Collective Brands Reports Higher 1Q Profits

DAVID TWIDDY

KANSAS CITY, Mo. (AP) — Collective Brands Inc., which operates the Payless ShoeSource and Stride Rite chains, said Wednesday that its first-quarter profit surged 93 percent from a year-ago quarter hurt by litigation and accounting expenses.

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 Matt Rubel told analysts during a conference call.

The Topeka, Kan.-based company reported earning $38 million, or 59 cents per share, during the three months ended May 2. By comparison, it earned $19.7 million, or 30 cents per share, during the same period a year ago, which 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 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.