US: Finish Line swings to Q3 loss
- Company swings to Q3 loss of $107,000
- Sales up 5.2% to $296.6m
- Gross margin slips to 30.3%
Net loss was $107,000 during the third quarter
US sportswear retailer The Finish Line has today (4 January) swung to a third-quarter loss after customers responded less favourably than expected to its new e-commerce site.
The company recorded a net loss of US$107,000 over the quarter ended 1 December against a profit of $5.5m the same period last year.
Net sales increased 5.2% to $296.6m, compared to $282m the prior year. Comparable store sales were up 3.6%. Gross margin reached 30.3%, slightly down on 32.3% the year before.
"The third quarter was clearly more challenging than we anticipated," said chairman and CEO Glenn Lyon.
"Sales came in below plan due primarily to a shift within athletic footwear trends and a less than favourable consumer response to the new e-commerce site we launched in mid November. Our top-line performance forced us to get more promotional to improve the composition of our inventory ahead of the important holiday season. At the same time, we did not adjust our cost structure quickly enough in response to slowing sales trends."
"Following our recent challenges, we have taken immediate actions to improve near-term results. This includes reverting back to our previous e-commerce site, implementing cost controls that allow us to better manage expenses, and elevating the assortment of key basketball products in our stores and online. Looking ahead, we remain committed to developing a premier omni-channel business. We'll also continue to evaluate the speed of our transformation to ensure that we are best positioned to achieve both our near- and long-term goals."
The company expects full-year earnings per share to be between $1.47 and $1.51, compared to an increase of 6-9% over the $1.53 in fiscal 2012.
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