Finish Line's Earnings Report Wasn't Very Good

Finish Line Inc's FINL second quarter results initially impressed investors on September 23 and the stock rose more than 5 percent. However, as the trading day progressed investors turned negative on the retailer and the stock gave up all of its gains and closed the day at $22.75 after opening at $23.56.

On Wednesday, the company provided its third quarter results and investor reaction to the report was made immediately clear: investors weren't in the least bit impressed.

Finish Line's stock plunged 15 percent to under $20 early Wednesday and was seen trading at $19.65 after the company said it lost $0.24 per share in the third quarter on revenue of $371.7 million. Wall Street analysts were expecting the company to lose just $0.18 per share on revenue of $411 million.

The top-and-bottom-line miss was acknowledged by Finish Line in the earnings report. CEO Sam Sato stated that management is disappointed the quarter's performance fell short of expectations. The executive attributed the quarter's poor performance to steep declines in apparel and accessories.

Finish Line did note an improvement of 33.2 percent in its Macy's business.

Note: Due to Finish Line's ongoing process to explore strategic alternatives for its Jack Rabbit business, the results of the segment have been reported within discontinued operations.

For the full fiscal year ending February 25, 2017, Finish Line expects its comparable store sales to be as high as 1 percent and as low as flat. The company also expects to earn between $0.68 and $0.73 per share which is below Wall Street's expectations of $0.95 per share.