Payless Q1 comparable store sales rise 5%, net earnings up 8.1%

31 May '07

3 min read

Payless ShoeSource Inc reported financial results for the first quarter ended May 5, 2007. First quarter 2007 net earnings were $38.9 million, or $0.59 per diluted share, up 8.1% versus first quarter 2006 net earnings of $36.0 million, or $0.53 per diluted share.

The results for the first quarter of 2007 included costs related to the company's distribution center initiative, including the exit from one facility and temporary redundancies between facilities. Those costs totaled $6.1 million pre-tax or $0.06 per diluted share in the first quarter of 2007.

First quarter 2007 comparable store sales were up 5.0%, the ninth consecutive quarter of positive comparable store sales. Total sales were $729 million, up 4.9% compared to the first quarter of 2006.

Average unit retails increased 2% and total unit sales grew 3%, compared to the first quarter of 2006. This was due primarily to strength in women's footwear and greater customer conversion. First quarter sales gains were offset in part by underperformance in sandals.

"Payless delivered a very respectable quarter of sales and earnings through continued execution of our strategy in spite of some challenging weather conditions during the period," said Matthew E. Rubel, Chief Executive Officer and President.

"Customers continued to respond to our on-trend and differentiated products, demonstrating the resilience of our business during the quarter. Our inventory is in excellent condition,and we are well-positioned for the remainder of the spring season."

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