1 of 17 Pages
                                                             Exhibit Index
                                                        Appears on page 14

                 SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549
                             FORM 10-Q
                                         (Mark One)

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

   For the quarterly period ended August 30, 1996

                               OR

           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
              of incorporation)                    Identification No.)

             191 Spring Street, Lexington, Massachusetts 02173
            (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  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                           Yes   X        No

   As of October 7, 1996,  49,616,821  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)

<TABLE>
<CAPTION>
                                 Aug. 30,                        Sept. 1,
                                   1996        December 1,         1995
                                (Unaudited)       1995          (Unaudited)
Assets

Current Assets:

<S>                                <C>           <C>             <C>     
  Cash and cash equivalents        $41,080       $ 28,130        $ 12,574

  Short-term investments            30,016         26,211          35,972

  Accounts and notes
    receivable, net                74,959          48,066          98,513

  Inventories:
    Finished goods                  91,210        141,914         116,555
    Work in process                  1,070            863             699
    Raw materials                    5,048          2,721           2,128
                                   -------        -------         -------
                                    97,328        145,498         119,382
  Deferred income taxes
    and prepaid expenses            43,881         44,458          38,879
                                   -------        -------          ------

    Total current assets           287,264        292,363         305,320

Property and equipment, net         54,275         60,434          53,260

Other assets                        16,602         13,819          18,437
                                   -------       --------        --------

    Total assets                  $358,141       $366,616        $377,017
                                  ========       ========        ========
</TABLE>








         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)
<TABLE>

<CAPTION>
                                         Aug. 30,                    Sept. 1,
                                          1996       December 1,       1995
                                       (Unaudited)      1995        (Unaudited)

Liabilities and Stockholders' Equity

Current Liabilities:

  Current maturities of long-term
<S>                                     <C>           <C>          <C>      
    debt                                $       833   $      833   $     833
  Short-term debt                                 -            -       1,000
  Accounts payable                           13,591       22,963      11,740
  Income taxes payable                       25,592       19,492      33,693
  Accrued expenses and other
    liabilities                              39,454       44,290      30,726
                                            -------      -------     -------
  Total current liabilities                  79,470       87,578      77,992

Deferred income taxes                         9,444       10,749       8,132

Long-term debt                                  833          833       1,667

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

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

  Capital in excess of par value             22,745       23,006      23,365

  Retained earnings                         323,711      323,566     347,010

  Less cost of 7,332,306  shares of
   common stock held in treasury
   (7,416,037 on December 1, 1995
   and 7,576,787 on September 1, 1995)      (92,299)     (93,353)    (95,386)
                                            -------      -------     -------

  Total stockholders' equity                268,394      267,456     289,226
                                            -------      -------     -------

  Total liabilities and
    stockholders' equity                   $358,141     $366,616    $377,017
                                           ========     ========    ========
</TABLE>

           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 August 30, 1996 and September 1, 1995
                         (In Thousands Except Per Share Data)
<TABLE>

<CAPTION>
                               Three Months Ended           Nine Months Ended
                            Aug. 30,1996 Sept. 1,1995 Aug. 30,1996 Sept. 1,1995


<S>                           <C>         <C>          <C>            <C>     
Net sales                     $123,540    $139,140     $366,624       $418,298

Cost of sales                   80,067      91,168      240,469        267,884

Selling and administrative
  expenses                      40,061      42,228      116,065        129,506
                              --------    --------    ---------      ---------

Operating income                 3,412       5,744       10,090         20,908

Other income (expense):
  Interest income                  878         750        2,347          2,375
  Interest expense                 (38)        (90)        (666)          (801)
  Other, net                      (346)       (712)      (1,656)        (2,119)
                                ------     -------      -------        -------
                                   494         (52)          25           (545)
                                ------     --------------------        -------

Income before income taxes       3,906       5,692       10,115         20,363

Provision for income
  taxes                            713       2,205        2,532          7,900
                                ------    --------     --------       --------

Net income                    $  3,193    $  3,487     $  7,583        $12,463
                              ========    ========     ========        =======

Net income per
  common share                    $.06        $.07         $.15           $.25
                                  ====        ====         ====           ====

Dividends per common share        $.05       $.095         $.15          $.285
                                  ====       =====         ====          =====

Average common shares
  and common equivalents
  outstanding during
  the period                    49,831      49,741       49,827         49,816
                                ======      ======       ======         ======
</TABLE>




