The Finish Line Inc. said Friday that it is increasing its earnings outlook for fiscal 2013 after announcing an agreement with Macy’s Inc. to become the exclusive athletic footwear partner of the national department store chain.
Terms of the deal call for the Indianapolis-based athletic apparel retailer to open athletic shoe shops in more than 450 Macy’s stores and on its website. The deal—announced Friday morning along with a positive quarterly financial report—is expected to boost Finish Line’s sales $250 million to $350 million a year.
Finish Line now expects fiscal 2013 earnings to grow 6 percent to 9 percent over the previous year. It had anticipated an increase of 6 percent to 7 percent.
Finish Line will lease shoe departments from Cincinnati-based Macy’s in 450 of its stores and manage the athletic footwear assortment in 225 additional Macy’s stores. The rollout of the partnership will begin next spring and should be completed by fall 2014.
“Macy’s large and profitable store portfolio, its customer base that is concentrated in a demographic that Finish Line has not penetrated to date, and most importantly, its customer-centric philosophy and omnichannel focus make them an ideal partner for us to broaden our reach beyond our bricks-and-mortar stores and our website,” Finish Line CEO Glenn Lyon said in a prepared statement.
Meanwhile, Finish Line’s profit for the fiscal second quarter ended Sept. 1 increased 19 percent, from $20.9 million, or 39 cents a share, a year ago, to $25 million, or 49 cents a share.
Revenue increased 16 percent, from $332 million to $385 million.
Analysts had expected the company to earn 44 cents a share on sales of $358.3 million.
Same-store sales rose 12.3 percent, the 12th consecutive quarter the company reported a gain in the key metric. Online sales jumped 29.6 percent.
Finish Line operated 638 stores as of Sept. 1.
Finish Line shares rose 5 percent in premarket trading, to $23.90 each. Those gains were wiped out later in the morning after company executives said in a conference call that same-store sales in September had flattened.