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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q
(Mark One)

(X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

                 For the quarterly period ended May 28, 1999

( )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                     For the transition period from to .

                         Commission File Number: 1-4404

                              THE STRIDE RITE CORPORATION
            (Exact name of registrant as specified in its charter)

                 Massachusetts                   04-1399290
        (State or other jurisdiction) (I.R.S. Employer Identified No.)

              191 Spring Street, Lexington, Massachusetts 02421
             (Address of principal executive offices) (Zip Code)

      Registrant's telephone number, including area code: (617)824-6000

         Securities registered pursuant to Section 12(b) of the Act:

                                                      Name of each exchange
Title of each class                                    on which registered
Common stock, $.25 par value                        New York Stock Exchange

Preferred Stock Purchase Rights                     New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

          Yes (X)          No ( )
                                 -

As of July 6, 1999, 46,443,710 shares of the registrant's common stock, $.25 par
value, and the accompanying Preferred Stock Purchase Rights were outstanding.


<PAGE>



PART I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements

                           THE STRIDE RITE CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)

                                    May 28,                          May 29,
                                     1999         November 27,        1998
                                  (Unaudited)         1998         (Unaudited)
                                 --------------   --------------  --------------

  Assets

  Current Assets:
     Cash and cash equivalents         $30,560          $42,427         $19,565

     Short-term investments                  -                -          10,000

     Accounts and notes
      receivable, net                   85,456           56,475          84,284

     Inventories                       110,472          128,472         100,468

     Deferred income taxes              24,758           24,758          29,013

     Other assets                        3,583            6,097           6,281
                                         -----            -----           -----

     Total current assets              254,829          258,229         249,611

  Property and equipment, net           63,626           58,350          58,587

  Other assets                          24,338           18,917          19,055
                                        ------           ------          ------

     Total assets                     $342,793         $335,496        $327,253
                                      ========         ========        ========







              The   accompanying  notes are an  integral  part of the  condensed
                    consolidated financial statements.




                                      2


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION
                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
                             (Dollars in Thousands)

                                    May 28,                           May 29,
                                      1999        November 27,         1998
                                  (Unaudited)         1998          (Unaudited)
                                 ---------------  --------------   -------------

  Liabilities and Stockholders' Equity

  Current Liabilities:
     Accounts payable                    27,516         $40,951         19,719
     Income taxes payable                20,742          14,130         21,074
     Accrued expenses and other
       liabilities                       31,946          29,646         28,927
                                         ------          ------         ------
     Total current liabilities           80,204          84,727         69,720

  Deferred income taxes                   6,042           6,042          6,504


  Stockholders' Equity:
     Preferred stock, $1 par value
       Shares authorized - 1,000,000
       Shares issued - None                   -               -              -

     Common stock, $.25 par value
       Share authorized - 135,000,000
       Shares issued - 56,946,544        14,237            14,237       14,237

     Capital in excess of par
       value                             21,862            22,063       22,309

    Retained earnings                   349,212           337,943      335,561

    Less cost of 10,504,209
       shares of common stock
       held in treasury
       (10,565,526 on November
       27, 1998 and 9,656,021
       on May 29, 1998)                (128,764)         (129,516)    (121,078)
                                       ---------         ---------    ---------
     Total stockholders' equity         256,547           244,727      251,029
                                       ---------         ---------    ---------

 Total liabilities and
  stockholders' equity                 $342,793          $335,496     $327,253
                                       ========          ========     ========

              The   accompanying  notes are an  integral  part of the  condensed
                    consolidated financial statements.


                                      3


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                       THE STRIDE RITE  CORPORATION
         CONDENSED  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
            For the periods ended May 28, 1999 and May 29, 1998
                      (In Thousands Except Per Share Data)


                               Three Months Ended            Six Months Ended
                              May 28,       May 29,       May 28,        May 29,
                               1999          1998           1999          1998
                            ------------  ------------  -------------  ---------

Net sales                   $166,253      $143,176      $314,437       $272,161

Cost of sales                105,012        91,543       198,689        174,048

Selling and
administrative expenses       45,320        40,033        89,860         79,178
                            --------      --------      --------       --------

