1 of 17 Pages
                                                            Exhibit Index
                                                            Appears on Page 14



                       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 August 29, 1997

_____       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.)
            of incorporation)

              191 Spring Street, Lexington, Massachusetts 02173
(Address of principal executive offices)                     (Zip Code)

      Registrant's telephone number, including area code: (781)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 October 6, 1997, 47,718,394 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>
                                     August 29,                     August 30,
                                         1997       November 29,        1996
                                     (Unaudited)         1996        (Unaudited)
Assets

Current assets:
<S>                                     <C>           <C>            <C>
  Cash and cash equivalents             $  7,606      $ 57,269       $ 41,080

  Short-term investments                  44,504        34,611         30,016

  Accounts and notes receivable, net      85,893        44,866         74,959

  Inventories:
   Finished goods                        114,592       115,468         91,210
   Work in process                           501           615          1,070
   Raw materials                             919         3,004          5,048
                                        --------
                                         116,012       119,087         97,328

  Deferred income taxes and
   prepaid expenses                       35,633        40,295         43,881
                                        --------

  Total current assets                   289,648       296,128        287,264

Property and equipment, net               54,016        52,894         54,275

Other assets                              18,791        15,308         16,602
                                        --------

  Total assets                          $362,455      $364,330       $358,141
                                        ========
</TABLE>










              Theaccompanying  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>
                                      August 29,                     August 30,
                                         1997        November 29,       1996
                                      (Unaudited)        1996        (Unaudited)
Liabilities and Stockholders' Equity

Current Liabilities:
  Current maturities of
<S>                                     <C>             <C>            <C>
   long-term debt                       $    833        $    833       $    833
  Short-term debt                          9,700               -              -
  Accounts payable                         9,266          25,488         13,591
  Income taxes payable                    27,069          25,618         25,592
  Accrued expenses and other
   liabilities                            57,662          42,592         39,454
                                        --------
  Total current liabilities              104,530          94,531         79,470

Deferred income taxes                      8,796           8,275          9,444

Long-term debt                                 -               -            833

Stockholders' Equity:
  Preferred stock, $1.00 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          22,643          22,778         22,745

  Retained earnings                      328,263         316,142        323,711

  Less cost of 9,228,150 shares of
   common stock held in treasury
   (7,279,457 on November 29, 1996
   and 7,332,306 on August 30, 1996)    (116,014)        (91,633)       (92,299)
                                        ---------

  Total stockholders' equity             249,129         261,524        268,394
                                        --------        ----------     --------

  Total liabilities and stockholders'
   equity                               $362,455        $364,330       $358,141
                                        ========
</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 29, 1997 and August 30, 1996
                      (In Thousands Except Per Share Data)

 <TABLE>
                        Three Months Ended                  Nine Months Ended

<CAPTION>
                            August 29,    August 30,   August 29,    August 30,
                               1997          1996         1997          1996
                            ----------    ----------   ----------    ----------

<S>                          <C>            <C>          <C>           <C>
Net sales                    $144,463       $123,540     $417,872      $366,624

Cost of sales                  90,419         80,067      266,555       240,469

Selling and
  administrative expenses      41,632         40,061      121,996       116,065
                             ----------      --------    --------      --------

Operating income               12,412          3,412       29,321        10,090

Other income(expense):
  Interest income               1,111            878        2,954         2,347
  Interest expense                (70)           (38)        (151)         (666)
  Other, net                     (561)          (346)      (1,742)       (1,656)
                              --------
                                  480            494        1,061            25
                              --------

Income before income taxes     12,892          3,906       30,382        10,115

Provision for income taxes      4,706            713       10,999         2,532
                             ---------

Net income                   $  8,186        $ 3,193     $ 19,383      $  7,583
                             =========

Net income per share         $    .17        $   .06     $    .39      $    .15
                             =========

