Finish Line, Macy’s Strike Athletic Footwear Partnership

In Industry News, Marketing, What's New by Accessories StaffLeave a Comment

Indianapolis—Athletic footwear retailer The Finish Line has ended the week on an upbeat note this Friday. The 638+ unit retailer gave a better-than-expected full year earnings report on top of its beating analysts’ estimates on its second quarter earnings. Helping to fuel the growth is a disclosure today that Finish Line has partnered with Macy’s to become the department store’s exclusive athletic footwear partner with plans to open shops in 450 Macy’s stores, a partnership that could add $250 million to $350 million in sales to Finish Line in the long term.

According to Glenn Lyon, Finish Line’s chairman, the deal will make Finish Line the exclusive partner for men’s, women’s and kids athletic footwear and will expand its customer base.

“Macy’s large and profitable store portfolio, its customer base that is concentrated in a demographic that Finish Line has not penetrated to date, and most importantly, its customer-centric philosophy and omnichannel focus make them an ideal partner for us to broaden our reach beyond our bricks and mortar stores and our website,” Lyon added.

Both retailers said today that the leased departments that will be run by Finish Line and will start to be rolled out to Macy’s stores during next spring with the full rollout likely complete by the fall of 2014.

Macy’s says that about 225 stores that carry footwear will have their athletic footwear and inventory managed by Finish Line starting next spring. In addition, footwear selected by Finish Line will be added to Macy’s online next spring subject to signing a final online agreement.

“Finish Line is a widely recognized expert in athletic footwear for men, women, and kids including the best brands, newest technology and most current styles,” said Jeff Gennette, Macy’s chief merchandising officer. “We believe the enhanced footwear assortment they will bring to our customers at every full-line Macy’s store nationwide, as well as on, complements our rapidly developing offering of activewear merchandise.”

Finish Line Q2 Comp Sales Up 12.3%

In its fiscal second quarter report also released today, The Finish Line reported its net income and sales best analysts’ average estimate.

For the quarter ended Sept. 1, the footwear retailer reported net income increased 25.9% to $24.97 million, or 49 cents a share, from $20.9 million, or 39 cents a share in the second quarter last year.

Total sales increased 16.1% to $385.0 million compared with $332 million a year ago. Comparable store sale rose 12.3%.

Those results bested analysts’ consensus on earnings of 44 cents a share on sales of $358 million.

“Second quarter sales were driven by market share gains in running and basketball as we have been able to capitalize on recent trends in each category enabled by our strong relationships with both vendors and consumers,” said Lyon. “Importantly, we translated a 16% top-line increase into 26% earnings growth even as we make the necessary investments in order to successfully execute our omni-channel vision.”

Looking ahead, Finish Line forecast full year earnings 6% to 9% higher than last year, in the range of $1.62 to $1.68 a share. That’s ahead of analysts’ consensus for $1.66 a share. The company also forecast comparable store sales to increase 6% to 8%.

Lyon also pointed out that the store’s comparable sales online jumped 29.6%. Gross margin narrowed to 35%, down from 35.1% a year ago.




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