Days after Finish Line Inc (NASDAQ:FINL), the U.S. athletic footwear company, revealed that it would be acquired by the London-based JD Sports Fashion PLC (LON:JD), its fourth-quarter earnings missed Wall Street analysts’ estimates Thursday.
Shares in Finish Line fell 2.7% to US$13.52 in morning trading after the group said it fell short of analysts’ estimates by US$0.17 and reported net income of US$16.3mln, or US$0.40 per share, in the three months ending March 3, up from a loss of US$9.5mln or US$0.23 per share.
Sam Sato, Finish Line’s chief executive, described fourth-quarter sales as “more challenging than we expected.”
Earlier this week, JD Sports Fashion, a dominant player in the UK retail market, agreed to buy Finish Line for US$558mln as part of a global expansion plan.
Shareholders in Finish Line will receive US$13.50 per share in cash.
JD Sports said the acquisition offers the company “the opportunity to expand its market leading elevated proposition into the most significant global market.” It will fund the deal through a revolving credit facility and a new asset-backed lending facility secured against Finish Line’s inventory and receivables.
Finish Line trades from 556 of its own branded retail stores across 44 US states and Puerto Rico. It also operates 375 branded and 188 unbranded concessions within Macy’s stores as the department store chain’s exclusive retailer of athletic shoes, both in-store and online.