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

Average common shares and
  common equivalents
  outstanding during the
  period                       48,675         49,831       49,341        49,827
                              ========
</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 29, 1997 and August 30, 1996
                         (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                     August 29,      August 30,
                                                        1997            1996
                                                    -----------    ------------
Cash was provided from (used for) Operations:
<S>                                                      <C>          <C>
  Net income                                             $19,383      $  7,583
  Adjustments to reconcile to net cash provided
    from (used for)operations:
  Depreciation and amortization                            7,880         7,601
  Deferred income taxes, net                                 477          (375)
  Compensation expense related to executive stock
   plans                                                     443           393
  Equity in loss of affiliate                                400           559
  Loss on disposal of property and equipment                 717         1,564
  Loss related to impairment of asset                          -         3,800
  Gain related to long-term investment                         -          (171)
  Changes in:
   Accounts and notes receivable                        (41,027)       (26,893)
   Inventories                                             3,075        48,170
   Long term notes receivable                                  -            61
   Prepaid expenses                                        4,706          (353)
   Accounts payable, income taxes, accrued expenses
     and other current liabilities                           430        (7,728)
                                                         ---------    ---------

  Net cash provided from (used for) operations           (3,516)        34,211
                                                        --------      --------
Investments:

  Short-term investments                                 (9,893)        (3,805)
  Additions to property and equipment                    (9,759)        (5,966)
  Proceeds from sales of property and equipment             259            270
  Purchase of noncurrent marketable securities           (2,464)        (5,989)
      Distributions and dividends from long-term
            investments                                        -         2,622
  Increase in other assets                               (1,605)          (973)
                                                        --------      ---------
  Net cash used for investments                         (23,462)       (13,841)
                                                        --------      ---------
Financing:
  Proceeds from sale of stock under stock plans              536            15
  Cash dividends paid                                    (7,364)        (7,435)
  Repurchase of common stock                            (25,557)            -
  Short-term debt                                         9,700             -
                                                        --------       --------
  Net cash used for financing                           (22,685)        (7,420)
                                                        --------      ---------
Net increase (decrease) in cash and cash
  equivalents                                           (49,663)        12,950
Cash and cash equivalents at beginning of the
  period                                                 57,269         28,130
                                                        --------      --------
Cash and cash equivalents at end of the period          $ 7,606       $ 41,080
                                                        =========     ========
</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 29, 1997 and August 30,
1996 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 29, 1997 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 the
Company's  audited  financial  statements,  but does not include all disclosures
required  by  generally   accepted   accounting   principles.   For   additional
information,  reference is made to the Company's  financial  statements (and the
notes  thereto)  included in the  Company's  Form 10-K for the fiscal year ended
November  29,  1996.  Certain  reclassifications  have  been  made  to the  1996
condensed  consolidated  financial  statements  to conform  to the  fiscal  1997
presentation.

                                     NOTE 2

     During the first nine months of fiscal 1997,  interest payments amounted to
$140,000  ($558,000  in 1996).  For the first nine months of 1997,  payments for
income taxes totaled  $2,283,000  and, in the comparable  period of fiscal 1996,
the Company received net refunds of income taxes which amounted to $3,193,000.



















                                      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,  projected 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 certain of such factors.  The Company  disclaims any obligation to
update any of such forward-looking statements.

Results of Operations

     The following  table  summarizes  the Company's  performance  for the third
quarter  and first nine months of fiscal 1997 as compared to the results for the
same periods in fiscal 1996:

Increase (Decrease) Percent vs. 1996 Results:

<TABLE>
<CAPTION>
                                         Third Quarter        Nine Months

<S>                                          <C>                 <C>
Net sales                                    16.9%               14.0%
Gross profit                                 24.3%               19.9%
Selling and administrative expenses           3.9%                5.1%
Operating income                            263.8%              190.6%
Income before income taxes                  230.1%              200.4%
Net income                                  156.4%              155.6%
</TABLE>


Operating Ratios as a Percentage to Net Sales:

<TABLE>
<CAPTION>
                                        Third Quarter         Nine Months

                                        1997        1996       1997        1996
                                        ----        ----                   ----

<S>                                    <C>         <C>        <C>         <C>
Gross profit                           37.4%       35.2%      36.2%       34.4%
Selling and administrative expenses    28.8%       32.4%      29.2%       31.7%
Operating income                        8.6%        2.8%       7.0%        2.8%
Income before income taxes              8.9%        3.2%       7.3%        2.8%
Net income                              5.7%        2.6%       4.6%        2.1%
</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 (continued)

