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Collective Brands profits drop in first quarter
07 Jun '08
3 min read
"Several areas of the Company reported strong growth. International and wholesale sales increased with particular strength in Payless Latin America, Sperry Top-Sider, and Saucony. In addition, we effectively managed our retail inventories to keep them fresh and controlled our costs to produce good first quarter results and position us well for the future.
In addition to our earnings performance, we also generated strong cash flow and we intend to continue to use cash flows from mature businesses to accelerate growth opportunities that our retail, wholesale and licensing platforms provide."
The gross margin rate for the first quarter of 2008 was 32.7%. Included in gross margin were $30 million of litigation and $3.5 million of purchase accounting inventory step-up charges; excluding the charges, the gross margin rate was 36.3%.
The Payless merchandise margin rate increased again in the first quarter of 2008 compared to the same period last year reflecting the successful execution of the Company's strategies to achieve higher average unit retail prices and increase direct sourcing of Payless products.
In addition to the effects of litigation and inventory step-up charges, Collective Brands' first quarter 2008 gross margin rate declined from 36.9% last year due to the de-leveraging of fixed costs such as rent and other occupancy costs as a result of lower Payless sales.
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In addition to our earnings performance, we also generated strong cash flow and we intend to continue to use cash flows from mature businesses to accelerate growth opportunities that our retail, wholesale and licensing platforms provide."
The gross margin rate for the first quarter of 2008 was 32.7%. Included in gross margin were $30 million of litigation and $3.5 million of purchase accounting inventory step-up charges; excluding the charges, the gross margin rate was 36.3%.
The Payless merchandise margin rate increased again in the first quarter of 2008 compared to the same period last year reflecting the successful execution of the Company's strategies to achieve higher average unit retail prices and increase direct sourcing of Payless products.
In addition to the effects of litigation and inventory step-up charges, Collective Brands' first quarter 2008 gross margin rate declined from 36.9% last year due to the de-leveraging of fixed costs such as rent and other occupancy costs as a result of lower Payless sales.
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Collective Brands Inc
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