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.
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
“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
“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
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
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.