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Collective Brands Swings to a Loss in Q3; Shares Tumble in After Hours Trading (PSS)

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Collective Brands Inc. (NYSE: PSS) shares tumbled in after-hours trading on Monday after the Topeka, Kansas-based company swung to a loss in its third quarter. Collective Brands, which is engaged in the production of compelling lifestyle, fashion and performance brands for footwear and related accessories, swung to a loss due to tax-related and other charges.

Collective Brands shares fell 8.76% to $12.50 in after-hours trading on Monday. Earlier the stock had closed 0.65% lower at $13.70 in regular trading.


For the quarter ended October 29, the company reported net loss of $114.3 million, or $1.91 per share, compared with a net profit of $47.6 million, or $0.75 per share reported for the same period in the previous year.

Excluding one-time items, Collective Brands reported earnings of $37.1 million, or $0.61 per share for the third quarter, beating analysts’ estimate of adjusted earnings of $0.50 per share.

Collective Brands’ revenue for the third quarter gained 1.4% to $894.4 million. However, third-quarter revenue fell short of analysts’ estimate of $908.1 million. The company’s third-quarter sales were weighed down by Payless. The company’s same store sales in U.S. dropped 3.7%, while same store sales at Payless dropped 4.5%.

Over the next three years, Collective Brands plans to close 475 weak stores.

Michael J. Massey, CEO of Collective Brands, said that the company’s operating results in the third quarter reflect both the challenges it is facing as well as opportunities it sees for market improvement. Massey further said that while August was weak in the company’s Payless business, pricing actions improved sales on a sequential basis during the quarter. Massey added that at the same time the company continued to implement the previously announced aggressive actions to transform the Payless business model for the longer term including increasing its mix of Incredible Value Every Day Product, launching more tailored assortments across half of its domestic store and base and targeted discounts for most loyal customers.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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