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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Finish Line Inc. had a rough holiday season as traffic and sales fell and customers flocked to lower-priced merchandise, squeezing margins.
Same-store sales for the Indianapolis-based retailer fell 6.8 percent in December, CEO Glenn S. Lyon said in a conference call with Wall Street analysts this morning.
The company yesterday reported third-quarter results that fell short of analyst expectations, yet it managed to reduce its inventories and narrow a quarterly loss to $8.8 million for the period ended Nov. 29, compared to a loss of $13.8 million during the same period last year.
Company officials discussed the results and also offered insight into the all-important holiday sales season – which wasn’t pretty.
Lyon, who took over Finish Line on Dec. 1, called it the most challenging retail environment he’s seen in his 35 years in the business.
He said Finish Line has a plan to continue cutting overhead if sales continue to decrease for the next six to 12 months. The 700-store chain already has found savings in shipping, distribution and expects to save more by renegotiating or extending leases at about 40 of its locations. The chain also may close 10 to 15 stores this year.
“We cannot predict when the economy will improve or when consumer confidence will return, however we can control our expenses, inventories, premium positioning and the experience our customers have,” Lyon said on the call.
Most retailers are facing strong headwinds because of the recession, but executives at Finish Line say a strong balance sheet will give the chain an advantage. The company has $55 million in cash and no debt.
Shares were trading at $5.73 this morning, up more than 6 percent from yesterday’s close.
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