Finish Line Inc. confirmed today that it is exploring strategic alternatives for its specialty running store chain JackRabbit.
The confirmation comes after months of speculation that Finish Line was considering a divestiture of the segment of its business.
In March 2015, Finish Line purchased New York based specialty chain JackRabbit and folded into its Running Specialty Group division, rebranding the entire division of 70 stores under the JackRabbit name.
In a release today, Finish Line said that a potential sale is a viable option for the chain.
“After a comprehensive review, the company believes its long-term growth strategy and profitability improvement plans align with simplifying the business to focus on the Finish Line brand and has decided to evaluate possible alternatives for JackRabbit including a potential sale,” Finish Line said.
The company has tapped Peter J. Solomon Company, LLC as its financial adviser and said that there is no definitive time line or assurance that this process will result in a sale transaction.
As a result of the exploration of strategic alternatives for JackRabbit, Finish Line expects to record a non-cash goodwill impairment charge in the third quarter of $44 million.
Finish Line’s move comes at a time when several retailers are feeling the pressure of shifting consumer sentiment, sluggish retail spending and macroeconomic volatility.
Nevertheless, in the most recent quarter, the company produced sales and profit results that surpassed expectations — marking its third straight quarter of exceeding estimates.
Finish Line’s revenues gained more than 5 percent year-over-year, to $509.4 million, topping forecasts for revenues of $494 million. Comparable store sales also advanced 5.1 percent, trumping estimates.
Finish Line ended the day Tuesday with its shares down 1.3 percent, to $22.65.
