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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. on Friday reported a fiscal-fourth-quarter loss of $9.5 million, sending the Indianapolis-based company’s stock price plunging in morning trading.
Shares of the retailer of athletic apparel and footwear were trading at $13.40 cents each shortly before noon, a 16.5 percent decline from their closing price on Thursday. Shares fell as low as $12.73 earlier in the day.
The $9.5 million loss compared with a $4 million profit in last year’s fiscal fourth quarter.
Earnings, adjusted to account for discontinued operations and asset impairment costs, came to 50 cents per share, well short of analyst expectations, and lower than the 85 cents per share the company reported in the year-ago period. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 70 cents per share.
Sales at stores open more than a year fell 4.5 percent, and quarterly revenue decreased 0.4 percent, to $557.5 million.
Finish Line CEO Sam Sato partly attributed the disappointing sales to the company’s reliance on cutting prices to move products.
“Our fourth quarter earnings performance represented a disappointing finish to a challenging year financially for our company,” Sato said in a written statement. “As elements of our footwear offering did not resonate with our customers as we expected and the overall retail environment in February became increasingly difficult, we made the decision to get more aggressive on pricing to be competitive and clear slow-moving product. While this allowed us to end fiscal 2017 with clean inventory levels, it put significant pressure on fourth quarter product margins.”
In a conference call with analysts Friday, Sato also said sales were pinched by the Internal Revenue Service's decision to delay income tax returns until later in February. Customers often treat their tax returns as disposable income.
"At the same time, elements of our offerings didn't resonate with our customers," he said. "This was true in both running and basketball, our two largest
categories, where full-price selling fell short of forecast."
For the year, the company reported a loss of $18.2 million, or 44 cents per share. Annual revenue was $1.8 billion.
Finish Line has been making moves since the beginning of the year to make headway in a tough retail environment. In January, it reached an agreement to sell its unprofitable JackRabbit chain of 65 specialty running shoe stores to a Los Angeles-based investment firm.
The company operates about 950 Finish Line-branded stores throughout the United States.
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