Fitness financials: New Saucony/Hind parent reports Q2 profit down 23 percent, plus Finish Line, Sears Holdings, Amer Sports, Hibbett Sports

Fitness financials: New Saucony/Hind parent reports Q2 profit down 23 percent. Finish Line evaluating options on Genesco acquisition, closing women's Paiva stores. Sears Q2 profit falls 40 percent. Amer Sports exercises 2003 warrants. Hibbett increases line of credit.

New Saucony/Hind parent reports Q2 profit down 23 percent

Collective Brands (NYSE: PSS), which changed its name from Payless ShoeSource earlier this month, said its fiscal second-quarter profit declined 23 percent from higher costs and lower sales. It is now the parent of the Hind and Saucony brands after recently acquiring their former-parent Stride Rite.

The holding company reported earning $24.9 million, or $0.38 per share, during the quarter ended Aug. 4. By comparison, the company earned $32.5 million, or $0.48 per share, during the same period a year ago.

Sales during the quarter decreased about 1 percent from $706.1 million to $699.3 million. Sales in stores open for at least a year dipped 1.4 percent. The company blamed weak sandal sales and later back-to-school shopping seasons in some markets.

Payless, which operates almost 4,600 shoe stores throughout the western hemisphere, changed its corporate name to Collective Brands on Aug. 17, after completing its $900 million acquisition of Stride Rite, which operates 300 stores.

Collective Brands will oversee the two retail chains, as well as Collective Licensing International, a brand-development and licensing company.

The company said it recorded $1.8 million in pretax charges during the quarter for expenses tied to the Stride Rite acquisition and $3.6 million in charges tied to changes in its distribution system. The year-ago quarter also included $3.9 million in one-time income from a credit card settlement and insurance payments.

The company said it expected the Stride Rite acquisition to boost operating profits through 2009 by percentages in the mid-to-upper teens, which was lower than the 20 percent figure company officials gave after the announcement of the acquisition.

The company also expects cost savings from consolidating supply chain operations at Payless and Stride Rite of between $40 million and $50 million through 2010.

Finish Line evaluating options on Genesco acquisition, closing women’s Paiva stores

Finish Line (Nasdaq: FINL) said it is evaluating its options on its $1.5 billion acquisition of Genesco after the apparel, footwear and accessories retailer posted disappointing second-quarter results.

Genesco swung to a second-quarter loss of $4.2 million, or $0.19 per share, versus net income of $5.9 million, or $0.24 per share, in the prior year.

The Federal Trade Commission cut short the antitrust waiting period on the Genesco acquisition earlier this month, clearing the way for the transaction.

Finish Line said it would not make any further comments at this time.

In other company news: Finish Line (Nasdaq: FINL) is closing its Paiva athletic stores and online business designed for women by the end of the third quarter. The company said it will close the 15 stores “to focus capital on higher return opportunities.”

“Consumer response to Paiva has been positive, however, we believe we can realize more acceptable returns in the near-term by directing resources toward the company’s core concepts,” said Alan Cohen, Finish Line’s CEO, in a statement.

The company said it expects to record a pre-tax expense of approximately $21 million over the second and third quarters of fiscal 2008, consisting of approximately $12 million of long-term asset costs, $8 million of lease termination costs and $1 million of inventory write offs.

The company is exploring opportunities to redeploy Paiva employees to positions in its Finish Line stores and therefore expects any severance costs to be minimal.

Sears Q2 profit falls 40 percent

Sears Holdings (Nasdaq: SHLD) posted its lowest profit in nearly two years after another round of weak sales at Kmart and Sears stores sent the retailer’s net income tumbling 40 percent.

Sears has seen much of its recent financial success boosted by investment income. But after months of curtailing expenses, the company continues to be vexed by falling sales and profit margins.

Net income for the period ended Aug. 4 fell to $176 million, or $1.17 per share, from $294 million, or $1.88 per share, a year earlier, when the company was helped by a one-time gain. Revenue dipped 4 percent to $12.24 billion.

Same-store sales at Sears’ U.S. stores sank 4.3 percent, while Kmart’s comparable store sales fell 3.8 percent. Sales in Kmart and Sears stores were sluggish in nearly all categories, the company said.

Sears said it has $2.6 billion in cash and equivalents on hand at the end of the quarter, down from $3.7 billion last year. The company said much of the money was used to repurchase about $1.5 billion in shares during the second-quarter.

Meanwhile, the company’s once-robust war chest is shrinking too, dropping to $2.6 billion from $4.4 billion in January 2006. And since mid-April, when shares reached an all-time trading high of $195.18, the company’s stock price is down nearly 25 percent.

Sears stock fell $3.78, or 2.6 percent, to $141.83 on Aug. 30 after dropping as low as $138.33 earlier in the day.

Amer Sports exercises 2003 warrants

Amer Sports said more than 4,000 shares have been subscribed for as a result of an exercise of its 2003 warrants. The corresponding increase in the company’s share capital amounting to EUR 16,020 (USD $21,841) was registered on Sept. 4, 2007. As a result of this increase, Amer Sports’ share capital now totals EUR 288.8 million (USD $393.7 million) and the total number of shares in issue is 72,209,937.

Amer Sports said shareholder rights commence from the registration date Sept. 4, 2007. The new shares will be listed on the Helsinki Exchanges on Sept. 5, 2007. The share subscription period of Amer Sports’ 2003 warrant scheme will end on Dec. 31, 2008.

Amer Sports is the parent of Precor.

(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Sept. 4.)

Hibbett increases line of credit

Hibbett Sports (Nasdaq: HIBB) increased its existing unsecured line of credit with Regions Bank to $30 million, according to a filing with the SEC. The line of credit expires on Aug. 28, 2008, and carries a variable interest rate set at prime. The prime rate is currently 8.25 percent.

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