Collective Brands Jumps Ahead
Collective Brands, Inc. (PSS), the wholesaler and retailer of footwear and related accessories, recently reported third-quarter 2009 results that topped Zacks expectations on the heels of strong boot sales and “back to school” season.
The quarterly earnings of 61 cents a share outdid the Zacks Consensus Estimate of 49 cents, and jumped 48.8% from 41 cents delivered in the prior-year quarter. On a reported basis, including one-time items, earnings came in at 57 cents, down 23% year-over-year.
The operator of Payless ShoeSource and Stride Rite chains delivered revenue of $867 million, up 0.5%, reflecting an increase in comparable-store sales and sales increases across brands such as Saucony and Sperry Top-Sider.
Collective Brands’ comparable-store sales for the quarter climbed 3.1%. Comps for Payless ShoeSource rose 3.4%, whereas comps for the Performance + Lifestyle Group (PLG) dropped 0.7%. PLG sells branded footwear for children and adults, under brand names including Stride Rite, Saucony, Sperry Top-Sider, Keds and Robeez.
The company’s Payless ShoeSource chain, the specialty family footwear retailer, saw domestic comps rise 5.4%. Payless ShoeSource domestic chains’ revenue rose 4.4% to $578.1 million, whereas Payless ShoeSource international chains slid 1.3% to $110 million. PLG wholesale revenue dipped 15.5% to $111.6 million, whereas PLG retail revenue climbed by 2.7% to $67.3 million.
During the quarter, Collective Brands opened nine new stores (6 Payless ShoeSource and 3 PLG), closed 26 Payless ShoeSource stores, and relocated five stores (4 Payless ShoeSource and 1 PLG). During fiscal year 2009, the company expects to open 88 stores (77 Payless ShoeSource and 11 PLG) and close 143 stores (140 Payless ShoeSource and 3 PLG). Currently, the company operates 4,846 stores.
Management now expects capital expenditures for fiscal year 2009 to be $85 million. The company generated free cash flow of $241.6 million in the first nine months of 2009 compared to $90.3 million in the same period last year, reflecting lower capital expenditures, effective working capital management and increased earnings.
