As Finish Line Inc (NASDAQ: FINL) is getting ready for announcing its first quarter financial numbers on June 24, Barclays previewed its earnings. The brokerage has an Equal-Weight rating with a price objective of $18.
"We are decreasing our 1Q17 EPS estimates to $0.23 from $0.28 to reflect the expected cadence of supply chain costs: For 1Q17, we expect costs to rise as the company works to fix its supply chain to get back to historical fulfillment levels. The company expects to incur an additional $4.0 million to $5.0 million of incremental SG&A in the first half of the year from these changes. By product category, our channel checks indicate strong performance in running," wrote Barclays analyst Matthew McClintock in a note.
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The brokerage believes that though Finish Line has been successful with its Macy's (NYSE: M) business as it gained from its repositioning, as well as expansion tactic, weak mall traffic trends could potentially prove to be less of a catalyst during the quarter.
Barclays pointed out that the company expects to close 25 unproductive stores, open five to seven and remodel 60 to 70 in the fiscal year 2017. The investment advisor also noted that Finish Line launched this new remodeling program in its last earnings call. The program called for stores with a more modern design, which would concentrate on brand presence by enhancing merchandise presentations and storytelling.
However, the brokerage expects Finish Line to be better positioned in the second half of the fiscal year 2017 but remains "on the sidelines given unproven operational efficacy compared to that of its peers."
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.