     Net sales in the third  quarter of fiscal 1997  increased  $20.9 million or
16.9% from the net sales level achieved in the comparable period of fiscal 1996.
For the first nine months of fiscal 1997, consolidated net sales were above last
year's  first nine months by $51.2  million or 14%. An 18%  increase in revenues
from the Company's  wholesale  divisions  during the first nine months of fiscal
1997 offset a 4.4% decline in retail sales in the latest  nine-month  period. In
the third quarter of fiscal 1997,  wholesale  division revenues  increased 20.7%
from the same period of fiscal 1996,  while retail sales  increased  0.5%.  With
respect to the  wholesale  divisions of the Company,  unit  shipments of current
line  merchandise  during the first nine  months of 1997 were 9% higher than the
comparable period in 1996 and average selling prices in the first nine months of
1997  increased  9.1% from last year,  primarily due to the mix of sales between
the  Company's  various  branded  divisions.  The higher  sales of current  line
merchandise  during the first nine  months of 1997  offset a 33%  decline in the
sales of  discontinued  products  compared to the prior  period.  Excluding  the
impact of  product  mix  changes,  net sales in the  first  nine  months of 1997
decreased by approximately $3.1 million due to selling price deflation.

     In the third  quarter and first nine months of fiscal 1997,  the  increased
revenues of the  Company's  wholesale  businesses  reflected the shipment of the
initial orders of its Tommy  Hilfiger(R)  division.  The Tommy Hilfiger(R) men's
product  line,  which is being  marketed  under a license  agreement  with Tommy
Hilfiger(R)  Licensing,  Inc., was introduced to consumers in leading department
stores and other  specialty  retailers  on  February  1, 1997.  The Spring  1997
product line included  athletic,  sport and casual  collections  for men. In the
third quarter of 1997, the Tommy  Hilfiger(R)  division  introduced  outdoor and
dress styles for men and delivered an expanded men's athletic product line and a
boys' product line for  back-to-school  selling.  The Company's  other wholesale
divisions also  contributed  to the higher  revenues in the first nine months of
1997. Sales of the Stride Rite Children's Group to independent  dealers,  family
shoe stores and department stores during the nine-month period of 1997 increased
2% as compared to sales in the same period of 1996.  However,  Children's  Group
sales in the third  quarter  of 1997  decreased  1% from 1996 as  reorders  from
department  store  accounts  were slower than  expected.  Shipments in the third
quarter of 1997 were also impacted by the labor action at United Parcel  Service
of America, Inc. which caused some level of business disruption during August, a
critical month in the back-to-school  season. For the nine-month period of 1997,
Sperry  Top-Sider  sales were 14% higher  than 1996 with a 24%  increase  in the
sales of  current  line  merchandise  offsetting  a 50%  decline in the sales of
discontinued products.

                                      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:

The Sperry Top-Sider divisions' sales during the third quarter of 1997 decreased
3% as compared  to the same  period in fiscal  1996 as  reorders  for basic boat
shoes   slowed.During  the  third  quarter  of  1997,  sales  of  the  Company's
International  division  increased  20% from 1996.  For the first nine months of
1997,  International  division  sales  were above  1996 by 37%,  reflecting  the
introduction  of Tommy  Hilfiger(R)  products  in Canada and Latin  America  and
increased sales of Sperry Top-Sider and Keds products in South America. Sales of
the Keds  division  decreased  16% during the third quarter of 1997 and declined
11% for the first nine months of 1997 as compared to the same  periods in fiscal
1996. Sales of Keds current line merchandise  declined 8% from 1996 for both the
third quarter and nine-month periods, while sales of discontinued styles in 1997
declined  67% for the third  quarter and 37% for the nine  months.  In the first
nine months of 1997,  weak reorders  resulted in a 17% reduction in the sales of
the basic  Keds  Champion(R)  product  line.  Sales of Keds new  "Ready to Wear"
style, which was introduced in a leather version during the third quarter,  were
not sufficient to offset the Champion(R) decline.