Operating income              15,921        11,600        25,888         18,935

Other income(expense):
  Interest income                707           843         1,665          1,773
  Interest expense              (658)         (557)       (1,304)          (943)
  Other, net                    (282)        3,215          (647)         2,279
                            ---------     --------      ---------      --------
                                (233)        3,501          (286)         3,109
                            ---------     --------      ---------      --------
Income before income
taxes                         15,688        15,101        25,602         22,044

Provision for income
taxes                          5,925         5,505         9,690          8,047
                            --------      --------      --------       --------

Net income                  $  9,763      $  9,596      $ 15,912       $ 13,997
                            ========      ========      ========       ========

Net income per common share:
  Diluted                   $    .21      $    .20      $    .34       $    .29
                            ========      ========      ========       ========
  Basic                     $    .21      $    .20      $    .34       $    .30
                            ========      ========      ========       ========
Dividends per common
share                       $    .05      $    .05      $    .10       $    .10
                            ========      ========      ========       ========

Average common shares
used in per share
computations:
  Diluted                     46,840        47,655        46,685         47,611
                            ========      ========      ========       ========
  Basic                       46,422        47,275        46,408         47,282
                            ========      ========      ========       ========





              The accompanying notes are an integral part of the
                 condensed consolidated financial statements



                                      4

<PAGE>


                  PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE  CORPORATION
         CONDENSED  CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)
           For the three months ended May 28, 1999 and May 29, 1998
                             (Dollars in Thousands)

                                                   May 28, 1999    May 29, 1998
                                                  --------------  --------------
Cash was provided from (used for) Operations:
   Net income                                           $15,912        $13,997
   Adjustments to reconcile to net cash provided
      from (used for) operations:
   Depreciation and amortization                          5,190          5,166
   Compensation expense related to executive
      stock plans                                           228            165
   Equity in loss of affiliate                              813              -
   Loss(gain) on disposal of property and
      equipment                                             934         (3,395)
   Changes in:
      Accounts and notes receivable                     (28,981)       (32,576)
      Inventories                                        18,000         34,260
      Other current assets                                2,514         (1,159)
      Accounts payable, income taxes, accrued
       expenses and other current liabilities            (5,095)       (24,683)
      Net cash provided from (used for) operations      $ 9,515        $(8,225)
Investments:
   Additions to property and equipment                  (11,264)       (10,720)
   Proceeds from sales of property and equipment              -          5,888
   Purchase of marketable securities                       (772)          (139)
   Increase in other assets                              (5,062)        (2,758)
                                                         -------        -------
      Net cash used for investments                     (17,098)        (7,729)
                                                        --------        -------
Financing:
   Proceeds from sale of stock under stock plans            355            944
   Cash dividends paid                                   (4,639)        (4,727)
   Repurchase of common stock                                 -         (2,361)
                                                         -------        -------
      Net cash used for financing                        (4,284)        (6,144)
                                                         -------        -------

Net decrease in cash and cash equivalents               (11,867)       (22,098)

Cash and cash equivalents at beginning of the
period                                                   42,427         41,663
                                                         ------         ------

Cash and cash equivalents at end of the period          $30,560        $19,565
                                                        =======        =======



              The accompanying notes are an integral part of the
                 condensed consolidated financial statements

                                      5


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                     NOTE 1

      The  financial  information  included in this Form 10-Q of The Stride Rite
Corporation  (the "Company") for the periods ended May 28, 1999 and May 29, 1998
is unaudited  and subject to year-end  adjustments.  However,  such  information
includes all adjustments  (including all normal recurring adjustments) which, in
the opinion of management,  are considered  necessary for a fair presentation of
the  consolidated  results for those periods.  The results of operations for the
periods  ended May 28, 1999 and May 29, 1998 are not  necessarily  indicative of
the results of operations that may be expected for the complete fiscal year. The
year-end  condensed  balance  sheet  data was  derived  from  audited  financial
statement,  but does not include all disclosures  required by generally accepted
accounting   principles.   The  Company  filed  audited  consolidated  financial
statements  for the year ended November 27, 1998 on Form 10-K which included all
information and footnotes necessary for such presentation.

      The Company's  preparation  of financial  statements  in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of contingency  assets and  liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the reported
periods.  The most significant  estimates included in these financial statements
include valuation allowances and reserves for accounts receivable, inventory and
income taxes. Actual results could differ from those estimates.

