Finish Line Reports Impressive 3Q According to Citi

Citigroup has published a research report on Finish Line Inc. FINL after 3Q revenues impress and exceed expectations. In the report, Citigroup writes "FINL's 3Q EPS was $0.08 (vs. our $0.07 and street's $0.05) on better sales (+5c, +10.1% comp vs. our +5% estimate and vs. LY's +1.7%), gross margin (+4c, +184bps vs. our +46bps estimate), partially offset by higher SG&A (-8c, +6.3% vs. our –MSD estimate). Note, NPD's Athletic Specialty grew +14% during same period. Overall inventories +10.4% and on PSF were +13% (vs. LY's -11%). Current inventories are indeed running higher vs. 3Q's +10.1% comp & our likely comp forecast but look better on a 2-yr PSF stack (~+2%). We believe inventories are probably well planned and likely built in order to meet future demand but will need to determine if FINL has appropriate mix/level relative to expectations/performance." Citigroup maintains its Buy rating and $21 price target. The Finish Line Inc. closed yesterday at $18.79.