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Finish Line May Step Back from Genesco Deal

The shoe retailer is mulling its options after Genesco posts weak second-quarter results.
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Finish Line

(FINL)

said Thursday that it is mulling its options with regards to its $1.5 billion purchase of

Genesco

(GCO) - Get Genesco Inc. Report

after the footwear seller posted weak second-quarter results.

Shares of Finish Line jumped 13% on the news, while Genesco shares tumbled 13%.

Genesco, owner of brands such as Journeys and Johnston & Murphy, earlier Thursday reported a second-quarter loss of $4.2 million, or 19 cents a share, compared with a year-earlier profit of $5.9 million, or 24 cents a share. The results included charges of 13 cents a share, but still were much worse than analysts' forecast for a profit of 31 cents a share.

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Sales rose 8% to $328 million, but fell short of Wall Street's estimate of $350 million.

Finish Line said in a statement Thursday that it was "disappointed" with Genesco's second-quarter results.

"Consistent with its responsibilities to The Finish Line's shareholders, the company is evaluating its options in accordance with the terms of the merger agreement," Finish Line said. "The company does not intend to make further comments at this time."

Finish Line agreed in June to buy Genesco for $54.50 a share, or roughly $1.5 billion. That deal came after fellow shoe retailer

Foot Locker

(GCO) - Get Genesco Inc. Report

made several offers for Genesco that were spurned.

Shares of Finish Line recently were up 70 cents to $6.25. Genesco shares were down $6.60 to $43.50.