Collective Brands reports larger 4Q loss

Shoe retailer Collective Brands Inc. said Tuesday its fourth-quarter loss more than tripled as sales fell and it wrote down the value of its 2007 acquisition of the Stride Rite chain.

The Topeka, Kan.-based company, which also operates the Payless ShoeSource chain, reported losing $144 million, or $2.28 per share, including a $130.2 million write-down linked to Stride Rite. The company also recorded $2.5 million in charges, not including insurance recoveries because of litigation.

By comparison, the company lost $46.6 million, or 73 cents per share, during the same period a year ago.

Not including one-time items, Collective Brands said it would have lost 55 cents per share in the latest quarter. That was still worse than the 40-cents-per-share loss expected by analysts surveyed by Thomson Reuters.

Quarterly revenue declined 5.4 percent to $735.2 million from $776.8 million, missing analysts' expectations for $767 million in sales. Sales for stores open for at least a year, considered a key barometer of retail health, fell 6.6 percent during the quarter.

For the year, the company said it lost $68.7 million, or $1.04 per share, compared with a profit of $42.7 million, or 65 cents per share, in 2007. Not including one-time items, Collective Brands said it would have earned $1.12 per share, which was below analysts' expectations of $1.20.

Annual revenue increased 13 percent to $3.4 billion.

The company didn't provide revenue or earnings guidance for the new year but said it does expect to lose a net of 60 stores, most of them from the Payless chain. Collective Brands now operates 4,877 stores.

Analysts are expecting full-year earnings of $1.24 per share on $3.44 billion in sales.

During a conference call with analysts, Chief Executive Officer Matt Rubel also said the company would not see $78 million in annual revenue from Tommy Hilfiger-branded products after not renewing a licensing agreement in December.

But Rubel said the company is taking steps to cut costs, such as reducing its corporate head count by 200 people, and expects to see more purchases by consumers _ especially parents _ looking for cheaper-priced shoes.

"In this current environment we are managing for cash, watching our inventories and capital spending and taking appropriate action where needed," Rubel said. "We are confident that we will deliver strong free cash flow and operating profit in 2009 and thereby deliver shareholder value."

The company released its earnings after the markets closed Tuesday. Its shares gained $1.13, or 13 percent, to close the regular session at $9.70, but fell 80 cents, or more than 8 percent, to $8.90 in after-hours electronic trading.