                                     NOTE 2

      On March 31, 1998,  the Company sold two buildings  and adjoining  land in
Boston  which was  formerly  used as a  distribution  center  for the  Company's
wholly-owned subsidiary,  Stride Rite Children's Group, Inc. The Boston facility
was closed in  December  1997  following  the  transfer of  operations  to a new
distribution  center in  Huntington,  Indiana.  The  transaction  resulted  in a
one-time  pre-tax gain of $3.9 million ($.05 per share,  net of income taxes) in
the second quarter of fiscal 1998.











                                         6


<PAGE>


                     PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                     NOTE 3

      Basic earnings per share excludes dilution and is computed by dividing net
earnings  available to common  stockholders  by the weighted  average  number of
common shares  outstanding for the period.  Diluted  earnings per share reflects
the  potential  dilution  that could occur if options to issue common stock were
exercised.

      The  following  is a  reconciliation  of the number of shares  used in the
basic and diluted earnings per share computations (shares in thousands):

                                                 Second Quarter
                                   -------------------------------------------
                                           1999                 1998
                                   ---------------------  --------------------
                                              Per Share              Per Share
                                    Shares    Amount        Shares   Amount
                                   ---------- ----------  ---------  ---------
 Basic EPS                            46,422        .21     47,275        .20
 Effect of Dilutive Stock Options        418          -        380          -
                                   ---------- ----------  ---------  ---------
 Diluted EPS                          46,840        .21     47,655        .20
                                   ========== ==========  =========  =========

                                                First Six Months
                                   -------------------------------------------
                                           1999                 1998
                                   ---------------------  --------------------
                                              Per Share              Per Share
                                    Shares    Amount       Shares     Amount
                                   ---------- ----------  ---------  ---------
 Basic EPS                            46,408        .34     47,282        .30
 Effect of Dilutive Stock Options        277          -        329       (.01)
                                   ========== ==========  =========  =========
 Diluted EPS                          46,685        .34     47,611        .29
                                   ========== ==========  =========  =========

      The following  options were not included in the computation of diluted EPS
because the options' exercise price was greater than the average market price of
the common shares:

                                     Second Quarter        First Six Months
                                  --------------------  -----------------------
                                     1999       1998       1999        1998
                                  ---------  ---------  ----------  -----------
 Options to purchase shares of
 common stock (in thousands)           708        370        2,142        661









                                         7


<PAGE>



PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

      Certain  statements   contained  in  this  Item  2  are   "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995 and are thus  prospective.  The words  "expect",  "estimate",  and other
similar  expressions  which do not relate solely to historical  matters identify
forward-looking   statements.   Undue   reliance   should   not  be   placed  on
forward-looking  statements  because  they involve  known and unknown  risks and
uncertainties   which  may  cause  actual  results  to  differ  materially  from
anticipated,  projected  or implied  future  results.  Readers  are  referred to
Exhibit 99 to the Company's  Quarterly Report on Form 10-Q for the fiscal period
ended  March 1, 1996 for a  discussion  of certain  such  factors.  The  Company
disclaims any obligation to update such forward-looking statements.

Results of Operations

      The following  table  summarizes the Company's  performance for the second
quarter  and first six months of fiscal  1999 as compared to the results for the
same periods in fiscal 1998:

Increase (Decrease) Percent vs. 1998 Results:
                                           Second Quarter      Six Months

Net sales                                       16.1%             15.5%
Gross profit                                    18.6%             18.0%
Selling and administrative expenses             13.2%             13.5%
Operating income                                37.3%             36.8%
Income before income taxes*                      3.9%             16.2%
Net income*                                      1.7%             13.7%


Operating Ratios as a Percent to Net Sales:
                                         Second Quarter       Six Months
                                       ------------------  ------------------
                                         1999     1998      1999      1998
                                       -------- ---------  -------- ---------

Gross profit                              36.8%     36.1%    36.8%     36.0%
Selling and administrative expenses       27.3%     28.0%    28.6%     29.1%
Operating income                           9.6%      8.1%     8.2%      7.0%
Income before income taxes*                9.4%     10.6%     8.1%      8.1%
Net income*                                5.9%      6.7%     5.1%      5.1%

* 1998  results for the second  quarter and six months  include a one-time  gain
  related to a real estate sale.



