Shares of Finish Line rose more than 20% on Friday—their biggest spike in more than seven years—after the embattled sports gear retailer beat first quarter expectations thanks in part to healthy sales of Adidas shoes, Bloomberg reports.
Finish Line's Q1 consolidated net sales rose 2.3% year over year to $453.5 million, missing analyst expectations of $567.9 million, and same-store sales rose 1.5%, down from 4.6% in Q4, but the company said it expects a 3% to 5% increase for the full year.
Finish Line posted diluted earnings of 23 cents per share (beating analyst expectations of 22 cents) on profit of $9.6 million, down from 30 cents per share and profit of $13.7 million year over year. Store closings contributed to that decline, the retailer said.
But Finish Line appears to be benefitting thanks in part to Adidas’ focus on its own comeback. The German sportswear maker has been especially successful of late with many of its shoe lines, including its City Socks and the return of its popular Sixties-era Gazelle sneaker, made popular in the Nineties by supermodel Kate Moss, who’s been tapped for the reboot as well. The Adidas Ultra Boost, Superstar, Stan Smith and NMD lines also have prospered in Finish Line stores.
“We continue to experience explosive growth in our Adidas business,” Finish Line CEO Sam Sato said on the company’s conference call with analysts. “The Adi brand itself has a ton of momentum. The excitement around that brand globally is very high, and it’s no different in the States.”
Finish Line in January announced plans to close up to a quarter of stores over the next few years following declining sales and supply chain disruptions.
“I’d say Finish Line is in the sights of failure,” Lee Peterson, executive vice president, brand, strategy and design at WD Partners, told Retail Dive earlier this year. “As an example, a while ago, Finish Line’s CEO [Glenn Lyon, replaced in January by Sato] moved to open a showroom store, but after the ideas went through the executive team, the concept came out the same as the current stores. That’s stagnation.”