See what I did there with that headline? Clever.
I was catching up on my retail news (pretty much all of which seems to be bad these days) and came across this gem, the Finish Line Earnings Call Transcript from Seeking Alpha.
As usual, bold text is from the call or a close interpretation of it. Italics are our commentary.
Sam Sato – Finish Line’s CEO
As we previously announced, the second quarter was more challenging than we expected as the market plays for athletic footwear became much more promotional in July and August. This put pressure on sales and gross margins leading to earnings per share that were well below planned.
Sales down almost 4% and GMs down 390 bps. I respect Sam going with the band-aid approach here, just rip it right off. No sense in beating around the bush.
Side Note: Based on a rigorous analysis performed by me, I thought Finish Line would be killing it. The issue is that by “rigorous analysis” what I meant was, I scrolled through my Facebook news feed to see who was talking about running. Apparently, if you’re a runner, you’re obligated to let everyone know about it ad nauseam.
As reflected in our revised guidance for fiscal 2018, we expect sales and margin trends to remain difficult throughout the remainder of the year. In light of the current environment, we’ll continue to prioritize disciplined expense and inventory management
Things will continue to suck, but we’ll make numbers look better by reducing store labor (which kills customer experience btw) and run our inventory as lean as we can (which also tends to have a negative impact on CX)
Starting with digital….. It’s about speed, search optimization and a smooth checkout that will improve the customer’s ability to convert. We will be rolling out enhancements that support our customer’s expectations such as improvements to page load speed, checkout flow, and cross-device usability. Customers can now easily track their packages and receive notification of package delivery.
These are pretty good ideas, do you guys also support dial-up? Like all of these are wonderful updates…if it was 2007. I don’t understand how you don’t already have digital capabilities like order tracking?
These stores also introduced a unique way to try on footwear using our shoe-eye-view mirror. This new experience enables customers to see their footwear superimposed into unique environments like the streets of New York City or a basketball court and share it with all their friends on Social Media. No longer is the store environment only about the transactions, it’s about being memorable and shareable.
#1 shoe-eye-view mirror is just an awful name. 2nd…Unless I’m misreading this here, the shoe-eye-view mirror (I hate it so much, why do I keep typing it?) is just a code name for “picture”. Right? Like, I can see a picture of the shoe I want to get, not on my foot, but somewhere else.
#2 “stores aren’t only about transactions”? Have you seen your sales? Apparently, your stores aren’t for transactions either. #burn. And finally, “memorable and shareable” trying so hard to be hip it hurts.
We are also increasing the availability and penetration of kids which is now offered in approximately 286 stores.
Oh man this is such a softball for me so many options on where I could go with it….I mean….not quite an adjacent category to footwear, but desperate times call for desperate measures…right?
CEO in response to a question about whether they would have issues selling some of the higher prices basketball shoes: And then second, quite candidly, in basketball shoes when you’ve got from a technological perspective something that is as innovative and new as that; it can command the higher prices and the consumer will react positively to that.
“Technology” sureeeeeeeee. All these guys want Air Jordans for the technology.Analyst asking why forecasted comps are so bad even though the CEO said before the call that they are working on some big things to drive growth:
Can you just give us a little more detail around the work that you’re doing with the vendors that have you optimistic; so that we too can share that optimism?
Translation:We don’t believe you, please explain