Can Finish Line Succeed Carrying Nike Brands?

Finish Line, Inc. (FINL) Consumer Discretionary - Specialty Retail Reports January 7, Before Market Opens

Key Takeaways

• The Estimize consensus calls for revenue of $412.47 million and EPS of $-.02
• Despite a weak 2015, analysts have upgraded Finish Line stock to a “buy” rating
• What are you expecting for FINL? Get your estimate in here!

After weak holiday consumer spending, many retailers were punished with feeble sales and declining share prices. Athletic footwear and apparel retailer, Finish Line, has been one of the hardest hit retailers in 2015 with share prices falling 24% of the course of the year. Despite a disastrous year, analysts expect the footwear company to rebound in 2016 and have recently upgraded the company to a “buy” rating. Even with positive momentum coming into their FQ3 report, Finish Line is still expected to post meager earnings. The Estimize consensus calls for revenue of $412.47 million and EPS of $-.02, slightly more bullish than Wall Street’s estimates. Compared to FQ3 2015, this represents a YoY increase in revenue of 3.5%. However, as consumers transition toward casual athletic wear, Finish Line’s core business of running footwear and apparel is poised for a strong year. 

In the past, the health of athletic footwear and apparel was reflective of basketball sales. Finish Line had lost market share to Foot Locker, which had successfully carved out its niche as the preeminent basketball retailer. However there has been an ongoing transition in cultural trends towards casual athletic wear and running shoes. Fortunately, Finish Line has rebranded itself as running company through the Finish Line brand and its subsidiaries, Running Specialty Group and JackRabbit Sports. Besides the promise of their casual athletic products, Finish Line expects their women’s line and Macy’s shop in shop sales to grow. Despite the recent hiccup, the footwear company remains a destination for premium athletic footwear with the support of key brands like Nike and Under Armour (UA). On the downside, Finish Line’s margins continue to shrink at the hands of a struggling basketball line. Yet, even with unimpressive numbers, Finish Line’s growth is expected to accelerate in the new year. 

Do you think FINL can beat estimates? There is still time to get your estimate in here!

Photo Credit: Mike Mozart