The 10-second takeaway
For the quarter ending Nov. 26 (Q3), Finish Line beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded, and earnings per share improved significantly.
Margins grew across the board.
Finish Line logged revenue of $332 million. The 10 analysts polled by S&P Capital IQ foresaw a top line of $321 million. Sales were 8.1% higher than the prior-year quarter's $301 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.39. The 11 earnings estimates compiled by S&P Capital IQ averaged $0.38 per share on the same basis. GAAP EPS of $0.11 for Q2 were 38% higher than the prior-year quarter's $0.08 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 32.3%, 90 basis points better than the prior-year quarter. Operating margin was 2.8%, 30 basis points better than the prior-year quarter. Net margin was 2%, 40 basis points better than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $273 million. On the bottom line, the average EPS estimate is $0.11.
Next year's average estimate for revenue is $1.3 billion. The average EPS estimate is $1.58.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 181 members out of 290 rating the stock outperform, and 109 members rating it underperform. Among 100 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 52 give Finish Line a green thumbs-up, and 48 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Finish Line is to buy, with an average price target of $26.13.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.