Sterne Agee Maintains Price Target On Finish Line Despite Weak Quarter (FINL)

Sterne Agee is maintaining its $20 price target on shares of The Finish Line, Inc. FINL, despite company missing earnings estimates. It continues to rate shares at Buy. It is reducing earnings estimates on the stock though. In the research report, Sterne Agee writes, "5¢/6¢. SSS were +2% (vs. our 8% est) with June comps at +5.8%, July -4.1%, & August +3.3%. On a 2/3 yr basis, SSS decelerated ~1500/1200 bps, a disconcerting sign. Underlying analytics for SSS include a 3% decline in traffic, a 160 decline in conversion & a 6.4% increase in AURs. Softgoods & footwear comped ~2%. GPM expanded 121 bps $1.32 y/y & reflected both merch margin improvement (+60 bps) & occupancy leverage $1.41 (+60 bps). SG&A ($73M) declined 2.2% per ft2, & thereby levered ~148 bps y/y. Balance sheet remains pristine with sales/inv growth spread positive for the 14th consecutive quarter, $248M in net cash & working capital down 36% y/y." Shares of The Finish Line are flat in early Monday trading at $14.25.