                                      8


<PAGE>



PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS (Continued)

Net Sales

     Net sales in the second quarter of fiscal 1999  increased  $23.1 million or
16.1%  over the net sales  level for the same  period of fiscal  1998.  Over the
first six  months of fiscal  1999,  consolidated  net sales  increased  by $42.3
million, 15.5% above the sales for the comparable period of fiscal 1998. A 16.7%
increase in revenues from the  Company's  wholesale  divisions  during the first
half of fiscal 1999 combined with a 9% increase in sales of the Company's retail
division to produce the  consolidated  revenue  gain.  In the second  quarter of
fiscal  1999,  wholesale  division  revenues  increased  17.5% and retail  sales
increased 9% from the same period in fiscal 1998.  With respect to the wholesale
divisions of the Company,  unit shipments of current line merchandise during the
first  half of 1999 were 8% above the  comparable  period  in fiscal  1998.  The
Company's  average  selling  price was also  higher  in the  first  half of 1999
increasing 8% from 1998. The higher sales of current line merchandise during the
first half of fiscal 1999 was partially  offset by a 4% decrease in the sales of
discontinued products.

      In the  second  quarter  of  fiscal  1999,  Keds,  the  Company's  largest
business,  increased  sales 9% from 1998.  Sales of women's  products were up 3%
during the second quarter,  while  children's sales increased 22% over the prior
year.  Sales of Keds' new  products,  including the Ready to Wear(R) and Relaxed
Fit(TM)  collections,  more than  offset  the  continuing  sales  decline of the
Champion(R) style.  However,  during the April/May timeframe,  reorders for Keds
basic women's styles were below  expectations as sales trends at retail appeared
to  favor  sandals  and  other  fashion  products.  The  Company  is  increasing
promotions in the third quarter of 1999 and is accelerating  the introduction of
new styles later in the year to react to these trends. For the first six months,
Keds'  net sales  increased  10%  compared  to 1998,  with the sales of  women's
products  increasing 5% and sales of  children's  products up 31% from the first
half of 1998.

     The Stride Rite  Children's  Group had a s1ight decrease (1%) in the second
quarter of fiscal  1999,  the result of a 9% increase in retail  sales offset by
lower sales to  independent  accounts  which  declined  12% compared to the same
period in fiscal 1998.  During the second  quarter of 1999,  sales at comparable
company-owned  retail stores increased 6% from 1998. For the first six months of
fiscal 1999,  sales of the Stride Rite  Children's  Group  increased 2% from the
same period in 1998, the result of a 4% decline in sales to independent accounts
and a 9% increase in sales at company-owned  retail stores.  Sales at comparable
company-owned retail stores increased 7.1% during the first half of 1999. At the
end of the second quarter of fiscal 1999, the Company operated 201 stores, up 4%
from the 194 stores open at the end of the second quarter in fiscal 1998.





                                      9


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS (Continued)

      Sales of Tommy  Hilfiger  products in the second quarter of 1999 increased
114% as  compared  to the same  period in 1998.  The  introduction  of the Tommy
Hilfiger  women's  line offset  lower  revenues  from the Tommy  Hilfiger  men's
product  line.  Sales  for the first  six  months  of fiscal  1999 for the Tommy
Hilfiger  division  increased 94% as compared to the same period in 1998,  again
the result of the initial delivery of the women's Spring product line offsetting
lower revenues in the Tommy Hilfiger men's business. The lower Tommy men's sales
in the first half of 1999 were the result of a sharp  reduction  in the sales of
discontinued products, down 54% from 1998.

      Compared to the same period in fiscal 1998,  sales of the Sperry Top-Sider
division  increased 13% in the second quarter of fiscal 1999 and were 12% higher
for the first six months of fiscal 1999. The brand's  retailer  sales  incentive
program and the first  deliveries  of the "Pioneer  Collection"  of men's casual
styles helped generate the improved shipping performance. International revenues
in the second  quarter of 1999 were  below the  comparable  period of 1998 by $1
million or 15%, as the Company  continued to change  business  relationships  to
emphasize  license  royalty  arrangements.  For the  first  six  months of 1999,
International  revenues declined $1.5 million or 9.1% from the comparable period
of fiscal 1998.

Gross Profit

      During the first six months of fiscal 1999,  gross profit  increased $17.6
million,  a gain of 18% compared to the net sales increase of 15.5% for the same
period.  The  consolidated  gross  profit  percent  in the  first  half  of 1999
increased 0.8 percentage points, finishing at 36.8% in 1999 compared to 36.0% in
1998. The gross profit performance in the second quarter of 1999 was also higher
than the same period in fiscal 1998, 36.8% in 1999 compared to 36.1% in the 1998
second quarter.  The gross profit  percentage  improvement in 1999 was primarily
due to reductions in inventory obsolescence charges and sales allowances. In the
prior year, the slowdown in the sales of Tommy Hilfiger men's and boys' products
and  generally  weak  conditions  in the athletic  footwear  sector  resulted in
significant retailer sales allowances, order cancellations and related inventory
obsolescence  charges. In addition,  air freight costs were lower in fiscal 1999
as these costs were necessary in the prior year to meet the introductory  demand
of certain Keds "Relaxed Fit" styles.  The Company's 1998 second quarter and six
month gross profit performance was negatively  impacted by $0.9 million and $1.7
million, respectively, in start-up costs related to new product lines which were
introduced in the second half of the year.  The Company's  LIFO provision had an
unfavorable  impact on gross profit  comparisons for the second quarter of 1999,
with LIFO  decreasing  gross profit by $0.3 million  (0.2% of net sales) in 1999
compared to a favorable impact of $0.8 million (0.6% of net sales) in 1998.




                                      10



<PAGE>



PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS (Continued)


Operating Costs

      Selling and administrative expenses in the first six months of fiscal 1999
increased $10.7 million or 13.5% from the spending total in the first six months
of 1998.  This rate of increase  was below the overall  increase in net sales of
15.5% during the first half of 1999.  Operating  costs as a percentage  of sales
decreased from last year by 0.5 percentage points in the first six months (28.6%
in 1999 compared to 29.1% in 1998).  Advertising  expense increased 18.7% in the
first six  months,  representing  6.7% of net  sales in the first six  months of
1999,  which was 0.2  percentage  points  higher than the  spending  rate in the
comparable 1998 period.  Distribution  expenses represented 3.7% of net sales in
the first half of 1999, which was 0.3 percentage  points lower than the spending
rate in 1998. This lower level of distribution costs in 1999 was achieved due to
efficiencies  gained by higher volumes,  partially offset by the increased costs
associated  with the  outsourcing  of a portion  of the  Company's  distribution
function due to shipment capacity constraints.  In addition,  increased spending
in information technology, primarily related to the costs of installing enhanced
systems and achieving Year 2000 (Y2K)  compliance,  resulted in additional costs
of $3.0  million  compared to 1998.  Operating  costs in the first six months of
1998  included  $3.0  million  of  product  development  and other  selling  and
administrative  costs  related to new product  lines,  including  women's  Tommy
Hilfiger(R),  Nine West Kids(R) and Levi's(R) which generated  revenues starting
in the third quarter of 1998.

Other Income and Taxes

      Other income  (expense)  decreased  pre-tax  income by $0.3 million in the
first six months of fiscal 1999  compared to an increase of $3.1  million in the
first six months of fiscal 1998.  In fiscal 1998,  other income  included a $3.9
million  pre-tax  gain  from  the  sale  of  real  estate  formerly  used  as  a
distribution  center for the  Company's  wholly-owned  subsidiary,  Stride  Rite
Children's  Group,  Inc.  Interest  income  for the  first six  months  was $1.7
million,  down  slightly from the $1.8 million for the first six months of 1998.
Interest  expense  in the first six  months of 1999  increased  to $1.3  million
compared to $1.0 million in 1998, as the Company  maintained  higher  borrowings
than  in  1998  due  to  increased   working  capital  levels,   higher  capital
expenditures and expenditures  related to the Company's share repurchase program
in the  second  half of 1998.  Average  short-term  borrowings  in the first six
months of 1999 were $43.4  million,  30% above the average  borrowings  of $33.4
million in the comparable period of 1998.