             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 nine months ended August 30, 1996 and September 1, 1995
                            (Dollars In Thousands)
<TABLE>

                                                      Aug.30, 1996  Sept.1, 1995
Cash was provided from (used for) Operations:
<S>                                                      <C>          <C>    
  Net income                                             $ 7,583      $12,463
  Adjustments to reconcile to net cash provided
    from (used for) operations:
  Depreciation and amortization                            7,601        8,459
  Deferred income taxes, net                                (375)           -
  Equity in loss (earnings) of affiliate                     559         (149)
  Loss on disposals of property and equipment              1,564          407
  Loss related to impairment of asset                      3,800            -
  Gain related to long-term investment                      (171)           -
  Changes in:
    Accounts and notes receivable                        (26,893)     (35,110)

    Inventories                                           48,170       37,446               37,446

    Long-term notes receivable                                61            -
    Prepaid expenses                                        (353)        (904)
    Accounts payable, income taxes, accrued
      expenses and other current liabilities               (7,335)    (16,956)
                                                          -------     -------
    Net cash provided from operations                      34,211       5,656
                                                          -------     -------

Investments:
  Short-term investments                                  (3,805)      (5,438)
  Additions to property and equipment                     (5,966)     (11,934)
  Proceeds from sales of property and equipment              270           30
  Purchase of noncurrent marketable securities            (5,989)           -
  Distributions and dividends from long-term
    investments                                            2,622           98
  Acquisition of business                                      -       (5,308)
  Increase in other assets                                  (973)        (831)
                                                         -------      -------
    Net cash used for investments                        (13,841)     (23,383)
                                                         -------      -------

Financing:
  Proceeds from sale of stock under stock plans               15           12
  Cash dividends paid                                     (7,435)     (14,118)
  Repurchase of common stock                                   -       (2,006)
  Short-term debt                                              -        1,000
                                                         -------      -------
    Net cash used for financing                           (7,420)     (15,112)
                                                         -------      -------
Net increase (decrease) in cash and cash equivalents      12,950      (32,839)
Cash and cash equivalents at beginning of the period      28,130       45,413
                                                         -------      -------
Cash and cash equivalents at end of the period           $41,080      $12,574
                                                         =======      =======
</TABLE>

    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 August 30, 1996 and Sep tember
1, 1995 is unaudited and subject to year-end audit  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 nine-month  period ended August 30, 1996 are not  necessarily
indicative  of the results of  operations  that may be expected for the complete
fiscal  year.  The year-end  condensed  bal ance sheet data was derived from the
Company's  audited  financial  statements,  but does not include all disclosures
required by generally accepted accounting principles.  Certain reclassifications
have  been  made to the 1995  condensed  consolidated  financial  statements  to
conform to the fiscal 1996 presentation.

                                          NOTE 2

     During the first nine months of fiscal 1996,  interest payments amounted to
$558,000  ($780,000  in 1995).  For the first nine  months of 1996,  the Company
received net refunds of income taxes amounting to $3,193,000.  In the first nine
months of fiscal 1995, payments for income taxes totaled $7,374,000.




















                                            6


<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. Such forward-looking statements are subject to
risks,  uncertainties  and other  factors  which could cause  actual  results to
differ   materially   from  future   results   expressed   or  implied  by  such
forward-looking statements.  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 some of such factors.

Results of Operations

     The following  tables  summarize the  Company's  performance  for the third
quarter and nine-month period:

Percent Increase (Decrease) vs. 1995 Results for the Comparable Period:

<TABLE>
                                         Third Quarter   Nine Months

<S>                                          <C>           <C>    
Net sales                                    (11.2%)       (12.4%)
Gross profit                                  (9.4%)       (16.1%)
Selling and administrative expenses           (5.1%)       (10.4%)
Operating income                             (40.6%)       (51.7%)
Income before income taxes                   (31.4%)       (50.3%)
Net income                                    (8.4%)       (39.2%)
</TABLE>

Operating Ratios as a Percentage of Net Sales:
<TABLE>

<CAPTION>
                                  Third Quarter              Nine Months
                                  1996        1995         1996       1995

