The Finish Line expects e-commerce sales to grow 20% by 2017
July 2, 2013 04:47 PM
The Finish Line Inc. had double-digit sales growth in the first quarter and executives expect e-commerce to contribute 20% of total sales by 2017.
For the first quarter of fiscal 2014 ended June 1, The Finish Line, No. 151 in Internet Retailer’s 2013 Top 500 Guide, reported:
- Total sales of $351.1 million, an increase of 10.0% from $319.0 million in the prior-year period.
- E-commerce represented 12.4% of total sales for the quarter and increased by 11% compared with the same period last year, Edward Wilhelm, chief financial officer and executive vice president told Wall Street analysts on the company’s first quarter earnings call last week. Based on that data, web sales were $43.5 million, up from $39.2 million in the first quarter of fiscal 2013.
- Comparable-store sales increased 2.4%.
- Net income of $4.5 million, down by 62.8% from $12.1 million in the first quarter last year.
First quarter earnings foreshadow near-term performance for the athletic shoes and apparel retail chain. “By the end of fiscal 2017 we expect to hit $2.2 billion in sales,” Wilhelm told analysts, according to a transcript of the call from Seeking Alpha. “This will be achieved through mid-single-digit growth in our core Finish Line business, with digital revenue growing in the low 20% range and store revenue increasing low single-digits.”
In 2012 The Finish Line reached an agreement with department store chain Macy's Inc. to sell its athletic shoes in Finish Line-branded shops in more than 450 Macy's stores, and to sell its products on Macys.com. The Macy’s shops began rolling out in the first quarter and the online business launched in May. The Finish Line expects the Macy's business to generate revenue of $250 million by 2017, Wilhelm said.
The Finish Line plans to drive further e-commerce growth by web site and technology upgrades this year and next, Wilhelm said. Examples of web site improvements coming this year include a streamlined in-store pick-up process and improved product search filtering and site navigation, a company spokeswoman said.
A new e-commerce platform will be chosen this year for implementation in fiscal 2015, the spokeswoman said.
An ill-fated attempt to implement new e-commerce technology in November 2012 cost The Finish Line $3 million in third quarter sales last year, chairman and CEO Glenn Lyon said in January. Site performance problems drove the merchant’s decision to revert to its previous site, he said, but did not elaborate on the performance issues.
Lyon did not name the vendor that provided the new platform, but last November the company issued a press release announcing the relaunch of its site using services from e-commerce platform provider Demandware Inc. and digital marketing agency Big Spaceship.