Sports chain Finish Line runs smack into a big loss

Runners may be slowing down -- at least when it comes to buying their sports apparel.

Declining growth in running-gear sales contributed to undermining Finish Line as the sports shoe and apparel retailer's third-quarter net loss nearly doubled to $40.4 million for the quarter ended Nov. 26, compared to the same period a year earlier.

Finish Line (FINL) acknowledged that the performance was underwhelming, and investors punished the company accordingly, driving its stock down 11.6% to $20.35 at 10:39 a.m.ET

The chain appears to be getting caught in a downturn of interest by runners that's affecting all retailers.

Industry-wide year-over-year sales growth for running gear has been slowing, notching 15.5% growth in August, 13% in September and 10.5% in October, according to SportsScan figures cited by Deutsche Bank.

"We are also concerned around slowing trends in running" dinging Finish Line, Deutsche Bank analyst Paul Trussell said in a November research note.

Sales at Finish Line stores open at least a year — a figure typically used to gauge a retailer's health — rose only 0.7%.

Blame "steep declines" in sports apparel and accessories, CEO Sam Sato said in a statement. That offset "high single-digit" gains in footwear sales, he said.

In its fiscal third quarter, Finish Line did not break out its running sales. But overall sales were up 3% to $371.7 million, falling well short of S&P Global Market Intelligence estimates of $411 million.

Fueling the uptick was 33.2% growth in Finish Line product sales at stores inside Macy's locations.

But the outlook remains tepid, despite attempts to bolster the bottom line by shuttering 150 underperforming stores earlier this year. Finish line projected full-year same-store sales growth of flat to up 1%, with fourth-quarter same-store sales projected to fall 3% to 5%.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.