Collective Brands Reports Higher 1Q Profits

DAVID TWIDDY

KANSAS CITY, Mo. (AP) — Collective Brands Inc. said Wednesday that its first-quarter profits surged 93 percent, helped by litigation and accounting expenses recorded during the year-ago quarter.

The earnings results beat Wall Street expectations, although sales declined, hurt by lower consumer spending, foreign currency fluctuations and the end of the company's relationship with designer Tommy Hilfiger for adult footwear.

"It continues to be tough out there," Chief Executive Officer Matt Rubel told analysts during a conference call.

The Topeka, Kan.-based company, which operates the Payless ShoeSource and Stride Rite chains, reported earning $38 million, or 59 cents per share, during the three months ending May 2. By comparison, it earned $19.7 million, or 30 cents per share, during the same period a year ago. The year-ago period included $33.5 million in litigation and accounting charges.

Analysts surveyed by Thomson Reuters had expected earnings of 46 cents per share.

Revenue during the quarter fell 7.4 percent from $932.4 million to $862.9 million, below analysts' expectations of $888.2 million. Sales in stores open for at least a year, a key measure of retail health, declined by 4.8 percent.