IBJNews

Cash-flush Finish Line likely to open new stores

Back to TopCommentsE-mailPrintBookmark and Share

Executives of The Finish Line Inc. have more than one reason to cheer the company’s fiscal third-quarter financials heading into the holidays.

On top of a small profit—its first in five quarters—the athletic retailer on Tuesday reported a growing balance sheet. The company ended the period with no interest-bearing debt and $149.2 million in cash and cash equivalents—up from $55.1 million a year ago.

Chief Financial Officer Ed Wilhelm said Tuesday that The Finish Line will use its improving financial position to likely open new stores next year and to improve its online shopping hub. The company plans to roll out the changes to its Web site by the end of February.

“It’s a growing part of our business,” Wilhelm said of the company’s online sales.

Indeed, Massachusetts-based Forrester Research projects U.S. online retail sales will rise 11 percent in 2009 to $156 billion.

Although the amount represents a small slide from last year’s growth of 13 percent, Forrester analyst Sucharita Mulpuru said in a report that retailers shouldn’t be alarmed given the poor economic conditions.

“Even as companies continue to struggle, the important takeaway is that the Web is continuing to grow,” said Mulpuru, who thinks growth in online sales will come at the expense of brick-and-mortar stores.

“It’s taking wallet-share away from the rest of the retail world.”

Wilhelm attributed The Finish Line’s increasing cash balance to the company’s conservative management style.

“We have a very strong balance sheet, which in today’s retailing world is an enviable position to be in,” he said.

Meanwhile, sales at Finish Line stores open at least a year—a key retail measure—increased 1.7 percent for the third quarter, compared to the same period last year; they had dropped 3.3 percent in 2008 for the year-ago period. Comparable-store sales climbed another 4.9 percent from Nov. 29 to Dec. 20 this year, the company said.

The rise in comparable-store sales through the first three weeks of December has company executives hopeful for a strong holiday sales season.

“We have our fingers crossed,” Wilhelm said.

The Finish Line operates 681 stores in 47 states.

Excluding a one-time tax benefit tied to its aborted merger with Nashville, Tenn.-based Genesco Inc., the company exceeded analysts’ expectations by reporting a fiscal third-quarter profit of $16,000.

Total net sales were down 0.2 percent, from $240.6 million a year ago to $240.1 million in the third quarter of 2009.

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
ADVERTISEMENT