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Being a jock is cool. You have a rippling physique and all the hot chicks like to check you out. If you’re not a jock, at least you can look like one. Ever drive by a junior high school or a high school? All of today’s hormone charged young males are wearing some sort of sports jersey. It’s like this: “Hey ma, can I have 80 bucks, I need to buy a new Mariners jersey….Don’t you already have one of those?.....Yea, but I spilled salsa on it.”
Today I bought FINL (The Finish Line) at 27.13 and I will sell it in 4 to 6 weeks at 31.39. Here’s why I like FINL:
FINL’s stock price is up an astounding 274% in the last 52 weeks yet its PE is still a very modest 17.9. For those who love growth, FINL gives you a tremendous value.
FINL actually started out 25 years ago as a chain of 10 Athlete’s Foot stores in Indiana run by 2 dudes named Cohen and Klapper. These guys had visions of grandeur and wanted to expand out of the state of Indiana, but Athlete’s Foot was not licensed out of state. So they changed the name of the stores to The Finish Line and have since added 500 stores. Not bad guys, not bad at all. Obviously the Athete’s Foot has done well for themselves also. This is no coincidence since the 2 companies, with the same roots, probably share many operating philosophies.
With 5,000 foot stores, the Finish Line makes you feel like you’re walking into a big sporting event. This ain’t no foo foo boutique mall store. For example, Foot Locker stores average less than 1500 square feet. FINL even has some mega stores in the 15,000 sq ft range. Customers who like to think sports like to think big. Supersize those fries….Dallas Cowboy cheerleaders, etc. FINL has all the good stuff. Brand names offered by the Company include Nike, adidas, Reebok, New Balance, K-Swiss, And 1, Timberland, Asics, Saucony, Converse and Skechers. Finish Line can run BIG promotions with their big stores. It’s cool to hang out in a Finish Line store…or would you rather stand next to the ref with the pot belly inside Foot Locker??
FINL is further proof that the trend is your friend. Remember a few years ago when everyone stopped buying Nikes and were wearing Hush Puppies? Well, that trend reversed in a hurry. Sales numbers do not lie. Net sales increased 33% (thirty-three percent) to $270.8 million for the thirteen weeks ended August 30, 2003 (the "second quarter" or "Q2") compared to $204.3 million reported for the thirteen weeks last year ended August 31, 2002 ("Q2 LY"). Comparable store net sales increased 21% (twenty-one percent) for Q2.
Annual revenues have grown very steadily straight through the last 4 difficult years, from $523 million to $757 million. This is a 10% growth rate vs. the industry average of 5%. The great thing about retail is that once people tell you they like your stuff, and each of your stores is individually profitable, all you have to do is build new stores to grow your business. Keep cutting those cookies.
Here’s what the boss said: Mr. Cohen stated, "We are pleased to report a 93% increase in earnings for the second quarter of Fiscal 2004. The 21% gain in Q2 comparable store sales drove significant improvement in our financial performance as gross profit margin improved 220 basis points from Q2 LY, while SG&A expense also improved 180 basis points. Our strong sales performance in Q2 has continued through the first three weeks of September, and our inventory is positioned to support our anticipated sales growth in the third quarter." First Call expects earnings to grow from $1.58/share in 2004 to $1.83/share in 2005. With 21% increases in same store sales in Q2, there’s no question they will make these numbers. Historically, FINL has been right on with their numbers and this projected growth will really move its stock price.
Here’s the Big C again at the conference call: “On same-store sales:
COHEN: Comparable store net sales increased 21% on top of a 1% increase for Q2 last year. Q2 sales were driven by strong comparable store gains in both footwear and soft goods. Footwear comp store sales increased 18% while soft goods increased 38%, which is the fifth consecutive quarter with a double digit increase for soft goods.” The soft goods he is referring to are those sports jerseys and retro jerseys which sell for outrageous prices.
FINL has zero debt. ZERO…zip…nada. This gives them an opportunity for fueling future growth should they choose to use the, presently inexpensive, debt side of the capital markets and will enable them to grow quickly. For fiscal 2005, the company's initially new store opening plan calls for 60 new stores which equates to square footage growth of 8%. With these stores online, that would be 12% revenue growth without even capturing the increase in sales at each store.
The size emphasis for the new stores will remain in the 4500 square foot range. They look to go to Florida and California which are relatively untapped veins for them. Think Ahnold will pump them up??? Cohen thinkes so: “You know, we're opening stores and have been opening stores for a few years up and down the west coast. But again, when we speak of especially California there is a tremendous amount of opportunity for us to open additional stores and a little more insight into expansion.