<S>                               <C>         <C>          <C>        <C>  
Gross Profit                      35.2%       34.5%        34.4%      36.0%
Selling and administrative
  expenses                        32.4%       30.3%        31.7%      31.0%
Operating income                   2.8%        4.1%         2.8%       5.0%
Income before income taxes         3.2%        4.1%         2.8%       4.9%
Net income                         2.6%        2.5%         2.1%       3.0%
</TABLE>


                                            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

Results of Operations (cont'd)

     Net sales in the third  quarter  of fiscal  1996  decreased  $15.6  million
(11.2%) from the net sales level  achieved in the  comparable  period in fis cal
1995. For the first nine months of fiscal 1996, net sales were below last year's
comparable  period by $51.7 million or 12.4%. A 15% decline in revenues from the
Company's  wholesale  divisions  during the first nine months of fiscal 1996 was
partially offset by increased  retail sales in the same period.  With respect to
the  wholesale  divisions  of  the  Company,  unit  shipments  of  current  line
merchandise  during the first nine months of 1996 were down 10.8% from shipments
in the comparable  period of fiscal 1995. Lower sales of discontinued  products,
down 3.8% in the nine  months,  a slight  decline in average  selling  price and
increased promotional allow ances at Keds also contributed to the sales decrease
in the first nine months of 1996 as compared to the same period in fiscal  1995.
Excluding  the  impact of  product  mix  changes,  net sales in the nine  months
increased by approximately $0.7 million due to selling price inflation.

     The sales decline in the Company's  wholesale  businesses  during the third
quarter  and  first  nine  months  of fiscal  1996 was  largely  caused by lower
revenues of the Company's Keds division.  Keds' sales were down 29% in the third
quarter of 1996 and, for the  nine-month  period were below the same period last
year by 23%.  A 2%  increase  in  reorders  in the  third  quar  ter of 1996 was
insufficient  to offset the impact of lower  advance  bookings  from a weak Fall
season  product  offering.  This  unfavorable  performance  in the third quarter
continued  the business  trends which  occurred  during the first half of fiscal
1996.  Entering  fiscal 1996,  the backlog of advance  orders for Keds products,
calling for  shipment  in the first  quarter of 1996,  was below  backlog at the
outset of fiscal 1995,  reflecting  the Spring 1996 sales policies for Keds core
products,  which emphasized the division's  quick-response reorder capabilities.
This policy change was intended to shift product deliveries closer to the retail
selling season  resulting in lower retailer  inventories  and improved  retailer
profitability. This pol icy change continued for the Fall season of fiscal 1996.
As a result of this policy change, in fiscal 1996, Keds' success depended,  more
heavily than in past years, on retail sell-through performance and the resulting
reorder  activity.  Given  the  weakness  of the Fall  product  line and a lower
backlog of advance  orders,  the Keds  division  is expected to continue to show
lower sales in the fourth quarter of fiscal 1996.

     The other wholesale  divisions of the Company posted improved sales results
in the third quarter of 1996 compared to the third quarter of 1995,

                                      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

Results of Operations (Continued)

with Stride Rite Children's  Group revenues up 12%,  Sperry  Top-Sider divi sion
sales  above 1995 by 2% and the  Company's  International  division  achieving a
sales gain of 34%.  For the first nine months of 1996,  sales of the Stride Rite
Children's Group to independent  dealers and department stores increased 1% from
the comparable period in fiscal 1995. Sales of the Sperry Top-Sider  division in
the first  nine  months of 1996 were even with 1995 as a result of late  product
deliveries and resulting low inventory  levels which prevented the division from
fully  capitalizing on a favorable  reaction to Sperry's 1996 product lines. For
the first nine months of 1996, the Company's  International division experienced
an  increase of 2% from the sales level  achieved  in the  comparable  period of
1995.

     For the first nine months of fiscal  1996,  sales of the  Company's  Retail
division,  which  includes  the  Stride  Rite  children's  booteries  and leased
departments, manufacturers' outlets and the initial stores of the Great Feet(TM)
and Keds retail  concepts,  increased 2% from the first nine months of 1995 as a
more productive store mix offset the impact of store closings and a 0.6% decline
in sales at comparable stores.  During the first nine months of 1996, the Retail
division  operated  an average of 232  stores,  down 14% from the average of 269
stores  operated  during the same period of 1995.  In the third quarter of 1996,
Retail  Division  sales were down 2% from the  comparable  period in 1995 as the
lower store count offset a 0.4% increase in sales at comparable stores.  Average
store sales volumes  improved during the first nine months of 1996 following the
closing of 28 low-volume leased  departments during the fourth quarter of fiscal
1995.  During the first nine months of 1996,  the Company also  eliminated 30 of
the 48 underperforming retail operations which were targeted for closing in 1996
as  part of the  Company's  restructuring  plan  and  closed  an  additional  16
low-volume leased  departments which were marginally  profitable.  At the end of
the third quarter of 1996, the Retail  division  operated 212 stores compared to
279 stores in August 1995.

