Collective Beats Estimates

Collective Beats Estimates
A Payless ShoeSource store

Collective Brands Inc.’s fourth-quarter loss widened, but was not as bad as analysts had expected.

For the period ended Jan. 28, the Topeka, Kan.-based firm logged its strongest same-store sales gain at Payless Domestic since the third quarter of 2009, and its net loss came to $41.6 million, or 69 cents a share, compared with a net loss of $10.1 million, or 16 cents, in the fourth quarter of 2010.

Net sales for the quarter advanced 3.6 percent to $815.9 million, driven by double-digit growth in the Performance & Lifestyle Group.

Analysts were expecting a loss of 82 cents a share on revenue of $781.2 million, as polled by Yahoo Finance.

By segment, PLG wholesale performed the best, growing 21.2 percent, thanks to the strong-performing Sperry Top-Sider, Saucony and Stride Rite brands, the firm said.

PLG retail advanced 13.5 percent, driven by Sperry retail stores, a greater inventory breadth and a larger focus on younger children at Stride Rite.

At Payless, domestic sales improved 0.7 percent, with same-store sales advancing 1.6 percent. Products that sold well included those at lower prices, as well as pumps, the Brash junior collection and slip-resistant footwear, the firm said.

Payless International net sales increased 2.3 percent, although same store sales slipped 0.8 percent.

According to Michael Massey, CEO of Collective Brands, the Payless Domestic strategy is connecting with consumers.

“Our early-stage efforts to engage budget-conscious consumers with more value-focused assortments and messaging began to take hold during the quarter,” he said in a statement. “When they came in, customers bought more — and bought more often. Consumer feedback, as well as our results, shows that our strategic redirection for the Payless business is correct.”

For the full year, Collective Brands lost $164.5 million, or $2.73, versus a net income of $112.8 million, or $1.75, a year ago.

Cash and cash equivalents declined to $181.3 million, from $324.1 million, and long-term debt stood slightly reduced, at $604.8 million.

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