Finish Line stock was slammed in early trading after investors were disappointed with the company’s sales miss for the second quarter.
The stock tumbled 13 percent to $21.49 when Finish Line delivered revenue in the second quarter of $483 million, which was light of the consensus estimate of $491 million. The company also forecast FY16 earnings to be $1.67, also lower than the expectations of $1.80. Sales were tracking to the low-end of the sales range and the company blamed the later Labor Day for the weakness in the second quarter.
Finish Line said that its Macy’s shops continue to perform well. Finish Line is repositioning and expanding 20 percent of its Macy’s shops. The company benefited from retro sneaker styles and Nike brands.
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The company stressed that it was making strides towards improving its margins. They noted that over the past year there was a major change in customer trends and an appetite move from performance to casual. Sam Sato, president at Finish Line said, “The biggest key is our ability to transition that inventory and focus on the casual end of the business, continue to move away from some of the platforms a year ago that were stronger. We feel good that we’ve made the transition”
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However, it was clear that the company’s floor focused on performance and that wasn’t what choppers wanted. The company said that within the next few weeks it was launching a new brand campaign featuring a high-profile two-time NBA All Star and an iconic hip hop artist.
Mr. Sato went on to say, “With respect to the product pipeline, we’re optimistic about the schedule for the remainder of this fiscal year. We’re well-positioned with leading styles from several brands. From Nike, this includes the exciting launch of the new Air Max 2016, as well as several styles from the Nike sportswear, Air Max franchise and new iterations of the hot Roshe Run. The retro and casual movement will continue to be driven by styles like Air Huarache as well as exciting updates from New Balance and Adidas.”