Finishline:

Finish Line Inc. (FINL) swung to a surprise fiscal third-quarter profit as the athletic outfitter recorded a tax benefit as well as improved margins.

The company's shares were up 7.5% at $10.75 in after-hours trading, as Finish Line's better-than-expected results ended a four-quarter streak of losses. The company's stock price has grown about three-quarters this year.

"In the third quarter, we effectively controlled expenses, managed inventories and improved store execution," said Chief Executive Glenn Lyon. "We also continued to work productively with our vendor partners to stress innovation in product, consistent with our ongoing premium position."

Finish Line has slashed costs, narrowed its inventory to focus on more premium brands and revamped its e-commerce business to bolster online sales.

For the quarter ended Nov. 28, Finish Line reported a profit of $6.6 million, or 12 cents a share, compared with a year-earlier loss of $8.8 million, or 16 cents a share. The latest results included a $6.5 million tax benefit, while the prior year's results included expenses tied to the terminated merger with Genesco Inc. (GCO).

Revenue fell 0.2% to $240.1 million although same-store sales increased 1.7%.


Analysts surveyed by Thomson Reuters expected a loss of 9 cents on revenue of $234 million.

Gross margin improved to 29.5% from 27%, as inventories declined 11% on a square-foot basis.

Last month, larger rival Foot Locker Inc. (FL) reported it swung to a fiscal third-quarter loss as larger write-downs and weakness in U.S. sales hurt the bottom line.