Finish Line In 1976 two friends named David Klapper and Alan Cohen paired together to run a franchise that would come to be known as the Athlete’s Foot. Athlete’s Foot was a large athletic footwear business. By 1981 Klapper and Cohen’s vision grew larger than what the Athlete’s Foot franchise was able to contain. In this year Klapper and Cohen decided to open their own franchise as a spin off of the Athlete’s Foot; they named it Finish Line.
Cohen and Klapper were phenomenal businessmen, but they needed help getting started.In 1981 they added two more partners named Larry Sablosky and Dave Fagin. This year, 1981, was the grand opening year of Finish Line. When Finish Line had first opened Klapper and Cohen still owned ten Athlete's Foot stores. In 1986 Klapper and Cohen’s Athlete’s Foot franchises were due to expire.
After the expiration Klapper and Cohen then converted all of the Athlete's Foot stores that they had previously owned into Finish Line stores in 1986 when their franchises expired. Finish Line has had a lot of success in its lifetime.Leaders of the company say that this can be attributed to many things, such as: superior executive leadership, structured growth, great knowledge of the athletic industry, and great following of a well thought out mission. Their mission statement is clear and concise about what they will provide and attain to do and be. This mission states, "Finish Line will provide the best selection of sport inspired footwear, apparel and accessories to fit the fast culture of action addicted individuals. " Finish Line executes this plan with now more than 11,500 employees, the main headquarters being located in Indianapolis, Indiana.
Finish Line’s products have expanded significantly since its beginning. They are known for their wall of shoes which could have between 600 and 1,300 different kinds of athletic footwear. These include running, basketball, aerobics, gym, walking, hiking, cross-training, cleats, skate shoes, sandals, and casual shoes. Brands that are sold by Finish Line include, but are not limited to: New Balance, Adidas, Nike, Jordan, Converse, Puma, Lacoste, Saucony, Under Armour, Pastry, Brooks, Asics, Skechers, Oakley, The North Face, Timberland, K-Swiss, and Baby Phat.From 1986 on, Finish Line obtained a series of company milestones year after year that expanded the franchise to what it has become today.
In October of 1991 Finish Line opened their 100th store; most were in the mid-west region of the United States. In 1992 Finish Line became a publicly traded company; it trades on the NASDAQ with the ticker symbol FINL. In November of 1997 they opened their 300th store. In July of 1999 they recorded their first ever online sales.
In the year 2002 Finish Line became the second largest athletic retailer based solely on sales revenues.They had also expanded the company to a whopping 600 Finish Line stores at this point. In 2005 Finish Line acquired the urban clothing retailer Man Alive, obtaining 37 stores in the Midwest. They then opened more than 60 stores in the next year alone. In 2006 Finish Line opened a division called Paiva which targeted upscale, active women; they opened 15 stores around the United States.
Then in 2007 Finish Line outbid rival Foot Lockers for Genesco; Genesco operates Lids, Hat World, Johnston and Murphy, and Journeys.It is difficult to compare trends and analyze the financial statements of Finish Line compared to competitors because most other athletic retailers sell sporting goods in addition to clothing and footwear, where Finish Line does not sell sporting goods. However, there is one other company that is worthy of comparison; that company if Footlocker. Footlocker dominates over 30% of the athletic shoe retailing industry's market share, compared to Finish Line’s 7. 3% market share.
Finish Line’s market share in athletic shoe retailing may seem minute compared to that of Footlocker’s, but it is actually the second highest market share in the industry. Finish Line also competes with sporting goods retailers such as The Sports Authority, Dick’s Sporting Goods, and Big 5, who sell sporting goods and other products in addition to athletic footwear. The U. S.
retail footwear market rose only 0. 3% from 2007 to 2008. This increase was $46. 6 billion in 2007 to $46. 8 billion in 2008. That amount accounted for 24% of the global market that year.
The U. S. etail footwear market saw even greater gains in earlier years. During the boom years of the U.
S. economy from 2005 to 2006, there were 10% gains which added $4 billion in market value to the U. S. market.
From 2004 to 2008 the U. S. retail footwear market grew at a CAGR of three percent. Our poor current economic conditions are causing consumers to be thriftier in their shopping habits.
There is no doubt that this has hurt the retail footwear market. In the quarter ending February 27, 2010 Finish Line’s net sales fell 1. 8% to $1. 17 billion. Comparable stores sales decreased by 0. %, which was offset by a 21.
3% increase in online sales. Store traffic decreased by approximately 7%; the company attributed this decline to the sluggish economy. Net income increased by 67% to $50. 8 million, the product margin increased by 1. 1%, and SG;A expenses decreased by 4. 7%.
Finish Line opened five stores and closed 28 during the year. They plan to open about ten new stores, and to close about 25 stores in 2011. Although it is impossible to know for sure what the future of the U. S. retail footwear market is going to be like in the future, one can make educated predictions.I think that the market is going to increase in the near future as we pull ourselves out of the current recession.
However, in the long run I think the result will be the opposite. The market for specialized U. S. footwear retailers like Finish Line and Footlocker are going to shrink a considerable amount, and maybe even cease to exist in the upcoming years. This is because the larger retailers that sell goods other than athletic footwear are going to take control. Wal-mart, Kohl’s, Target, all of these stores have the power and the capital necessary to control the athletic footwear market in the U.