     For the first nine months of fiscal  1997,  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, decreased 4.4% from 1996 as a lower store count offset
a 3.1%  increase in sales at comparable  stores.  In the third quarter of fiscal
1997,  comparable store sales were increased 5% from the same period in 1996. At
the end of the third quarter of 1997, the Retail  division  operated 204 stores,
down 4% from the total of 212 stores open in August 1996.

Gross Profit

     During the first nine months of fiscal 1997,  gross profit  increased $25.2
million from the comparable  period in 1996, a gain of 19.9% compared to the net
sales  increase  of 14% over the same  period.  The  consolidated  gross  profit
percentage  in the first nine months of 1997  increased 1.8  percentage  points,
finishing  at  36.2%  in 1997  compared  to 34.4%  in  1996.  The  gross  profit
performance  also improved in the third quarter of 1997 as compared to 1996 with
the consolidated gross profit percentage  improving 2.2 percentage points in the
quarterly  period to 37.4%.  The increased sales of current line merchandise and
the lower sales of discontinued styles in the first nine months of 1997 produced
a more profitable  product mix than in the comparable period of 1996.  Inventory
obsolescence charges and retail markdowns were


                                      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:

lower  in the 1997  period  due to a more  disciplined  approach  to  purchasing
seasonal  products.  The LIFO  provision  also had a  favorable  impact on gross
profit  comparisons,  with LIFO increasing gross profit by $1.4 million (0.3% of
net sales) in the first nine months of 1997 compared to a gross profit reduction
of $1.7 million (0.5%of net sales) in the comparable  period of fiscal 1996. The
primary  cause of the  favorable  LIFO impact in fiscal 1997 is the reduction of
certain manufactured  inventory quantities which were valued at costs prevailing
in prior years.  Inefficiencies in domestic manufacturing operations reduced the
gross profit  percentage  by 0.4  percentage  points in the first nine months of
1997. In February 1997, the Company  announced the closure of its two children's
footwear  manufacturing  facilities in Missouri.  Existing reserves and accruals
are  expected  to be  sufficient  to offset  the  employee  severance  and other
nonrecurring  costs  resulting  from this decision.  The facilities  were closed
during the third  quarter of fiscal  1997  following  the  transfer of styles to
lower  cost  resources  in the Far  East  and  Mexico.  Finally,  the  decreased
contribution to consolidated  sales of the Retail division,  the division of the
Company with the highest gross profit percentage,  also negatively  impacted the
Company's  consolidated  gross  profit  performance  in the first nine months of
1997,  as retail sales  accounted  for 15.2% of total sales in 1997  compared to
18.1% of sales in the first nine months of 1996.

Operating Costs

     Selling and administrative expenses in the first nine months of fiscal 1997
increased  $5.9 million or 5.1% above the similar  period in 1996.  This rate of
increase compares  favorably to the overall gain in net sales of 14%.  Operating
costs as a percentage of net sales  decreased  from last year by 2.5  percentage
points in the first nine months (29.2% in 1997  compared to 31.7% in 1996).  The
operating cost  comparison  between the 1997 and 1996 third quarter  periods was
also favorable as expenses  increased by only 3.9% compared to the sales gain of
16.9% and the  relationship  of expenses to net sales declined by 3.6 percentage
points.  Expenses in the third quarter and nine-month  period of 1996 included a
provision  of $3.8  million  related  to the  impairment  in  value  of  certain
software-related expenses which were capitalized in prior years.

     Higher advertising spending,  which increased by $3.6 million or 18% in the
first nine months of 1997,  accounted for the largest portion of the increase in
operating expenses.  The additional  advertising costs were primarily related to
the launch of the Tommy Hilfiger(R)  product line and a shift in spending to the
first nine months of the year at Stride Rite  Children's  Group. As a percentage
of net sales, advertising expense

                                      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:

represented  5.7% of sales in the first nine months of 1997,  which was slightly
higher than the spending rate of 5.5% of sales in the comparable period in 1996.
Distribution  expenses  increased 12.6% during the first nine months of 1997 due
to the  increased  sales  volume of the  wholesale  business  units and start-up
expenses of $1.4 million related to a new  distribution  facility in Huntington,
Indiana.  The Company  expects to begin shipping Stride Rite brand products from
the new  Indiana  facility  during  the  fourth  quarter  of 1997.  Distribution
expenses,  including the start-up  costs,  represented  2.6% of net sales in the
first nine months of 1997  compared to 2.7% for the same period in 1996.  Retail
store  expenses  decreased  4.9% during the first nine months of 1997 due to the
closing of underperforming locations over the past year.

