Shares of

Payless ShoeSource


tumbled in early trading after the footwear retailer's second-quarter profit missed analysts' expectation.

The company earned $32.5 million, or 48 cents a share, on sales of $706.4 million. Analysts polled by Thomson First Call had an average estimate for earnings of 53 cents a share, with sales of $704 million.

A year ago, Payless recorded a second-quarter profit of $19.9 million, or 29 cents a share, on sales of $693.9 million. The results included a loss of 3 cents a share from discontinued operations.

The company's same-store sales rose 2.2% for the quarter, while merchandise margins improved 1.5% as a percent of sales.

"We are pleased with our earnings growth in the second quarter," said Matthew Rubel, CEO and president, in a press release. "The combination of low single digit same-store sales growth, gross margin expansion and prudent expense control demonstrates that these factors working in concert can drive earnings improvements in the future."

Payless shares were down $2.04, or 7.8%, to $24 in premarket trading.