Earnings Up, Sales Stall for Collective

Earnings Up, Sales Stall for Collective
Payless

Collective Brands Inc. reported a second-quarter increase in net income on Wednesday, amid continuing weak domestic sales at its Payless ShoeSource division.
 
For the period ended July 31, the Topeka, Kan.-based firm earned $21.1 million, or 32 cents a share, up from $18.7 million, or 29 cents, in the same quarter a year ago.
 
Net sales at the company increased 0.6 percent to $841.3 million, from $836.3 million.  This was driven by a 27 percent sales growth in its wholesale Performance and Lifestyle Group segment, but offset by a 5 percent comparable-store sales decline.
 
But the firm missed analysts’ average estimate of 46 cents on revenue of $863.3 million, as polled by Yahoo Finance.
 
“We anticipate continued strength in wholesale and international; and we are focused on fixing Payless’ controllables related to trend-right offerings, use of brands and our breadth of assortment,” said Matthew Rubel, chairman, president and CEO of Collective Brands.
 
Net sales at Payless Domestic fell 7 percent in the second quarter, compared with a 4 percent drop in the first quarter.
 
Lower store traffic, particularly in Southwestern markets, contributed to lower sales, as key footwear categories such as sandals, casuals and canvas declined, the company said in a statement.
 
In contrast, net sales at PLG wholesale surged due to higher sales at Sperry Top-Sider, Saucony and Keds, both domestically and internationally.
 
Collective Brands improved its gross margin 140 basis points in the quarter to 34.4 percent, from 33 percent.

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