||||
| Selling, general, and administrative expenses | 118,133 | 115,716 | 352,193 | 333,242 | |||||||||||||||||
| Impairment charges and store closing costs | — | 167 | 182 | 495 | |||||||||||||||||
| Operating (loss) income | (18,769 | ) | (32,844 | ) | 33,875 | 31,285 | |||||||||||||||
| Interest expense, net | (152 | ) | (3 | ) | (178 | ) | (4 | ) | |||||||||||||
| (Loss) income from continuing operations before income taxes | (18,921 | ) | (32,847 | ) | 33,697 | 31,281 | |||||||||||||||
| Income tax (benefit) expense | (8,332 | ) | (13,389 | ) | 10,841 | 11,118 | |||||||||||||||
| Net (loss) income from continuing operations | (10,589 | ) | (19,458 | ) | 22,856 | 20,163 | |||||||||||||||
| Net loss from discontinued operations, net of tax | (29,849 | ) | (2,377 | ) | (31,593 | ) | (2,403 | ) | |||||||||||||
| Net (loss) income | (40,438 | ) | (21,835 | ) | (8,737 | ) | 17,760 | ||||||||||||||
| Net loss attributable to redeemable noncontrolling interest of discontinued operations | — | — | — | 96 | |||||||||||||||||
| Net (loss) income attributable to The Finish Line, Inc. | $ | (40,438 | ) | $ | (21,835 | ) | $ | (8,737 | ) | $ | 17,856 | ||||||||||
| Diluted (loss) earnings per share attributable to The Finish Line, Inc. shareholders: | |||||||||||||||||||||
| Continuing operations | $ | (0.26 | ) | $ | (0.44 | ) | $ | 0.54 | $ | 0.44 | |||||||||||
| Discontinued operations | $ | (0.74 | ) | $ | (0.05 | ) | $ | (0.75 | ) | $ | (0.05 | ) | |||||||||
| Diluted (loss) earnings per share attributable to The Finish Line, Inc. shareholders | $ | (1.00 | ) | $ | (0.49 | ) | $ | (0.21 | ) | $ | 0.39 | ||||||||||
| Diluted weighted average shares | 40,511 | 44,542 | 41,234 | 45,211 | |||||||||||||||||
| Dividends declared per share | $ | 0.10 | $ | 0.09 | $ | 0.30 | $ | 0.27 | |||||||||||||
| Finish Line store activity for the period: | |||||||||||||||||||||
| Beginning of period | 585 | 620 | 591 | 637 | |||||||||||||||||
| Opened | 1 | 3 | 6 | 8 | |||||||||||||||||
| Closed | (6 | ) | (6 | ) | (17 | ) | (28 | ) | |||||||||||||
| End of period | 580 | 617 | 580 | 617 | |||||||||||||||||
| Square feet at end of period | 3,224,813 | 3,390,971 | |||||||||||||||||||
| Average square feet per store | 5,560 | 5,496 | |||||||||||||||||||
| Branded shops within department stores activity for the period: | |||||||||||||||||||||
| Beginning of period | 391 | 394 | 392 | 395 | |||||||||||||||||
| Opened | 1 | 1 | 1 | 1 | |||||||||||||||||
| Closed | — | (1 | ) | (1 | ) | (2 | ) | ||||||||||||||
| End of period | 392 | 394 | 392 | 394 | |||||||||||||||||
| Square feet at end of period | 539,923 | 478,134 | |||||||||||||||||||
| Average square feet per shop | 1,377 | 1,214 | |||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||
| November 26, | November 28, | November 26, | November 28, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||
| Cost of sales (including occupancy costs) | 73.3 | 77.0 | 70.0 | 70.5 | |||||||||||||
| Gross profit | 26.7 | 23.0 | 30.0 | 29.5 | |||||||||||||
| Selling, general, and administrative expenses | 31.7 | 32.1 | 27.4 | 27.0 | |||||||||||||
| Impairment charges and store closing costs | — | — | — | — | |||||||||||||
| Operating (loss) income | (5.0 | ) | (9.1 | ) | 2.6 | 2.5 | |||||||||||
| Interest expense, net | (0.1 | ) | — | — | — | ||||||||||||
| (Loss) income from continuing operations before income taxes | (5.1 | ) | (9.1 | ) | 2.6 | 2.5 | |||||||||||