     During the first nine months,  gross profit  declined 16.1% compared to the
sales  decline of 12.4%.  Gross  profit  was also lower in the third  quarter of
1996,  showing a decrease of 9.4%,  while sales declined by 11.2% as compared to
the third quarter of 1995. The consolidated  gross profit percentage in the nine
months  decreased to 34.4% in 1996 from the 36% rate recorded in 1995. The gross
profit rate for the third  quarter of 1996  finished  above last year,  35.2% in
1996 compared to 34.5% in 1995. The LIFO provision  reduced gross profit by $1.7
million (0.5% of net sales) in
                                      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

Results of Operations (Continued)

1996  nine-month  period  compared to a provision of $2.3  million  (0.6% of net
sales) in the first nine months of 1995.  The LIFO  adjustment  increased  gross
profit for the third quarter of 1996 by $1.1 million (0.9% of sales) compared to
a reduction of $0.6 million (0.4% of sales) in the  comparable  period of fiscal
1995.  The reduced  importance of Keds sales,  especially in the  higher-margin,
Champion(R)  canvas product category,  to consolidated  sales contributed to the
decline in gross profit percent between the 1996 and 1995 periods.  Gross profit
performance  in the third quarter and first nine months of 1996 was also hurt by
the cost of special promotions to help the retail  sell-through of Keds products
during  the Spring  and early  Summer  selling  periods.  Unfavorable  variances
related to domestic manufacturing operations,  which included the phase-out of a
children's facility in Mis souri,  reduced gross profit in the first nine months
of  1996  by  0.8  per  centage   points,   an  increase  from  the  unfavorable
manufacturing  variances of 0.5 points  experienced during the comparable period
of 1995.  The consoli dated gross profit  percentage  was favorably  impacted in
1996 by the increased  contribution to sales of the Retail division, the portion
of the  Company  with the  highest  gross  profit  percentage,  as retail  sales
accounted for 18% of  consolidated  net sales in 1996 compared to 15.5% of sales
in the first nine months of 1995.

     Selling and administrative expenses in the first nine months of fiscal 1996
decreased  $13.4 million or 10.4% from the spending  level  incurred  during the
same  period  of  fiscal  1995.  In the  third  quarter  of  1996,  sell ing and
administrative  expenses  decreased  $2.2  million or 5.1% below the  comparable
period in fiscal 1995.  As a percentage  of sales,  these  expenses  represented
31.7% of net  sales in the  first  nine  months of 1996,  an  increase  from the
spending rate of 31%  experienced in the first nine months of 1995.  Expenses in
the third  quarter and  nine-month  period of 1996 in cluded a provision of $3.8
million related to the impairment in value of certain  software related expenses
which were capitalized in prior years.  Excluding this  adjustment,  selling and
administrative expenses were below 1995 by 14.1% for the third quarter and 13.3%
for the nine months.  Lower advertising spending accounted for more than half of
the  expense  reduction.  Advertising  expenses in the first nine months of 1996
totaled $20.1 million (5.5% of sales), down $7.3 million from the spending level
of $27.4 million (6.5% of sales) in the 1995 period.  While  distribution  costs
decreased  $0.4  million or 2% from the first nine  months of 1995,  these costs
repre sented 4.4% of sales in the first nine months of 1996  compared to 3.9% in
1995. Retail store expenses in the 1996 nine-month period decreased $0.5 million
from 1995 as the closing of underperforming retail
                                     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

Results of Operations (Continued)
locations during 1996 more than offset the increased costs related to new stores
opened in fiscal 1995.  Other selling and  administrative  costs,  excluding the
software  asset  adjustment  described  above,  in the first nine months of 1996
decreased  $9.1 million or 14.4% from the  comparable  period in 1995 due to the
lower  sales  level  experienced  in the  wholesale  divisions  and the  actions
initiated  in the  second  half of 1995 to  consolidate  certain  administrative
functions  and to reduce  overall  spending.  Efforts  continue to be focused on
further  streamlining of the Company's business processes in order to attempt to
reduce the expense structure.

