Market Overview

Back-To-School Season Won't Save Finish Line

Share:
Back-To-School Season Won't Save Finish Line

Things are rough right now for athletic retailers, and a rush from back-to-school shopping is unlikely to save them.

Sports industry analyst Matt Powell of NPD Group previously told Benzinga that this back-to-school season was the most promotional he has seen in 20 years.

Finish Line Inc (NASDAQ: FINL) shares plummeted nearly 20 percent on Tuesday after reporting dismal preliminary second-quarter results and slashed third-quarter guidance.

The share price drop was similar to the one competitor Foot Locker, Inc. (NYSE: FL) saw, after reporting a weary second quarter of their own two weeks ago.

Given the challenging outlook for the industry, Bank of America analyst Robert Ohmes cut F2018 EPS estimates in more than half, from $1.05 to 50 cents. The F2019 EPS was also brought down from 65 cents to $1.20.

Nike Inc (NYSE: NKE) fall from grace is certainly troubling for Finish Line, the brand accounted for a stunning 71 percent of store revenues in 2016. Ohmes does not see Nike returning to healthy growth for at least 12 months and also highlighted weakness in the Jordan brand. When Nike does return to growth, it likely may be due to its improved focus on direct to consumer buying, rather than through its traditional retail partners. 

“We see risk that Finish Line’s comps will remain negative through 2017 and into 2018,” said Ohmes.

Bank of America reiterated an Underperform rating on Finish Line while lowered its price objective from $10 to $8.

Related Links:

Dick's Sporting Goods Hit With A Slew Of Downgrades After Record Drop

Finish Line's Quarterly Pre-Announcement Complicates Footwear Story As Analysts Revisit Sector

Latest Ratings for FINL

DateFirmActionFromTo
Jun 2018TerminatesNeutralNeutral
Jun 2018TerminatesMarket PerformMarket Perform
Mar 2018UpgradesSellNeutral

View More Analyst Ratings for FINL
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings News Guidance Sports Analyst Ratings Movers General Best of Benzinga

 

Related Articles (FINL + FL)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
HSKACanaccord GenuityMaintains75.0
AVGOMorgan StanleyMaintains265.0
AMATNeedhamMaintains56.0
VOYACitigroupMaintains62.0
VCCitigroupMaintains86.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Rockwell Collins Higher Off Renewed Takeover Speculation

Here's Why The Euro Is On Fire