This Company Is Running Ahead of the Pack

The Finish Line is clearly moving in the right direction. Will the company continue to outperform competitors Foot Locker, Dick's Sporting Goods, Cabela's, and Hibbett Sports?

Apr 2, 2014 at 10:15AM

Finl Image

Source: The Finish Line.

The Finish Line (NASDAQ:FINL) is delivering strong financial results for investors while outgrowing other players in the industry, be it solid performers like Foot Locker (NYSE:FL) and Dick's Sporting Goods (NYSE:DKS) or companies facing slowdowns such as Cabela's (NYSE:CAB) and Hibbett Sports (NASDAQ:HIBB). The Finish Line looks like a winning player in the athletic shoes and apparel business.

Running in the right direction
The Finish Line has implemented a series of initiatives to adapt to the omnichannel retail world over the last years. The company improved both the front- and back-end of its digital platform, launched fresh mobile solutions, and implemented new marketing programs with an omnichannel approach.

Its partnership with Macy's is yielding solid results, The Finish Line has expanded its presence to 185 shops at Macy's stores in addition to managing the athletic footwear business in another 477 stores as well as online at Management expects to add 220 additional shops at Macy's stores in the coming year.

The company's Winner's Circle loyalty program has been another driver of success lately, allowing The Finish Line to directly market to more than 9 million loyalty members. More than 60% of total transactions came from loyalty members in fiscal 2014, up versus 53% in the previous year.

The Finish Line has acquired several specialized running companies like Boulder Running Company, Run On!, and Running Spot lately, and the company has positioned its Running Specialty Group business as a leader in an attractively growing category.

This is clearly producing solid results for shareholders, judging by recent financial performance.

Firing on all cylinders
Sales in the fourth quarter of fiscal 2014 -- ended on March 1 -- increased by 17.2% to $518.9 million. This was a bit below analyst estimates of $529.3 million, but same-store sales were particularly strong with an increase of 6.3% versus the same quarter in the prior year.

Non-GAAP net income per share, which excludes the impact of impairment charges and the gain on the sale of an investment, increased 14.5% versus the prior year, while GAAP net income per share grew by 26.1% to $0.87. This was above analyst forecasts of $0.85 per share.

For the coming year, management expects comparable-store sales to grow in the mid-single digits and earnings per share to increase in the high-single to low double-digit range over fiscal 2014.

Chairman and CEO Glenn Lyon sounded pleased with the company's performance in the press release, and he provided an optimistic vision of the future for The Finish Line:

The successful execution of our consumer centric omni-channel strategy drove solid gains in our core business while growth initiatives contributed meaningfully to our record full year revenue and profits. We have a clear vision for building on our strong market position through innovative product, superior service, and effective consumer engagements. With that vision and our strong team, we move forward optimistic about our near and long-term growth prospects.

Outpacing the competition
Foot Locker is reporting solid performance, but the company is not growing as quickly as The Finish Line. Foot Locker reported an increase of 4.6% in sales during the fourth quarter of 2013 to $1.8 billion. Comparable-store sales during the quarter increased by 5.3%, and earnings per share grew by a strong 19% annually thanks to higher margins and a reduced share count.

The same goes for Dick's Sporting Goods, which reported better-than-expected sales and earnings for the quarter ended on February 1. Sales adjusted by the extra week in 2012 grew by 12.5% to $1.9 billion, fueled by a big increase of 7% in adjusted in comparable-store sales. Earnings per share came in at $1.11 during the 13 weeks period, an 8% increase versus earnings per share during the 14 weeks period in the prior year. 

Cabela's, on the other hand, disappointed investors when it reported earnings for the fourth quarter of 2013. Total adjusted revenues increased 4.9% to $1.19 billion, but comparable-store sales declined by 10.9% during the period, management attributed the decline to a tough yearly comparison on ammunition sales and a softer-than-expected holiday season.

Hibbett Sports also delivered disappointing financial performance for the fourth quarter of its fiscal 2014, ended on February 1. Net sales were almost flat with a 0.2% increase to $217.6 million, and earnings per share declined to $0.64 during the quarter, compared with $0.73 in the same quarter of the prior year.

Bottom line
In a challenging and competitive industry like sports shoes and apparel retail, The Finish Line is not only doing remarkably well but also clearly outperforming the competition. This says a lot about the company's management team and its strategic direction.

Six stock picks poised for incredible growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Andrés Cardenal has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers