Payless Profit Falls on Sandal Shortage

Payless ShoeSource Inc. said that its fiscal first-quarter earnings fell 20% after the company underestimated demand for warm-weather footwear and that second-quarter profit may beat estimates as the largest U.S. shoe retailer stocks more sandals and open-toe shoes.

Net income in the period ended May 4 fell to $23.9 million, or $1.05 a share, from $29.7 million, or $1.30, a year earlier. Sales fell 3.9% to $738.2 million.

Chief Executive Steven J. Douglass said in a conference call that the company didn’t have enough sandals and other open-toe footwear in its stores in the first quarter, and that shortage is being corrected.

Shares of Topeka, Kan.-based Payless rose $1.30, or 2.3%, to $58.20 on the NYSE.