Piper Jaffray Throws In The Towel On 'Value Trap' Finish Line

Analyst Erinn Murphy explained that Finish Line’s execution has been “faulty,” and the company “continues to lag the industry in terms of procuring in-demand product.”

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The Customers, Their Preferences And The Finish Line

Piper Jaffray’s proprietary indicated that the consumer is continuing to shift to the online mode, with only 1 percent of athletes preferring to shop at mall-based retailers, down from 5 percent in the same period in 2014.

Although Finish Line caters more to fashion than performance consumers, 27 percent preferred shopping online, up from 24 percent in the same period in 2014.

Brick and mortar accounts for 70 percent of the company’s sales at present across 620 stores, with online only accounting for 14 percent of sales.

In addition, Finish Line has indicated during the previous quarter that it intended to start rebranding its “individual store/fleet monikers to JackRabbit over the next two years, adopting the name of a NY store chain acquired back in March.”

Murphy expressed concern that rebranding might disrupt the local feel of the chain, which pure performance runner appear to favor.

The EPS estimates for Q3, FY2016 and FY2017 have been lowered from ($0.01) to ($0.04), $1.72 to $1.70 and $1.82 to $1.69, respectively.

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