     Other income (expense)  increased pre-tax income slightly in the first nine
months of 1996 compared to an income  decrease of $0.5 million in the comparable
period of fiscal 1995.  Interest income during the first nine months of 1996 was
slightly below last year as higher levels of investable  funds offset  decreased
short-term investment yields.  Interest expense in the first nine months of 1996
was  below the 1995  expense  level due to lower  interest  rates  (5.9% in 1996
compared to 6.2% in 1995).  Other expenses,  which are primarily  related to the
costs of a company-owned life insurance  program,  decreased $0.5 million in the
first nine months of 1996 from the  expense  level in the  comparable  period of
fiscal 1995. The provision for income taxes in the first nine months of 1996 was
below  1995 due to the lower  pre-tax  income and a lower  effective  income tax
rate.  The 1996  effec  tive  income  tax rate of 25% was below the 1995 rate of
38.8% due to the increased  impact of tax savings  related to the  company-owned
life insurance program.

     During the first nine  months of fiscal  1996,  net income  decreased  $4.9
million or 39.2% compared to the first nine months of fiscal 1995 because of the
sales decline and lower gross profit performance  described above. For the third
quarter of fiscal 1996, net income decreased $0.3 million or 8.4% from the third
quarter  of 1995 as a  higher  gross  profit  percentage,  reduced  selling  and
administrative  expenses and a lower effective  income tax rate partially offset
the lower income caused by the sales decline.

Liquidity and Capital Resources

     At August 30, 1996, the Company's balance sheet reflects a current ratio of
3.6 to 1 and a  debt-to-equity  relationship  of 0.3%.  The  Company's  cash and
short-term  investments  totaled $71.1 million at the end of the quarter,  above
the fiscal  year-end  1995 level of $54.3  million and the cash and  investments
balance of $48.5 million as of September 1, 1995. Addi tionally, other assets at
August 30, 1996 includes $6 million of

                                      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

Liquidity and Capital Resources (Continued)

medium-term,  fixed income  securities  under an  investment  program  initiated
during the third  quarter of 1996.  During  the first nine  months of 1996,  the
Company's  operations  generated  $34.2  million of cash as compared to the $5.7
million of funds generated by operations in the comparable period of 1995.

     At August 30, 1996, inventory and receivable levels totaled $172.3 million,
down $45.6 million or 21% from the $217.9 million amount at the end of the third
quarter in fiscal  1995.  Inventory  levels at August  30,  1996 were down $22.1
million or 18.5% from the total at  September  1, 1995 due to the store  closing
and reductions in Stride Rite and Sperry  Top-Sider  inventories from the levels
maintained  in 1995.  Receivables  were also lower at August 30, 1996,  with the
decrease from the 1995 level caused by the lower sales level  experienced in the
first nine months of 1996.

     The  Company  uses bank lines of credit to fund  seasonal  working  capital
needs. No short-term borrowings were outstanding at August 30, 1996, as compared
to the $1  million  debt  level at  September  1,  1995.  Average  out  standing
borrowings  under these  lines of credit  during the first nine months of fiscal
1996 amounted to $12.2 million compared to $14 million in the comparable  period
of fiscal 1995.

PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits.  The following Exhibits are contained herein:

              Exhibit No.             Description of Exhibit

                   11                  Computation of Per Share Earnings
                   27                  Financial Data Schedule

         (b)  Reports on Form 8-K

                 The Company did not file any current reports on Form 8-K during
                 the third quarter of fiscal year 1996.



                                       12



<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  signedon  its  behalf  by the
undersigned duly authorized.



                                          THE STRIDE RITE CORPORATION
                                         (Registrant)



Date: October 15, 1996             By:/s/  John M. Kelliher
                                      ---------------------
                                      John M. Kelliher
                                      Vice President, Finance,
                                      Treasurer, and Corporate Controller



























                                            13



<PAGE>



                 THE STRIDE RITE CORPORATION


                                     INDEX TO EXHIBITS



Exhibit No.

                               Sequential Page No.

    11           Computation of Per Share Earnings        Page 15 of 17

    27           Financial Data Schedule                  Pages 16 and 17
                                                                   of 17


































                                               14


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