Finish Line shares rebounded Friday after tumbling more than 11 percent at one point in early trading.
The athletic footwear market became “much more promotional” in July and August, which pressured the retailer’s second-quarter sales and gross margins, CEO Sam Sato told analysts and investors Friday. He said he expects Finish Line’s sales and margin trends to remain difficult for the rest of the year, but said he’s confident in the retailer’s long-term strategies.
Finish Lines shares were up more than 4 percent midafternoon Friday.
More than 70 percent of customer traffic has shifted to mobile, so Finish Line will focus on improving its digital capabilities, Sato said. Initiatives include making webpages load faster and allowing customers to return products directly from Finish Line’s website.
Finish Line already offers an app, but Sato said it will be updated to include in-store beacon and geofencing technology, which will connect customers’ digital and physical shopping experiences.
On the brick-and-mortar front, Finish Line has already started renovating stores to integrate technology. The company remodeled 10 stores during the quarter, Sato said. Going into the holiday season, that total will be around 90, said Chief Financial Officer Ed Wilhelm.
“While the retail environment remains challenging, particularly for athletic footwear, I am confident that the work we are doing to tightly control expenses and manage inventories, along with the initiative to drive traffic and conversion, will allow us to achieve our full-year guidance while also positioning the company for improved long-term results,” Sato said.
Finish Line reported a comparable sales decline — concerning to analysts and investors — of 4.5 percent during the second quarter. The retailer said it continues to expect same-store sales to fall between 3 to 5 percent for both the third and fourth quarters of 2017.
Quarterly net income came in at $2.8 million, or 7 cents per share, down from $22.1 million, or 53 cents a share, one year ago.
Revenue was $469.4 million, a drop of 3.3 percent from last year.
As of Thursday’s market close, Finish Line shares have fallen more than 60 percent over the past 12 months.
Earlier this year, the retailer’s stock plummeted after it trimmed its outlook for the full year amid disappointing sales volume.
Around that same time, the CEO of rival Dick’s Sporting Goods said that his sector of retail was in “panic mode.” The remarks immediately sent shock waves across the broader sporting goods space.
Shares of other sporting goods stocks, including Under Armour, Nike, Foot Locker, Hibbett Sports and Big 5 Sporting Goods, have all taken hits over the past few weeks, as negative sentiment around the industry grows.
The threat of Amazon, which continues to make competitive price cuts and ink deals with certain athletic and apparel brands, remains on every company’s mind.