UPDATE 1-Collective Brands Q3 profit tops Street view; shares up

Tue Dec 4, 2007 6:03pm EST

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Dec 4 (Reuters) - Footwear retailer Collective Brands Inc PSS.N posted third-quarter earnings that topped Wall Street estimates despite a challenging retail environment, sending its shares up more than 14 percent.

The company, which recently acquired rival shoe retailer Stride Rite, posted earnings of $25.5 million, or 39 cents a share, down from $28.9 million, or 43 cents a share reported a year ago. Excluding the impact of a purchase accounting expense, it earned 51 cents a share.

Revenue rose 18.1 percent to $830.7 million.

Analysts were expecting earnings of 32 cents a share on revenue of $845.1 million, according to Reuters Estimates.

The Topeka, Kansas-based company said same-store sales for the quarter, including only Payless results, fell 3.5 percent, hurt by reduced traffic and lower sales of boots.

The company, formerly known as Payless Shoesource, said it expects fourth-quarter same-store sales to decrease in the mid-single digits.

Collective Brands expects capital expenditure of about $175 million and $150 million for 2007 and 2008, respectively.

Shares of the company were up more than 14 percent to $17.25 in late electronic trade, after closing at $15.09 Tuesday on the New York Stock Exchange. (Reporting by Esha Dey in Bangalore; Editing by Saumyadeb Chakrabarty)

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