Collective Brands Inc. reaffirmed its comparable store sales for the fiscal year, while providing details of the impact from Stride Rite’s acquisition. The Topeka, Kansas-based footwear and related accessories retailer confirmed its same store sales for the full year to be below its long term target of low single digit range. The company expects operating profit growth to be in mid-teens over time.
Collective Brands also expects the August 2007 acquisition of Stride Rite to be accretive to earnings in 2008 on a non-GAAP basis, excluding the impact of purchase accounting. On a GAAP basis, however, the acquisition is not anticipated to be earnings accretive for the current fiscal year including the impact of purchase accounting.
The company also noted that it expects the acquisition to result in cost synergies of approximately $6 million for 2008. For 2009, cost synergies are estimated to be $15 million over base year 2007, and for 2010, it is expected to be around $25 million over base year 2007.
Capital expenditure for the full year is estimated around $130 million, while amortization and depreciation expenses are expected to total $145 million. Effective tax rate for 2008 is expected to be approximately $130 million. The company attributed the higher expenses to huge investments in supply chain and stores in recent years, as well as the 2007 acquisition of Stride Rite.