| Income tax (benefit) expense | (2.3 | ) | (3.7 | ) | 0.8 | 0.9 | |||||||||||
| Net (loss) income from continuing operations | (2.8 | ) | (5.4 | ) | 1.8 | 1.6 | |||||||||||
| Net loss from discontinued operations, net of tax | (8.1 | ) | (0.6 | ) | (2.5 | ) | (0.2 | ) | |||||||||
| Net (loss) income | (10.9 | ) | (6.0 | ) | (0.7 | ) | 1.4 | ||||||||||
| Net loss attributable to redeemable noncontrolling interest of discontinued operations | — | — | — | — | |||||||||||||
| Net (loss) income attributable to The Finish Line, Inc. | (10.9 | )% | (6.0 | )% | (0.7 | )% | 1.4 | % | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||||||||
| November 26, | November 28, | February 27, | |||||||||||||
| 2016 | 2015 | 2016 | |||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| ASSETS | |||||||||||||||
| Cash and cash equivalents | $ | 33,297 | $ | 55,273 | $ | 79,495 | |||||||||
| Merchandise inventories, net | 401,528 | 383,758 | 347,966 | ||||||||||||
| Other current assets | 47,689 | 72,351 | 62,368 | ||||||||||||
| Assets held for sale | 31,935 | 85,674 | 80,795 | ||||||||||||
| Property and equipment, net | 258,313 | 274,098 | 239,067 | ||||||||||||
| Other assets, net | 8,874 | 8,622 | 7,857 | ||||||||||||
| Total assets | $ | 781,636 | $ | 879,776 | $ | 817,548 | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
| Current liabilities, excluding the revolving credit facility and liabilities held for sale | $ | 230,237 | $ | 237,490 | $ | 207,906 | |||||||||
| Revolving credit facility | 17,000 | — | — | ||||||||||||
| Liabilities held for sale | 15,344 | 17,646 | 15,185 | ||||||||||||
| Deferred credits from landlords | 32,401 | 30,245 | 30,503 | ||||||||||||
| Other long-term liabilities | 20,986 | 36,806 | 36,310 | ||||||||||||
| Shareholders’ equity | 465,668 | 557,589 | 527,644 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 781,636 | $ | 879,776 | $ | 817,548 | |||||||||
| Reconciliation of Selling, General, and Administrative Expenses, GAAP to | ||||||||||||||||||||||||||||||||||||
| Selling, General, and Administrative Expenses, Non-GAAP (Unaudited) | ||||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||||||||||||
| November 26, 2016 | November 28, 2015 | November 26, 2016 | November 28, 2015 | |||||||||||||||||||||||||||||||||
| Selling, general, and administrative expenses, GAAP | $ | 118,133 | 31.7 | % | $ | 115,716 | 32.1 | % | $ | 352,193 | 27.4 | % | $ | 333,242 | 27.0 | % | ||||||||||||||||||||
| Employee severance, retirement, and other costs | (2,132 | ) | (0.5 | ) | — | — | (2,132 | ) | (0.2 | ) | — | — | ||||||||||||||||||||||||
| Selling, general, and administrative expenses, Non-GAAP | $ | 116,001 | 31.2 | % | $ | 115,716 | 32.1 | % | $ | 350,061 | 27.2 | % | $ | 333,242 | 27.0 | % | ||||||||||||||||||||
| Reconciliation of Operating (Loss) Income, GAAP to Operating (Loss) Income, Non-GAAP (Unaudited) | ||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||||
| November 26, 2016 | November 28, 2015 | November 26, 2016 | November 28, 2015 | |||||||||||||||||||||||||
| Operating (loss) income, GAAP | $ | (18,769 | ) | (5.0 | )% | $ | (32,844 | ) | (9.1 | )% | $ | 33,875 | 2.6 | % | $ | 31,285 | 2.5 | % | ||||||||||
| Employee severance, retirement, and other costs | 2,132 | 0.5 | — | — | 2,132 | 0.2 | — | — | ||||||||||||||||||||
