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Payless Targets Latin America

TOPEKA, KS-Payless ShoeSource execs say they will close its single test store in Japan to focus on its Latin American market.

By Beverly Ford | Updated on August 24, 2006

TOPEKA, KS-The number of Payless ShoeSource stores decreased by 18 during the second quarter of 2006 as the footwear retailer worked to make good on a promise by president and CEO Matthew Rubel to “make progress toward our goal of achieving more consistent sales and earnings performance.”

The Topeka, KS company, which has 4,584 stores in the United States and Latin America, is apparently heading in that direction. Earnings jumped to $32.5 million, or 48 cents a share, on sales of $706.4 million during the second quarter, but profits fell short of the 53 cents per share predicted by analysts, sending Payless stock tumbling. Those results, announced Wednesday in a conference call with investors and analysts, were up from last year when Payless recorded a second-quarter profit of $19.9 million, or 29 cents a share, on sales of $693.9 million, including a 3 cent per share loss from discontinued operations.

Yet despite this year’s second quarter earnings shortfall, Rubel said the combination of low single-digit same-store sales growth, gross margin expansion and prudent expense control were working to drive earning improvements.

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