The Finish Line, Inc. (NASDAQ:FINL) today announced preliminary
results for the fourth quarter and fiscal year 2018. The company’s
fiscal 2018 ended on March 3, 2018, reflecting a 14-week fourth
quarter and 53-week year, compared to the 13-week and 52-week
periods in fiscal 2017.
For the 14-week fourth quarter, consolidated net sales were
$561.3 million, up 0.7% compared with the 13-week period last year
driven by an 8.5% increase in Finish Line Macy’s sales largely
offset by a 0.9% decrease in Finish Line sales. Fourth quarter
comparable sales for Finish Line decreased 7.9%. The company now
expects to report fourth quarter earnings per share from continuing
operations between $0.39 and $0.40 on a GAAP basis. Excluding
adjustments detailed in the following table, adjusted earnings per
share from continuing operations are expected to be between $0.58
and $0.59 compared to the previous adjusted guidance range of $0.50
to $0.58. Despite the flat sales, disciplined expense and inventory
management helped offset top-line pressure.
For the 53-week fiscal 2018, consolidated net sales were $1.84
billion, down 0.3% compared with the 52-week fiscal 2017 driven by
a 1.9% decrease in Finish Line sales, partially offset by a 7.5%
increase in Finish Line Macy’s sales. Full year comparable sales
for Finish Line decreased 3.9%. The company now expects full year
earnings per share from continuing operations to be between $0.35
and $0.36 on a GAAP basis. Excluding adjustments detailed in the
following table, adjusted earnings per share from continuing
operations are expected to be between $0.68 and $0.69, compared to
the previous adjusted guidance of $0.59 to $0.67.
“Fourth quarter comparable sales were more challenging than we
expected,” said Sam Sato, Chief Executive Officer of Finish Line.
“I’m pleased with how our team responded to the top-line headwinds
by controlling inventories and expenses which we expect will
deliver profitability at or above the high-end of our guidance
range.”
Finish Line now plans to report actual fourth quarter and fiscal
year 2018 results on March 29, 2018 versus April 3, 2018 as
previously announced. Based on today’s announcement that Finish
Line has agreed to merge with JD Sports, the Company will not host
a conference call and webcast in conjunction with its fourth
quarter and fiscal year 2018 earnings report.
Reconciliation of Diluted Earnings Per
Share From Continuing Operations Outlook, GAAP to Diluted Earnings
Per Share from Continuing Operations Outlook, Non-GAAP
(Unaudited)
Fourteen Weeks Ended
March 3, 2018
Fifty-Three Weeks Ended
March 3, 2018
Diluted earnings per share from continuing operations, GAAP $0.39
to $0.40 $0.35 to $0.36 Impairment charges and store closing costs1
$0.43 to $0.44 $0.57 to $0.58 Revaluation of deferred tax liability
as a result of tax reform enactment2
($0.24) to ($0.25)
($0.24) to ($0.25)
Diluted earnings per share from continuing operations, Non-GAAP
$0.58 to $0.59 $0.68 to $0.69
Notes:
1
Estimated charges primarily represent write-off of
long-lived assets of underperforming stores and technology assets
no longer used by the Company. 2 Amount represents the Company’s
current estimate for the remeasurement of the Company's deferred
tax liabilities due to the United States tax reform legislation
enacted December 22, 2017.
About The Finish Line,
Inc.
The Finish Line, Inc. is a premium retailer that carries the
latest and greatest shoes, apparel and accessories. Headquartered
in Indianapolis, Finish Line runs approximately 930 branded
locations in U.S. malls and shops inside Macy’s department stores.
Finish Line employs approximately 13,000 associates who connect
customers to sneaker culture through style and sport. Shop online
at www.finishline.com or get access to everything on the Finish
Line app. Also keep track of what’s fresh by following Finish Line
on Instagram, Snapchat and Twitter.
Disclosure Regarding Non-GAAP
Measures
This report refers to certain financial measures that are
identified as non-GAAP. The company believes that these non-GAAP
measures are helpful to investors because they allow for a more
direct comparison of the company’s year-over-year performance and
are useful in assessing the company’s progress in achieving its
long-term financial objectives. This supplemental information
should not be considered in isolation or as a substitute for the
related GAAP measures. A reconciliation of the non-GAAP
measures to the comparable GAAP measures can be found above.
Forward-Looking
Statements
Statements in this press release regarding the proposed
transaction between Finish Line and JD Sports Fashion Plc (JD), the
expected timetable for completing the proposed transaction, and the
potential benefits created by the proposed transaction are intended
to be covered by the safe harbor for “forward-looking statements”
provided by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally can be identified by use
of statements that include, but are not limited to, phrases such as
“believe,” “expect,” “future,” “anticipate,” “intend,” “plan,”
“foresee,” “may,” “should,” “will,” “estimates,” “potential,”
“continue,” or other similar words or phrases. Similarly,
statements that describe objectives, plans, or goals also are
forward-looking statements. Such forward-looking statements involve
inherent risks and uncertainties, many of which are difficult to
predict and are generally beyond the control of Finish Line or JD.
