IBJNews

Toning-shoe trend fading, but doesn't trip up Finish Line

Back to TopCommentsE-mailPrintBookmark and Share

The toning trend in athletic shoes apparently has run its course.

Sales of the oddly shaped shoes fell more than 45 percent in the fourth quarter for The Finish Line Inc., and the Indianapolis-based athletic footwear and apparel retailer is making big markdowns on its remaining inventory.

But the falling popularity of the shoes hasn't tripped up Finish Line. A booming business in basketball and running shoes, and improving fortunes in children's footwear helped the company report a fourth-quarter profit increase of 12 percent and same-store sales improvement of 4 percent.

The company's shares added more than 5 percent, to $19.46, in early trading Friday, just shy of a 52-week high.

Moving quickly to stay up on trends is familiar territory for Finish Line. Chairman and CEO Glenn Lyon told Wall Street analysts in an earnings conference call Friday that the company acts aggressively to manage its inventory and eliminate out-of-date gear.

Discounting on remaining toning shoes hurt the company's margins in the fourth quarter and could also squeeze margins in the first quarter, but a strong lineup of new products should help offset the weakness, he said. Classic and retro shoes are making another comeback.

The fall of toning shoes—pitched by the likes of Hall of Fame quarterback Joe Montana as a quick way to exercise the legs and buttocks just by walking—isn't the first time a fad fizzled. Finish Line certainly took advantage of the trend.

Lyon noted that three years ago, Nike Shox running shoes represented about 50 percent of Finish Line's business.

"I don't know what's going to soften up next," he said. "But we'll be diligent about it, move through it and move on to what the customer wants."

Finish Line, which operates 663 stores in malls across the United States, reported net income of $34.3 million, or 63 cents per share, in the quarter ended Feb. 26, compared with $30.6 million, or 55 cents per share, during the samer period a year earlier. Excluding a charge for writing down the value of stores, Finish Line said it would have earned 65 cents per share.

Revenue in the quarter rose 2.7 percent, to $384.6 million, from $374.5 million a year earlier.

Analysts expected earnings of 65 cents per share on revenue of $376.7 million.

Revenue at stores open at least a year, a key indicator for retailers, rose 4 percent, slowing from a 10-percent jump a year earlier. For the first three weeks of the current quarter, Feb. 27 through March 20, the figure rose 10.1 percent, compared with a 15.4-percent increase a year earlier, the company said.

The company said operating margins were 9 percent, near its goal of double-digit margins for the full year. For the full fiscal year, the company earned $68.8 million on sales of $1.23 billion, compared with $35.7 million on sales of $1.17 billion the previous year.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

ADVERTISEMENT