Footwear retailer Collective Brands Inc posted a third-quarter profit that beat market expectations, driven by a successful back-to-school season and strong boot sales, sending its shares up 8 percent in extended trade.
The quarter was driven primarily by strength at their core Payless ShoeSource stores in the United States, MKM Partners analyst Patrick McKeever said.
Collective Brands, which is the holding company of Payless ShoeSource, Stride Rite and Collective Licensing International, said its sales and operating margins improved, and it generated substantially greater free cash flow.
The company's boot sales benefited from a cooler October, Chief Executive Matthew Rubel said on a conference call.
He added that the women's boot category was, becoming an increasingly large percentage of the business.
However, McKeever said the strong boot sales trend was not necessarily weather driven.
There has been some underlying strength in fashion boots as well as cold weather boots sales.
Susquehanna Financial analyst Christopher Svezia said he expects solid sales trends for boots and the children's footwear category to continue in the holiday and spring quarters.
The company's Payless ShoeSource chain, which offers fashionable, private and branded-label footwear and accessory products for men, women, and children saw domestic same-store sales rise 5.4 percent during the quarter.
Overall same-store sales -- a key metric of retail health -- rose 3.1 percent.
Sales were favorably impacted by our designer Christian Siriano's appearance on the Oprah Winfrey show, Chief Administrative Officer Douglas Treff said on the call.
It's just an example of the way the company is becoming more creative with its marketing, analyst McKeever said.
For the third quarter, the company reported earnings attributable to Collective Brands of 57 cents a share, down from 74 cents a share, a year earlier.
Excluding litigation and severance charges, it earned 61 cents a share.
Revenue at Collective Brands, which bought shoe maker Stride Rite last year, rose marginally to $867 million.
Analysts were looking for earnings of 49 cents a share, on revenue of $847.6 million, according to Thomson Reuters I/B/E/S.
Shares of the Topeka, Kansas-based company, which have tripled in the last one year, closed at $20.17 Wednesday on the New York Stock Exchange.
(Reporting by Shradhha Sharma in Bangalore; Editing by Ratul Ray Chaudhuri)