Finish Line cautions readers that a number of important factors
could cause actual results to differ materially from those
expressed in, implied, or projected by such forward-looking
statements. Risks and uncertainties include, but are not limited
to: the failure of the proposed transaction to close in a timely
manner or at all; the effects of the announcement or pendency of
the proposed transaction on the Company and its business; the
nature, cost, and outcome of any litigation related to the proposed
transaction; general economic conditions; Finish Line’s reliance on
a few key vendors for a majority of its merchandise purchases
(including a significant portion from one key vendor); the
availability and timely receipt of products; the ability to timely
fulfill and ship products to customers; fluctuations in oil prices
causing changes in gasoline and energy prices, resulting in changes
in consumer spending as well as increases in utility, freight, and
product costs; product demand and market acceptance risks; the
inability to locate and obtain or retain acceptable lease terms for
the company’s stores; the effect of competitive products and
pricing; loss of key employees; cybersecurity risks, including
breach of customer data; the potential impact of legal or
regulatory changes, including the impact of the U.S. Tax Cuts and
Jobs Act of 2017; interest rate levels; the impact of inflation; a
major failure of technology and information systems; and the other
risks detailed in Finish Line’s Securities and Exchange Commission
(SEC) filings. Readers are urged to consider these factors
carefully in evaluating the forward-looking statements. Investors
and shareholders are also urged to read the risk factors set forth
in the proxy statement carefully when they are available.
If any of these risks or uncertainties materializes or if any of
the assumptions underlying such forward-looking statements proves
to be incorrect, the developments and future events concerning
Finish Line and JD set forth in this press release may differ
materially from those expressed or implied by these forward-looking
statements. You are cautioned not to place undue reliance on these
statements, which speak only as of the date of this document. We
anticipate that subsequent events and developments will cause our
expectations and beliefs to change. Finish Line assumes no
obligation to update such forward-looking statements to reflect
events or circumstances after the date of this document or to
reflect the occurrence of unanticipated events, unless obligated to
do so under the federal securities laws.
Additional Information for
Shareholders
This communication relates to the proposed merger between Finish
Line and JD. The proposed merger will be submitted to Finish Line’s
and JD’s shareholders for their consideration and approval. In
connection with the proposed merger, Finish Line and JD will file
relevant materials with (i) the SEC, including a proxy statement of
Finish Line, and (ii) the United Kingdom Listing Authority (UKLA)
in the U.K., including a circular of JD. When completed, a
definitive proxy statement and a form of proxy will be mailed to
the shareholders of Finish Line, and a circular will be mailed to
the shareholders of JD. This communication is not a substitute for
the proxy statement, circular, or other document(s) that Finish
Line and/or JD may file with the SEC or the UKLA in connection with
the proposed transaction. Finish Line’s and JD’s shareholders
are urged to read the proxy statement and other documents filed
with the SEC and the U.K. circular regarding the proposed merger
transaction when they become available because they will contain
important information about Finish Line, JD, and the proposed
merger transaction itself. Finish Line’s shareholders will be
able to obtain, without charge, a copy of the proxy statement (when
available) and other relevant documents filed with the SEC from the
SEC’s website at www.sec.gov. Finish Line’s shareholders also will
be able to obtain, without charge, a copy of the proxy statement
and other relevant documents (when available) by directing a
request by mail or telephone to Finish Line, Inc., 3308 N.
Mitthoeffer Road, Indianapolis, Indiana 46235, Attention: Corporate
Secretary, or by calling (317) 899-1022, or from Finish Line’s
website at www.finishline.com under “Investor Relations –
Financials & SEC Filings.” The information available through
Finish Line’s website is not and shall not be deemed part of this
document or incorporated by reference into other filings Finish
Line makes with the SEC. This communication does not constitute an
offer to sell or the solicitation of an offer to buy any
securities.
Finish Line, JD, and their respective directors and certain of
their officers may be deemed to be participants in the solicitation
of proxies from Finish Line’s shareholders with respect to the
special meeting of shareholders that will be held to consider the
matters to be approved by Finish Line’s shareholders in connection
with the merger transaction. Information about Finish Line’s
directors and executive officers and their ownership of Finish
Line’s common stock is set forth in the proxy statement for Finish
Line’s 2017 annual meeting of shareholders, as filed with the SEC
on Schedule 14A on June 2, 2017. Shareholders may obtain additional
information regarding the interests of Finish Line and its
directors and executive officers in the proposed merger, which may
be different than those of Finish Line’s shareholders generally, by
reading the proxy statement and other relevant documents regarding
the proposed merger, when filed with the SEC.
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version on businesswire.com: https://www.businesswire.com/news/home/20180325005106/en/
The Finish Line, Inc.Media:Dianna L. Boyce, (317)
613-6577Corporate CommunicationsorInvestor:Ed Wilhelm, (317)
613-6914Chief Financial Officer
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