                                      11


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS (Continued)

      The  provision  for income taxes  increased  $1.6 million in the first six
months of fiscal 1999 as compared to the similar period in fiscal 1998 primarily
due to the higher pre-tax income earned in the period. The 1999 effective income
tax rate was also  higher,  37.8%  compared to 36.5% in 1998,  due mostly to the
reduced tax savings related to a company-owned life insurance program.

Net Income

      Net income for the first six months of fiscal 1999 increased $1.9 million,
up 13.7% from the income earned in the first half of fiscal 1998.  The increased
net sales  level and the  improved  gross  profit  performance  were the primary
factors contributing to the improved earnings. Net income increased 38.7% in the
first half of 1999 when the one-time  gain related to the sale of real estate is
excluded  from  1998's  results.  The  Company's  return on net  sales  remained
constant at 5.1% in the first six months of 1999 as compared to 1998.

Liquidity and Capital Resources

      At May 28, 1999,  the Company's  balance sheet reflects a current ratio of
3.2 to 1 with no long-term  debt. The Company's cash and short-term  investments
totaled $30.6 million at the end of the latest quarter, slightly above the prior
year's  cash  and  investments  total  of  $29.6  million.  When  combined  with
intermediate-term fixed income investments, total available cash and investments
amounted to $41.8 million at May 28, 1999 compared to $38.3 million in 1998. The
Company uses bank lines of credit to fund seasonal  working  capital  needs.  No
borrowings  under  these lines of credit were  outstanding  as of May 28,  1999,
which is consistent with the second quarter of 1998.

      During the first six months of fiscal  1999,  the Company  generated  $9.5
million  of  cash  from  operations.  This  positive  cash  flow  amount  was an
improvement  over the $8.2  million  use of cash to fund  operations  during the
first six months of fiscal 1998.

      At May 28, 1999,  accounts  receivable and inventory levels totaled $195.9
million,  an  increase  of $11.1  million or 6% above the $184.8  million  asset
amount at the end of the second quarter of 1998.  Accounts receivable at the end
of the second  quarter of 1999  increased  only $1.2 million or 1.4% compared to
the prior year, well below the wholesale  businesses' sales increase of 17.5% in
the second quarter of 1999. Inventories were higher at the end of

                                      12


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS (Continued)

the second quarter of 1999, up $10.0 million or 10% from the 1998 level,  due to
additional  inventory  associated  with Keds new  basics  program  and the "Keds
Stretch" product line, which is being introduced in June.

      Additions to property and  equipment  totaled  $11.3  million in the first
half of 1999  compared to $10.7  million  for the same  period in 1998.  A large
portion of the Company's capital expenditures are related to information systems
in order to upgrade capabilities and to prepare for the Year 2000 transition.

Other Matters

      During the quarter, the Company continued its efforts to minimize the risk
of disruption from the "Year 2000 (`Y2K')  problem." This problem is a result of
computer  programs  having been written  using two digits  (rather than four) to
define the  applicable  year.  The  Company's  overall  plan to address  the Y2K
problem is described  more fully in its 1998 Annual Report on Form 10-K, and the
following is an update of the information included therein.

      Information Technology ("IT") Systems:

      Remediation efforts (including testing and certification) continued during
the first six months of fiscal  1999 with  respect to the  Company's  previously
identified  "critical"  and  "important"  IT business  systems.  The bulk of the
Company's  systems  have now been  tested and are  certified  as Y2K  compliant,
although  testing of a small  number of critical or important  business  systems
will not be completed until September 1999.

      Non-IT and Partner Systems:

      During the first six months of 1999,  the Company  continued its inventory
of  third  party  and   internal   embedded,   or  "non-IT"   systems.   Company
representatives  have  met  with  significant  sourcing  vendors  to  ensure  an
uninterrupted  supply of product  in the year 2000.  The  Company  has  compiled
detailed  information  regarding all of its significant  business  partners.  In
appropriate  cases,  the  Company has been  relying  upon  vendors'  testing and
certification  documents to validate that the related systems are Y2K compliant.
Where the Company does not have adequate  assurance that remediation  efforts by
third parties are on schedule, contingency plans are being developed to minimize
potential  disruption  from Y2K failures  experienced by our business  partners.
These plans include  avoidance of those partners who may present an unacceptable
level of risk.  Validation  efforts are expected to continue  through  September
1999.


                                      13


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS (Continued)

      Contingency Planning:

      Contingency  planning  has  been  developed  on a case by case  basis  and
includes  encouraging  customers  to  place  orders  before  potential  business
disruptions,  manual intervention of processes or finding alternative suppliers.
There  are,   however,   many  variables  and   uncertainties   surrounding  the
effectiveness  of  contingency  planning.  Thus,  there is no certainty that the
Company's  contingency plans will be adequate to mitigate the materially adverse
effect related to a large scale Y2K failure.

      Costs:

      Total anticipated expenditures related to the Y2K project remain on target
at approximately $24 million,  of which  approximately $17 million is related to
new systems which are being capitalized. Total Y2K project costs expended during
the first six months of 1999 amounted to approximately $6.5 million.





























                                      14


<PAGE>


PART II - OTHER INFORMATION

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      The Annual  Meeting of the  Company's  shareholders  was held on April 15,
1999. The three  directors  nominated by management were elected by the vote set
forth below:
                                                Votes
                                       ------------------------
         Name of Director              For         Withheld
         ----------------              ---         --------
         James A. Eskridge             39,769,024   501,552
         Frank R. Mori                 39,678,220   592,356
         Bruce Van Saun                39,745,485   525,091

The Company's  other  directors,  whose term of office  continues after the 1999
stockholders' meeting, are as follows:

                              Warren Flick
                              Donald R. Gant
                              Robert L. Seelert
                              Myles J. Slosberg
                              W. Paul Tippett, Jr.

The  Company's   shareholders   also   ratified  the   Company's   selection  of
PricewaterhouseCoopers  LLP. as auditors of the Company for the 1999 fiscal year
by the vote set forth below:

                         Votes
         ------------------------------------------------
               For        Against          Abstentions
               ---        -------          -----------

           40,080,871     112,592             77,113

The  shareholders  voted in favor of a proposal  requesting  that the  directors
consider  and act upon to approve The Stride  Rite  Corporation  1999  Executive
Long-Term Bonus Plan, by the vote set forth below:

                      Votes
         ------------------------------------------------
               For        Against          Abstentions
               ---        -------          -----------

           38,494,249     1,533,997          242,330

The shareholders also voted in favor of a proposal requesting that the directors
consider and act upon to approve  amendment to The Stride Rite  Corporation 1998
Non-Employee Director Stock Ownership Plan, by the vote set forth below:

                      Votes
         ------------------------------------------------
               For        Against          Abstentions
               ---        -------          -----------

           37,887,227     2,180,453          202,897

The shareholders also voted in favor of a proposal requesting that the directors
consider and act upon to approve the  amendment  to The Stride Rite  Corporation
1998 Stock Option Plan, by the vote set forth below:

                      Votes
         ------------------------------------------------
               For        Against          Abstentions
               ---        -------          -----------

           34,095,293     6,015,988          159,296


                                      15


<PAGE>


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K


         (a) Exhibits. The following exhibits are contained in this report:

                Exhibit No.          Description of Exhibit

                11                   Computation of Per Share Earnings
                27                   Financial Data Schedule

         (b)    Reports on Form 8-K

                There were no reports  filed on Form 8-K during the most  recent
                quarterly period. On July 9, 1999, the Company filed a report on
                Form 8-K  describing  the  resignation  of James A.  Eskridge as
                Chairman and Chief Executive Officer of the Company. The Company
                also  announced  that its  Board  of  Directors  named  Myles J.
                Slosberg as interim  Chairman  and CEO,  pending the  successful
                search and  selection of a new Chairman and CEO. For  additional
                information,  reference is made to the Form 8-K filed on July 9,
                1999.




























                                      16


<PAGE>


                           THE STRIDE RITE CORPORATION


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned duly authorized.
                                    THE STRIDE RITE CORPORATION
                                      (Registrant)



Date:  July 12, 1999                By:  /S/ John M. Kelliher
                                    ---------------------------
                                      John M. Kelliher
                                      Chief Financial Officer































                                      17


<PAGE>



                           THE STRIDE RITE CORPORATION

                                INDEX TO EXHIBITS




    Exhibit                                            Sequential Page
      No.                                                    No.

       11      Computation of Per Share Earnings             19 of 20
       27      Financial Data Schedule                       20 of 20





































                                      18


<PAGE>