Analyst sees earnings rising for Finish Line

Analyst predicts earnings growth for sports merchandise retailer Finish Line

• On 2:53 pm EDT, Friday September 25, 2009

NEW YORK (AP) -- Shares of The Finish Line Inc. jumped on Friday as an analyst said he expects the sporting goods retailer will post earnings growth for fiscal 2010.

On Thursday, Finish Line posted a second-quarter operating profit that matched Wall Street expectations even though revenue fell a steeper than expected 11 percent.

Its stock rose $1.12, or 12 percent, to $10.42 in afternoon trading Friday, as investors appeared encouraged by results amid a dismal spending environment.

Stifel Nicolaus & Co. analyst Thomas Shaw, who rates the stock "Buy," expects earnings to rise over the next fiscal year.

Shaw also said that gross margin was better than expected during the quarter.

In a statement, Chief Executive Glenn Lyon said the company controlled costs and tried to bolster its balance sheet.

Lyon also said its online business is growing. Internet sales rose 2.3 percent for the quarter and advanced 7.6 percent so far this year.

On a call with analysts, Lyon said he expects average selling prices to remain flat or slightly up for the rest of the year, based on strong merchandise quality.

"We take our markdowns on the poor selling products and we try and get full retail at the best selling items," he said.

The company operates 680 Finish Line stores nationwide.

Buzz up!