NEW YORK – Payless ShoeSource Inc. (PSS) Thursday posted a better-than-expected profit on strong spring shoe sales and cost savings, sending its stock soaring 18 percent.
The Topeka, Kansas-based retailer, which had restructured and closed some stores last year, said it will focus on its family footwear business and cut expansion into overseas markets.
Earnings for the fiscal first quarter ended April 30 more than doubled to $30.2 million, or 45 cents a share, from $14.1 million, or 21 cents a share, a year earlier.
Excluding a loss from discontinued operations, Payless said earnings per share were 47 cents, beating four analysts' average estimate of 27 cents, according to Reuters Estimates.
Sales at stores open at least a year, a closely watched figure in retail, increased 2.7 percent for the quarter. Total sales rose to $695.2 million from $692.3 million.
"It is clear that customers have reacted positively to the company's spring merchandise to date, especially in our women's and children's categories," Payless Chief Executive Steven Douglass said in a statement.
He added that the company's branded athletic-style shoes also posted strong results during the first quarter.
In the past, Payless had cited aggressive promotions for weak quarterly results.
The company, which has 4,646 stores worldwide, said it still expects future same-store sales to grow in the low single-digit percent.
Payless, which hired talk-show host Star Jones (search) as its pitchwoman, said it expects a net reduction of 40 stores in fiscal 2005.
Payless said it has curtailed expansion into new international markets to focus on its main business. The retailer had opened its first store in Japan during the fourth quarter.
Payless shares were up $2.50 at $16.63 on the New York Stock Exchange (search), where they topped other percentage gainers.
The company's stock has risen about 82 percent from a 52-week low of $9.20 on Oct. 26, 2004.