Collective Brands sees 4Q earnings drop

TOPEKA, Kan. Collective Brands reported fourth quarter 2007 net sales of $776.8 million, up 12.1% compared to the fourth quarter of 2006, as a result of the acquisition of Stride Rite. Net sales were up 18.4% after adjusting for a comparable 13-week period. The fourth quarter 2007 net loss was $46.6 million, or 73 cents per diluted share.

In the fourth quarter of 2006 (a 14-week quarter compared to a 13-week quarter in 2007), the company had net earnings of $24.6 million, or 37 cents, per diluted share which included a tax benefit of $14.3 million, or 22 cents per diluted share, related primarily to the closing of income tax audits in various jurisdictions. In addition, the extra week in 2006 represented sales of $36.4 million.

For the full year 2007, Collective Brands sales were $3.04 billion, up 8.5% versus the prior year due to the addition of Stride Rite. Comparable-store sales (which include only Payless results) declined 1.9% in 2007 on a comparable-calendar basis. Net earnings for 2007 were $42.7 million, or 65 cents per diluted share, compared to 2006 net earnings of $122 million, or $1.82 per diluted share.

"The results in the fourth quarter of 2007 reflected a difficult domestic economic environment," said Matthew Rubel, ceo and president. "In response to this, we have been prudently adjusting inventory and expenses. Our inventory levels are below last year at Payless and we are prepared with fresh product for the spring season."