UPDATE: Finish Line Shares Tumble After Downbeat Q2 Results

Shares of The Finish Line

dropped more than 11% in pre-market trading after the company reported weaker-than-expected fiscal second-quarter earnings. The Indianapolis, Indiana-based company posted quarterly earnings of $26.2 million, compared to $26.5 million, in the year-ago quarter. Its per-share earnings came in flat at $0.54. Its sales increased 7.1% to $466.90 million. However, analysts were projecting earnings of $0.60 per share on revenue of $477.61 million. Finish Line's same-store sales rose 1.5% in the quarter. Finish Line's gross margin narrowed to 33.2% from 33.6%, while selling, general and administrative expenses surged 8.2% to $111.9 million. Its cost of sales gained 7.6% to $311.8 million. Finish Line repurchased 133,333 shares of its common stock in the quarter. As of August 30, 2014, Finish Line had no interest-bearing debt and $190.6 million in cash and cash equivalents. As of August 30, 2014, the company's consolidated merchandise inventories rose 11.5% to $329.9 million, versus $296.0 million as of August 31, 2013. “Our second quarter results fell short of our expectations due to softness within elements of our basketball offering while our running business was up mid single digits driven by casual and performance styles,” said Glenn Lyon, Chairman and Chief Executive Officer. The company affirmed its earnings forecast for the year. Finish Line's shares dipped 11.22% to $26.11 in pre-market trading.