Baird Equity Research analysts Jonathan Komp and Benjamin Bray believe enhancements in comps are likely to hold steady for Finish Line Inc FINL. The brokerage has a Neutral rating on the company's shares. The two analysts highlighted several read-throughs from the earnings call for the first quarter.
Baird thinks most of Finish Line's categories and brand commentary were in line with the latest indications from different sources. The two analysts viewed the monthly comps cadence as a possible favorable indicator, while the company was positive on creating momentum for its franchises to help brand manage the short-term product cycle in respect of softness.
The brokerage highlighted four factors. The first one was Baird sees improvement in the second quarter regarding comps, despite the mildly disappointing q1 figures. The second is the commentary on category performance, which is in line with other indicators. The third factor is the brand commentary, which the analysts categorized as not surprising. The final factor is the projected increase of 1–3 percent in ASPs compared to the flat trend witnessed in the first quarter.
The analysts elaborated, "Despite some category shift impacts and shorter-term discounting to work down inventory (in FQ1 and expected in FQ2) for FINL, management still expects full-year average selling prices +1–3 percent with an improvement in full-priced selling representing a meaningful tailwind."
The brokerage also pointed out that Finish Line spoke favorably on establishing momentum for the free running platform as an incremental positive update and running innovation heading into the Olympics.
At time of writing, Finish Line shares were down 4.03 percent on the day, trading at $19.62.
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