Payless Walks Past Estimates

Payless ShoeSource(PSS Quote - Cramer on PSS - Stock Picks) has some spring in its step.

Shares of the discount-shoe retailer were jumping in late trading after the company's first-quarter profits topped Wall Street's estimates.

The Topeka, Kan.-based company earned $38.9 million, or 59 cents a share, up from $36 million, or 53 cents a share, a year earlier.

Excluding $6.1 million in costs tied to changes in the company's distribution centers, earnings were 65 cents a share.

Revenue rose 4.9% to $729 million. Same-store sales, or sales at stores open at least a year, jumped 5%.

Analysts polled by Thomson Financial expected the company to earn 58 cents a share on revenue of $723.6 million.

"Payless delivered a very respectable quarter of sales and earnings through continued execution of our strategy in spite of some challenging weather conditions during the period," Matthew Rubel, CEO and president, said in a statement. "Customers continued to respond to our on-trend and differentiated products, demonstrating the resilience of our business during the quarter."

Shares of Payless were climbing $2.21, or 6.4%, to $36.92 in after-hours trading.

The better-than-expected report comes a week after the company announced that it will acquire shoe seller Stride Rite(SRR Quote - Cramer on SRR - Stock Picks) for $800 million. Upon completion of the deal, Payless will rename itself Collective Brands and operate as a holding company with three standalone units.