Shoe retailers aren't stepping lively these days. Sizing up the results Collective Brands (NYSE: PSS) and Foot Locker (NYSE: FL) just untied to investors, it looks as if strapped consumers are forgoing a new pair of spring pumps in favor of a fill at the gas pump.

Not much "rite" here
Collective Brands saw comparable sales fall 6.8% in its fourth quarter on lower traffic than usual and a decline in consumer spending. A gross margin decline of 260 basis points (before unusual items) didn't help either; the bottom line slipped into negative territory coming in at a loss of $0.73 per stub. However, a $0.42 charge contributed to the loss due to purchase accounting adjustments connected to the acquisition of Stride Rite last year.

Management was a bit coy in its margin discussion, noting that the Payless stores showed improved margins, and pointing to low-aged inventory (discontinued styles) at quarter end. But I'm not buying it. Total inventories ended up 30% on 12% higher sales (including the acquired Stride Rite stores). I'd say that's a lot of stock to move through this spring.

Further, the outlook for 2008 looks murky. Management tentatively guided toward mid-teens operating profit growth based on low-single-digit comp sales, but warned that sales may well be worse than this "long-term goal." This sounds as though management's saying: Earnings will be good if sales get a lot better, but don't count on it.

We did our best, coach
Foot Locker's comp sales were stomped on even further, declining 7.8% during the quarter. Earnings that clocked in at $0.56 per share, reflecting a 4.8% drop, didn't look too bad, but they were boosted by a net $0.32 due to a big tax benefit that offset charges for closing unproductive stores. Excluding the unusual items, operating profit of $10 million fell more than 93%.

Looking at the soft sales, management decided the quarter wasn't pretty and bit the bullet on markdowns, driving margins down a whopping 630 basis points. Inventories looked reasonably in line, down 1.7% in total but up 2.1% per store.

Out of fashion?
Is there any good news to be found in shoes? Certainly not at Shoe Carnival (Nasdaq: SCVL), which has shed nearly 60% of its market value in the past year.

However, I am bullish on the looks of DSW (NYSE: DSW), a prime pick in the moderately priced shoe space. And fellow Fool Alyce Lomax says Skechers (NYSE: SKX) is stylin'.

It's not all doom and gloom, but I'd try these companies on carefully to make sure the shoe fits before I'd wear it.

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Fool contributor Timothy M. Otte surveys the retail scene from Dallas. He welcomes comments on his articles, but doesn't own shares of any companies mentioned in this article. The Fool's disclosure policy has a passion for shoe shopping.