S.They will be able to buy at lower prices, sell at lower prices, they have more money for marketing and advertising, and are already trusted by so many consumers of their existing products. Just like every other retailer, Finish Line has to anticipate fashion trends and seasonal fluctuations in its choices of inventory. Twelve weeks during the late summer, from late July to early September, and the days between Thanksgiving and Christmas, account for about one-third of the company's earnings.
The increase in their sales during the late summer period is because many kids are buying sneakers and athletic gear for their upcoming school year.The increase between Thanksgiving and Christmas is because people are buying gifts, or treating themselves to new products for the holidays. Finish Line now has about 250 shareholders holding around 55,000,000 shares. The last closing stock price was $20.
41. One year ago the stock price closed at $16. 50, so it has risen $3. 91 over the past year.
The Dividend Yield was . 97% and the Dividends per Share was On the income statement for FINL as of February 28, 2011, Sales Revenue was $1,229,000,000, COGS was $815,100,000, EBIT was $111,200,000, Net Income was $68,900,000, and Earnings Per Share was 1. 3.The balance sheet showed that the Cash and Short-Term Investors add up to $229,300,000, Accounts Receivable was $10,600,000, Inventory was $193,500,000, Total Current Assets was $509,700,000, and Total Assets was $669,900,000. Total Current Liabilities was $126,400,000, Total Liabilities was $179,600,000, Total Shareholder Equity was $490,200,000, and Liabilities and Shareholder Equity was $669,900,000. According to Finish Line’s cash flows from February 28, 2011 Net Operating Cash Flow was $108,600,000, Net Investing Cash Flow was $-19,600,000, Net Financing Cash Flow was $-24,100,000, and the Free Cash Flow was $80,900,000.
Ratios are very useful when judging a company’s performance. The Current Ratio was 4. 03, the Quick Ratio was 2. 5, the Net Profit Margin was 5.
6%, the Return on Assets was 10. 7%, the Return on Equity was 14. 8%, and the Price-Earnings Ratio was 13. 6.
They do not have short-term or long-term debt. Finish Line works very strategically and does a very good job of implementing all of their new ideas. I believe that Finish Line has an edge over other retailers with its strategy and discipline. They are always looking to improve their company, a great thing for shareholders.After analyzing the Finish Line Corporation I find that their current position is strong. Finish Line has done a great job of setting the bar for the industry, and I am confident that they will keep going in the right direction.
If I had a say, I would suggest that they continue with their current growth strategy. They should continue with their financial objectives for financial stability, maybe using stock repurchases, and focus on increasing the Blue Label brand awareness. If I had $1,000 I would definitely invest in this company.Its stock has been rising, its ratios represent ratios of a healthy and successful company with room for improvement, and it is almost Christmas, the best revenue period of the year. Key Efficiency Ratios Efficiency| 2002-02| 2003-02| 2004-02| 2005-02| 2006-02| 2007-02| 2008-02| 2009-02| 2010-02| 2011-02| TTM| | Days Sales Outstanding| 1.
48| 1. 95| 2. 24| 4. 45| 3. 67| 3.
39| 2. 94| 1. 43| 1. 35| 2.
13| 1. 65| | Days Inventory| 103. 13| 101. 18| 93.
34| 110. 34| 103. 99| 108. 23| 111.
96| 98. 59| 98. 96| 86. 07| 97. 47| | Payables Period| 37. 45| 35.
56| 29. 51| 42. 25| 35. 98| 32.
64| 29. 70| 26. 3| 28. 68| 29.
80| 43. 89| | Cash Conversion Cycle| 67. 16| 67. 56| 66.
07| 72. 54| 71. 68| 78. 98| 85. 20| 73.
49| 71. 63| 58. 40| 55. 23| | Receivables Turnover| 246.
24| 187. 53| 162. 76| 81. 99| 99. 59| 107.
73| 124. 05| 256. 04| 269. 61| 171. 66| 221. 31| | Inventory Turnover| 3.
54| 3. 61| 3. 91| 3. 31| 3. 51| 3. 37| 3.
26| 3. 70| 3. 69| 4. 24| 3. 74| | Fixed Assets Turnover| 7.
57| 8. 15| 9. 07| 6. 20| 6. 38| 5.
71| 5. 49| 7. 29| 7. 59| 9. 37| 10.
18| | Asset Turnover| 2. 20| 2. 23| 2. 54| 2. 03| 2.
17| 2. 08| 1. 97| 2. 11| 1. 94| 1. 93| 1.
91| | | | | | | | | | | | | | | References www. cnbc. om www. bloomberg. com www.
usatoday. com www. standardandpoors. com www. fool.
com www. valueline. com http://en. wikipedia. org/wiki/Finish_Line,_Inc.
http://financials. morningstar. com/income-statement/is. html? t=FINL®ion=USA&culture=en-US http://www. hoovers. com/company/The_Finish_Line_Inc/rhkkki-1.
html http://moneycentral. msn. com/investor/invsub/results/statemnt. aspx? symbol=FINL http://search1. bloomberg.
com/search/? content_type=all&page=1&q=finl http://www. hoovers. com/company/The_Finish_Line_Inc/rhkkki-1-1njea5. html http://www.
wikinvest. com/stock/Finish_Line_(FINL)
