Collective Brands Q4 loss widens on higher costs, but sales up
TOPEKA, Kan. — Footwear seller Collective Brands Inc. said that its fourth-quarter loss widened dramatically from the year before as higher costs cut into profit margins. But the loss was far narrower than Wall Street expected, while revenue was much higher.
The company, which operates the Payless ShoeSource chain, said its net loss during the quarter ended Jan. 28 was $41.6 million, up from a loss of $10.1 million in the year-ago period. Revenue rose to $815.9 million from $773.8 million. Same-store sales increased 1.7%, also better than expected.
Collective Brands said it is on track with its plan to close about 475 underperforming and low-volume stores by the end of 2013. About 400 of those stores are Payless stores in the United States, Canada, and Puerto Rico. At the end of the quarter, the company operated nearly 4,500 stores worldwide.
For the full year of 2011, the company reported a net loss $164.5 million, compared with net income of $112.8 million the year before. Revenue for the year was $3.46 billion, up from $3.38 billion in 2010.
"Our results reflect how the Payless Domestic strategy is connecting with our customers," said Michael Massey, CEO of Collective Brands Inc. "Our early stage efforts to engage budget-conscious consumers, with more value-focused assortments and messaging, began to take hold during the quarter. Our actions at Payless held traffic in the United States nearly flat for the best result in six years. When they came in, customers bought more, and bought more often. We believe our Payless team's initiatives are gaining traction and driving results, which gives us confidence as we move forward."