Remember, the consumer throughout this whole recession and market downturn has continued to spend. It’s easy to find stocks that are benefiting from that trend. With more jing in their pockets, you’ll see more cool stuff being sold. At the end of the day, being a jock is cool.
I am HUGE!!
$$$MR. MARKET$$$
Today I bought FINL (The Finish Line) at 27.13 and I will sell it in 4 to 6 weeks at 31.39. Here’s why I like FINL:
FINL’s stock price is up an astounding 274% in the last 52 weeks yet its PE is still a very modest 17.9. For those who love growth, FINL gives you a tremendous value.
FINL actually started out 25 years ago as a chain of 10 Athlete’s Foot stores in Indiana run by 2 dudes named Cohen and Klapper. These guys had visions of grandeur and wanted to expand out of the state of Indiana, but Athlete’s Foot was not licensed out of state. So they changed the name of the stores to The Finish Line and have since added 500 stores. Not bad guys, not bad at all. Obviously the Athete’s Foot has done well for themselves also. This is no coincidence since the 2 companies, with the same roots, probably share many operating philosophies.
With 5,000 foot stores, the Finish Line makes you feel like you’re walking into a big sporting event. This ain’t no foo foo boutique mall store. For example, Foot Locker stores average less than 1500 square feet. FINL even has some mega stores in the 15,000 sq ft range. Customers who like to think sports like to think big. Supersize those fries….Dallas Cowboy cheerleaders, etc. FINL has all the good stuff. Brand names offered by the Company include Nike, adidas, Reebok, New Balance, K-Swiss, And 1, Timberland, Asics, Saucony, Converse and Skechers. Finish Line can run BIG promotions with their big stores. It’s cool to hang out in a Finish Line store…or would you rather stand next to the ref with the pot belly inside Foot Locker??
FINL is further proof that the trend is your friend. Remember a few years ago when everyone stopped buying Nikes and were wearing Hush Puppies? Well, that trend reversed in a hurry. Sales numbers do not lie. Net sales increased 33% (thirty-three percent) to $270.8 million for the thirteen weeks ended August 30, 2003 (the "second quarter" or "Q2") compared to $204.3 million reported for the thirteen weeks last year ended August 31, 2002 ("Q2 LY"). Comparable store net sales increased 21% (twenty-one percent) for Q2.
Annual revenues have grown very steadily straight through the last 4 difficult years, from $523 million to $757 million. This is a 10% growth rate vs. the industry average of 5%. The great thing about retail is that once people tell you they like your stuff, and each of your stores is individually profitable, all you have to do is build new stores to grow your business. Keep cutting those cookies.
Here’s what the boss said: Mr. Cohen stated, "We are pleased to report a 93% increase in earnings for the second quarter of Fiscal 2004. The 21% gain in Q2 comparable store sales drove significant improvement in our financial performance as gross profit margin improved 220 basis points from Q2 LY, while SG&A expense also improved 180 basis points. Our strong sales performance in Q2 has continued through the first three weeks of September, and our inventory is positioned to support our anticipated sales growth in the third quarter." First Call expects earnings to grow from $1.58/share in 2004 to $1.83/share in 2005. With 21% increases in same store sales in Q2, there’s no question they will make these numbers. Historically, FINL has been right on with their numbers and this projected growth will really move its stock price.
Here’s the Big C again at the conference call: “On same-store sales:
COHEN: Comparable store net sales increased 21% on top of a 1% increase for Q2 last year. Q2 sales were driven by strong comparable store gains in both footwear and soft goods. Footwear comp store sales increased 18% while soft goods increased 38%, which is the fifth consecutive quarter with a double digit increase for soft goods.” The soft goods he is referring to are those sports jerseys and retro jerseys which sell for outrageous prices.
FINL has zero debt. ZERO…zip…nada. This gives them an opportunity for fueling future growth should they choose to use the, presently inexpensive, debt side of the capital markets and will enable them to grow quickly. For fiscal 2005, the company's initially new store opening plan calls for 60 new stores which equates to square footage growth of 8%. With these stores online, that would be 12% revenue growth without even capturing the increase in sales at each store.
The size emphasis for the new stores will remain in the 4500 square foot range. They look to go to Florida and California which are relatively untapped veins for them. Think Ahnold will pump them up??? Cohen thinkes so: “You know, we're opening stores and have been opening stores for a few years up and down the west coast. But again, when we speak of especially California there is a tremendous amount of opportunity for us to open additional stores and a little more insight into expansion.
Remember, the consumer throughout this whole recession and market downturn has continued to spend. It’s easy to find stocks that are benefiting from that trend. With more jing in their pockets, you’ll see more cool stuff being sold. At the end of the day, being a jock is cool.
I am HUGE!!
$$$MR. MARKET$$$
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