| Impairment charges and store closing costs | — | — | 167 | — | 182 | — | 495 | 0.1 | ||||||||||||||||||||
| Operating (loss) income, Non-GAAP | $ | (16,637 | ) | (4.5 | )% | $ | (32,677 | ) | (9.1 | )% | $ | 36,189 | 2.8 | % | $ | 31,780 | 2.6 | % | ||||||||||
|
Reconciliation of Income Tax (Benefit) Expense, GAAP to Income Tax (Benefit) Expense, Non-GAAP (Unaudited) |
|||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||||||||||
| November 26, 2016 | November 28, 2015 | November 26, 2016 | November 28, 2015 | ||||||||||||||||||||||||||||||||||
| Income tax (benefit) expense, GAAP | $ | (8,332 | ) | (2.3 | )% | $ | (13,389 | ) | (3.7 | )% | $ | 10,841 | 0.8 | % | $ | 11,118 | 0.9 | % | |||||||||||||||||||
| Tax effect of: | |||||||||||||||||||||||||||||||||||||
| Employee severance, retirement, and other costs | 1,453 | 0.4 | — | — | 1,453 | 0.2 | — | — | |||||||||||||||||||||||||||||
| Impairment charges and store closing costs | — | — | 64 | — | 70 | — | 191 | — | |||||||||||||||||||||||||||||
| Income tax (benefit) expense, Non-GAAP | $ | (6,879 | ) | (1.9 | )% | $ | (13,325 | ) | (3.7 | )% | $ | 12,364 | 1.0 | % | $ | 11,309 | 0.9 | % | |||||||||||||||||||
| Reconciliation of Net (Loss) Income From Continuing Operations, GAAP to | |||||||||||||||||||||||||||||||||||||
| Net (Loss) Income From Continuing Operations, Non-GAAP (Unaudited) | |||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||||||||||
| November 26, 2016 | November 28, 2015 | November 26, 2016 | November 28, 2015 | ||||||||||||||||||||||||||||||||||
| Net (loss) income from continuing operations, GAAP | $ | (10,589 | ) | (2.8 | )% | $ | (19,458 | ) | (5.4 | )% | $ | 22,856 | 1.8 | % | $ | 20,163 | 1.6 | % | |||||||||||||||||||
| Employee severance, retirement, and other costs, net of income taxes | 679 | 0.1 | — | — | 679 | — | — | — | |||||||||||||||||||||||||||||
| Impairment charges and store closing costs, net of income taxes | — | — | 103 | — | 112 | — | 304 | 0.1 | |||||||||||||||||||||||||||||
| Net (loss) income from continuing operations, Non-GAAP | $ | (9,910 | ) | (2.7 | )% | $ | (19,355 | ) | (5.4 | )% | $ | 23,647 | 1.8 | % | $ | 20,467 | 1.7 | % | |||||||||||||||||||
| Reconciliation of Diluted (Loss) Earnings Per Share From Continuing Operations, GAAP to | ||||||||||||||||||||
| Diluted (Loss) Earnings Per Share From Continuing Operations, Non-GAAP (Unaudited) | ||||||||||||||||||||
|
|
||||||||||||||||||||
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||
| November 26, | November 28, | November 26, | November 28, | |||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Diluted (loss) earnings per share from continuing operations, GAAP | $ | (0.26 | ) | $ | (0.44 | ) | $ | 0.54 | $ | 0.44 | ||||||||||
| Employee severance, retirement, and other costs, net of income taxes | 0.02 | — | 0.02 | — | ||||||||||||||||
| Impairment charges and store closing costs, net of income taxes | — | — | — | 0.01 | ||||||||||||||||
| Diluted (loss) earnings per share from continuing operations, Non-GAAP | $ | (0.24 | ) | $ | (0.44 | ) | $ | 0.56 | $ | 0.45 | ||||||||||
Note: See Disclosure Regarding Non-GAAP Measures above.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161221005355/en/
Source: The
The Finish Line, Inc.
Media Contact:
Dianna L. Boyce,
317-613-6577
Corporate Communications
or
Investor
Contact:
Ed Wilhelm, 317-613-6914
Chief Financial Officer
