Is It Time for a Turnaround at Finish Line?

Finish Line Inc. (NASDAQ: FINL) reported its fiscal second-quarter financial results before the markets opened on Friday. The company said that it had $0.12 in earnings per share (EPS) and $469.4 million in revenue, compared with consensus estimates from Thomson Reuters that called for $0.12 in EPS and revenue of $470.51 million. In the same period of last year, the company posted EPS of $0.53 and $509.4 million in revenue.

While results were more or less in line with estimates, comparable sales and year-over-year numbers definitely made these results look worse at first glance.

In fact shareholders sent the stock lower in premarket trading. This stock has been beaten up all year, with shares down about 50% year to date. But it seems that shareholders believe it has fallen far enough, and shares were up handily after the opening bell, begging the question whether shares are turning around.

During the quarter, comparable store sales decreased 4.5%. At the same time, Finish Line sales at Macy’s increased 5.6%.

In terms of the outlook for the fiscal third quarter, Finish Line expects to see comparable sales decrease 3% to 5%, as well as a net loss per share in the range of $0.32 to $0.40. The consensus estimates call for a net loss of $0.35 per share and revenue of $364.85 million for the coming quarter.

Finish Line also issued fiscal fourth-quarter guidance of a 3% to 5% decline in comparable sales and EPS in the range of $0.50 to $0.58.

Cash and cash equivalents totaled $114.92 million at the end of the quarter, up from $90.86 million at the end of the previous fiscal year.

Sam Sato, CEO of Finish Line, commented:

Our second quarter results were shaped by a very promotional marketplace for athletic footwear. With industry headwinds weighing on our sales and margin trends, we remain disciplined in managing our expenses and inventories. While we are planning for a challenging retail environment in the near-term, we are confident that the merchandise, digital, in-store and operational initiatives currently in place will allow us to achieve our current full year outlook and best position the company to deliver increased shareholder value over the long-term.

Shares of Finish Line were trading up more than 6% at $9.80 on last look, near the consensus analyst price target of $9.82. The 52-week range is $6.90 to $24.50.