Collective Brands Plunges After Earnings

Collective Brands PSS released its fiscal first quarter earnings results after the closing bell on Tuesday. The company reported GAAP earnings attributable to the company of $26.4 million or $0.42 per share, compared to $54.2 million or $0.83 per share in last year's first quarter. Adjusted earnings were $75 million compared to $115.2 million in the year ago period. Wall Street analysts had consensus EPS estimates of $0.82 going into the report. Net sales for the quarter fell to $869 million versus $878.8 million a year ago. This also missed consensus revenue estimates of $915.05 million. Gross margins fell from 38.3% to 35.7%. "We had a challenging first quarter driven by increasingly unfavorable economic conditions affecting mass market consumers as well as unseasonably cold weather. These factors unfavorably affected Payless stores in North America leading to lower customer traffic and sales. We are taking actions to provide better value to customers in light of these economic conditions. As a result, the second quarter is off to a better start," said Matthew E. Rubel, Chairman, Chief Executive Officer and President of Collective Brands, Inc. "Other components of our hybrid business model continued to deliver strong results in the first quarter including PLG Wholesale, Payless Latin America, and franchising operations." In the after hours trading session, PSS shares have lost 13.45% to $18.37.