Finish Line Inc. (NASDAQ: FINL) reported its profit sank 90% in the final quarter of the year as it booked a hefty write-off of its technology assets and closed stores, and issued annual guidance sharply below expectations.
Still, revenue and EPS for the latest quarter beat Wall Street expectations.
For the current year, the athletic-shoe retailer said it expects earnings between $1.50 and $1.56 a share, well below analysts’ estimates for $1.70 a share, according to Thomson Reuters.
Over all for the latest quarter, the retailer reported a profit of $4 million, or 9 cents a share, down from $40.8 million, or 87 cents, a year earlier. The company recorded $48.2 million in impairment charges and store closing costs. Excluding a $33.3 million write-off of technology assets and $19.5 million in store impairment charges, adjusted earnings were 83 cents a share. Revenue rose 5.2% to $580.5 million.
Analysts projected adjusted earnings of 80 cents a share on $567.8 million in sales, according to Thomson Reuters.
Comparable-store sales rose 4.6%.
The Indianapolis-based firm, battling declining sales, has said it would close up to 150 of its stores, or 25% of its total, over the next four years in a bid to increase profitability. And also plan to move more sales and marketing online to cut cost and boost the sales. However, this strategy is struggling now for the huge cost of building a new system and fierce competition from amazon. All the retailers are facing the challenge from e-commerce giants like amazon. It is the right choice to expand business online but how long it can achieve the success and how soon the market can see a new growing point are still need time to find answers.
Shares, which have erased a fifth of their value over the past 12 months, fell another 2.3% premarket.