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Finish Line profit beats expectations

September 26, 2008

Indianapolis-based Finish Line reported a second fiscal-quarter profit of $13.1 million yesterday, after posting a $1.8 million loss a year earlier.

The 24-cents-a-share profit in the period ended Aug. 30 was better than the 17 cents anticipated by analysts surveyed by Thomson Financial.

Sales increased 3.9 percent, to $353.3 million-barely meeting expectations.

Sales at stores open at least a year increased 4.7 percent, an improvement the athletic shoe and clothing seller attributed to a boost in the quality of merchandise even as inventory was reduced.

Finish Line shares fell 46 cents, to $10, this morning.

The results suggest Finish Line has broken out of a downturn earlier this year as it struggled to wriggle out of its proposed $1.5 billion acquisition of Tennessee-based mall retailer Genesco Inc. Finish Line paid Genesco $81.5 million to abandon the deal after Finish Line's lender raised concerns about Genesco's financial strength and Genesco filed a lawsuit to try to force the deal to close.

In July, Finish Line announced it would expand its warehouse and headquarters on the far-east side of Indianapolis, adding 180 workers to the 670 who work there.

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