Collective Brands, owner of low-price Payless Shoe Source, shrinks its 4th-quarter loss

Loss shrinks at Collective Brands, Payless parent

TOPEKA, Kansas — Collective Brands Inc., which operates the low-price Payless Shoe Source chain, on Tuesday reported a smaller loss for its fourth quarter as its margins improved.

The company, based in Topeka, Kansas, posted a loss of $10.9 million, or 17 cents per share, for the quarter that ended Jan. 30. That compares with a loss of $144 million, or $2.28 per share, in the same quarter a year earlier.

Excluding several items — including litigation costs, charges to reflect the falling value of its assets and the expiration of its license agreement with Tommy Hilfiger — the company lost $11.6 million, or 18 cents per share. A year earlier, it lost $38.1 million, or 60 cents per share, on that basis.

The company’s revenue grew just under 1 percent to $741.7 million.

Analysts polled by Thomson Reuters expected the company to post a loss of 26 cents per share on revenue of $724.7 million. Analysts typically exclude one-time items from their estimates.

CEO Matthew E. Rubel said a strong product line helped improve gross margins. And that, combined with lower operating costs, improved Collective Brands’ operating profit for the year.

Rubel said the company produced record free-cash flow, strengthened its capital structure and positioned itself for growth.

For the full year, the company reported a profit of $82.7 million, or $1.28 per share, up from a loss of $68.7 million, or $1.09 per share, in the prior year.

Excluding one-time items, it earned $84.5 million, or $1.31 per share, for the year. In the prior year, it earned $62.2 million, or 99 cents per share, on that basis.

Sales fell nearly 4 percent to $3.44 billion for the year.

Shares of Collective Brands rose 35 cents to close at $23.99.