Finish Line Earnings: An Early Look
Earnings season is just about over, with almost all companies already having reported their quarterly results. But there are still a few companies left to report, and Finish Line is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Finish Line isn't the biggest player in the athletic shoe and apparel industry, but it nevertheless has sought to take advantage of the big growth in the area over the past several years. Let's take an early look at what's been happening with Finish Line over the past quarter and what we're likely to see in its quarterly report on Thursday.
Stats on Finish Line
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Will Finish Line finish strong this quarter?
Analysts have cut their views on Finish Line over the past few months, slicing $0.08 per share off their earnings estimates for the most-recent quarter and $0.26 per share on their full-year fiscal 2014 calls. The stock has similarly languished, falling about 3% since late December despite the stock market's overall strength.
The demand for athletic apparel has risen sharply in recent years, as new players among apparel- and shoemakers have forced established giants to up their game. Nike continues to dominate the athletic footwear industry, but Under Armour has challenged the company on the apparel side of the business and more recently has gone heads-up against Nike with its own shoes. That buzz has helped increase awareness of athletic specialty products generally.
But the big problem is that the most successful brands have made moves to distribute their goods through their own stores rather than via independent specialty retailers. Both Nike and Under Armour distribute through third parties, but both companies have networks of factory outlets and specialty stores that allow them to keep more of their profits. Although rival Foot Locker has done a fairly good job of keeping its stock moving higher over the long run, in part because of its emphasis on highly popular basketball shoes, Finish Line has struggled under the threat of competition and sluggishness in running-shoe demand.
In response, Finish Line has been working with Macy's to create a store-within-a-store concept. But some analysts are skeptical about whether the move will do more harm than good as it saps Finish Line's status as an independent retailer.
In its quarterly report, watch for Finish Line to address how it intends to integrate its various business elements into a coherent strategy. Without a solid plan, it's hard to see Finish Line finishing well despite the industry's favorable tailwinds.
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
Click here to add Finish Line to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
The article Finish Line Earnings: An Early Look originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends and owns shares of Nike and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.