I had prepared myself to storm in and trash Finish Line (Nasdaq: FINL) for poor results after it announced earnings. A funny thing happened, though -- the company's third-quarter sales weren't the complete disaster I'd expected.

To be fair, Finish Line didn't make any money last quarter. Same-store sales were down 3.6%, and the company took a per-share loss of $0.16. Both sales and profits came in under analysts' expectations at the retailer of athletic shoes and related apparel and products. Yet after a big drop right before the earnings release, shares jumped back more than 11% on Wednesday following the announcement.

So what's up with the rally on news that was mediocre at best?

A realistic look ahead
Kudos to investors for looking ahead rather than behind. While I still see the company's 2009 outlook as a little too optimistic, I think the market also recognizes that Finish Line has been proactive about improving its financial position during the economic crunch, with decisions such as backing out of the Genesco (NYSE: GCO) acquisition and implementing cost-cutting measure within the company.

For instance, third-quarter real estate expenses were down $2.2 million from a year earlier. The company also brought inventory levels down from $338 million a year ago to $293 million this year. A year from now, those decisions should mean a much healthier income statement.

But things could look ugly in the meantime. Finish Line's third quarter ended Nov. 29, so its results don't include December. We already know a whole slew of retailers reported troubling December results. Gap (NYSE: GPS) watched December's same-store sales slide lower by 14%, while Limited Brands (NYSE: LTD) fell 10%, and Abercrombie & Fitch (NYSE: ANF) tanked a whopping 24%. That doesn't quite give me a warm fuzzy feeling about prospects for Finish Line's fourth quarter.

Yet Finish Line is starting to grow on me for a couple of reasons:

The conservative move would be to wait and see how things go for Finish Line. But investors who are optimistic about the company's prospects may want to jump in with a speculative stock purchase.

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