Finish Line's Big Q3 Earnings Miss And Concerning Guidance Has Shares Down 16%

Shares of Finish Line Inc FINL were trading lower by more than 16 percent early Thursday morning following the release of the company's third quarter results.

Finish Line reported that it lost $0.49 per share in the third quarter on revenue of $382.1 million. The company's top and bottom line missed Wall Street's estimate by a large margin as the Street was expecting a loss of $0.04 per share on revenue of $407.74 million.

Finish Line said that its third quarter comps fell 5.8 percent.

"Our third quarter performance was severely impacted by a disruption in our supply chain following the implementation of our new warehouse and order management system," said Glenn Lyon, Chairman and Chief Executive Officer of Finish Line. "Specifically, in October, we began experiencing issues flowing fresh inventory into our stores as well as fulfilling online orders as the new system was unable to process freight at volumes necessary to support our sales plans. We worked quickly to address the disruption in our system and improve our operating capabilities, increasing technical and operational resources including third party experts. We have achieved a pickup in sales trends as the quantity and quality of our inventory improved in recent weeks."

Outlook & Management Change

Finish Line also issued guidance and expects to earn $0.78 to $0.83 per share in the fourth quarter and earn $1.18 to $1.23 per share for the full year fiscal 2016.

Wall Street analysts were previously estimating the company to earn $0.91 per share in the fourth quarter and $1.74 per share for the full fiscal year.

Finish Line announced that its current President, Sam Sato, will succeed Lyon As Chief Executive Officer as of February 28.

Lyon will continue serving as Executive Chairman of Finish Line's Board of Directors and will transition to the title of non-Executive Chairman on January 1, 2017.

The stock recently traded at $15.40, down 16.7 percent.