Collective Brands earnings fall 23%

TOPEKA, Kan. Collective Brands (formerly Payless ShoeSource) today reported second quarter net earnings were $24.9 million or 38 cents per diluted share, down 23%, versus second quarter 2006 net earnings of $32.5 million, or 48 cents per diluted share. According to the company, the quarter ended prior to the close of the Stride Rite acquisition.

Collective Brands said that its second quarter results were impaceted by expenses related to the purchase of Stride Rite, which totaled $1.8 million pre-tax or 2 cents per diluted share.

Total sales were $699 million, down 1% compared to the second quarter of 2006. Second quarter 2007 same-store sales were down 1.4%. Sales declined due to weak sandals results and the later timing of the back-to-school season in certain key markets. These factors were partially offset by higher customer conversion, strength in athletic and casual footwear, and growth in average unit retails of 1%.

"Although Payless's second quarter sales and earnings under performed our expectations, we continued to pick up market share in a challenging industry environment," said Matthew Rubel, ceo and president. "In spite of short-term conditions, we believe Payless is firmly in a position of long-term strength due to our ability to consistently offer on-trend targeted product, our compelling brands, our highly efficient supply chain, and other initiatives that are key to serving our customers."