Under Armour said revenue growth was only going to rise 20% in 2017 and 2018 compared to groth rates in the high 20s an low 30s over the last several years. They gave some optimistic revenue targets for 2018 at $7.5 billion but warned that profits would miss by $800 million. This caused a ripple in the retail shoe industry.
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FINL - Finish Line - Company Profile
The Finish Line, Inc., operates as a specialty retailer of athletic shoes, apparel, and accessories in the United States. It operates in two divisions, the Finish Line and JackRabbit. The company's Finish Line division engages in the in-store and online retail of athletic shoes for Macy's Retail Holdings, Inc.; Macy's Puerto Rico, Inc.; and Macys.com, Inc., as well as online at macys.com. This division offers men's, women's, and kids' athletic shoes, as well as an assortment of accessories of Nike, Skechers, Converse, Puma, New Balance, Adidas, and other brands. As of April 2, 2016, the company operated Finish Line shops in 392 Macy's department stores in 37 states in the United States, the District of Columbia, and Puerto Rico. Its JackRabbit division retails lifestyle products, such as running shoes, apparel, and accessories of Brooks, Asics, Nike, Saucony, New Balance, and other brands. It also operates the e-commerce sites jackrabbit.com and boulderrunningcompany.com. The company operated 72 JackRabbit stores in 17 states in the United States and the District of Columbia. Company description from FinViz.com.
The Under Armour warning of slowing sales growth and weaker profits may not hamper Finish Line directly but it is a warning for the industry in general. The ever rising price of shoes and the rising cast of star endorsements means more shoe models and more buyer confusion. The high dollar shoe market may be about to tank.
Finish Line has fallen from $24 to $20 over the last month and the UA warning only added to the stock's decline. Earnings are not until December 23rd so the stock has a long time before it can prove the naysayers wrong. Support is $17.
With a FINL trade at $19.50
Sell short FINL shares, initial stop loss $20.65, target = $17.