Other Income and Taxes

     Other  income  (expense)  increased  pre-tax  income by $1.1 million in the
first nine months of fiscal 1997  compared  to a small  favorable  impact in the
first nine months of fiscal 1996. Interest income increased $0.6 million in 1997
due to higher levels of short-term  investments  during the first nine months of
1997 than in the  comparable  1996  period.  Interest  expense in the nine month
period of 1997 was lower than 1996,  decreasing  $0.5  million,  as the  Company
maintained lower borrowings due to reduced inventory levels.  Average short-term
borrowings  in  the  first  nine  months  of  1997  were  $1.7   million,   down
significantly  from the average  borrowings of $12.2  million in the  comparable
period of 1996.

     The  provision  for income taxes  increased  $8.5 million in the first nine
months of fiscal 1997 as compared to the similar period in fiscal 1996 primarily
due to the higher pre-tax  income earned in the 1997 period.  The 1997 effective
income tax rate was also higher,  36.2%  compared to 25% in 1996, due to reduced
tax savings related to a company-owned life insurance program.

Net Income

     Net  income  for the  first  nine  months of fiscal  1997  increased  $11.8
million,  up 155.6% from the income earned in the 1996 nine-month  period.  With
the improved  gross  profit  performance  and an increase in operating  expenses
which was well below the rate of sales growth, the Company's after-tax return on
net sales in the first nine months  improved by 2.5  percentage  points (4.6% of
sales in the first nine months of 1997 compared to 2.1% in the 1996 period).


                                      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

     At August 29, 1997, the Company's balance sheet reflects a current ratio of
2.8 to 1 with no long-term  debt. The Company's cash and short-term  investments
totaled  $52.1  million  at the end of the  latest  quarter,  below the cash and
investments  total of $71.1 million at the end of the first nine months of 1996.
In  1997,   other  assets  also   included  $9.6  million  of   investments   in
intermediate-term,  fixed income  instruments  compared to $6 million of similar
investments  at August  30,  1996.  During the first  nine  months of 1997,  the
Company's  operations  used $3.5 million of cash, down from the $34.2 million of
cash flow provided from  operations  in 1996 as additional  working  capital was
required in the first nine months of 1997 to support the increased sales levels.

      At August  29,  1997,  receivable  and  inventory  levels  totaled  $201.9
million,  an increase of $29.6  million or 17.2% from the $172.3  million  asset
amount at the end of the first nine months of 1996. Accounts receivable of $85.9
million at the end of the third quarter of 1997 was 14.5% above from  comparable
1996  amount,  a rate of growth  below the 20.7%  increase  in  revenues  of the
Company's  wholesale  businesses  during the third quarter of 1997.  Inventories
were  higher at the end of the first nine  months of 1997,  up $18.7  million or
19.2% from the 1996  level with  substantially  all of the  increase  related to
inventory associated with the Tommy Hilfiger(R) business.

      The Company's  Board of Directors had  previously  authorized a 16 million
share stock repurchase  program.  The Company completed this repurchase  program
during the third quarter of 1997. In the first nine months of 1997,  the Company
repurchased  2,042,500  shares of common stock for an aggregate  expenditure  of
$25.6 million in cash. These transactions bring the aggregate expenditure amount
for the 16 million share repurchase program to $145.6 million.

      The Company  uses bank lines of credit to fund  seasonal  working  capital
needs.  Borrowings  outstanding  under  these  arrangements  at August 29,  1997
amounted to $9.7 million. No borrowings were outstanding at August 30, 1996.





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Part II - OTHER INFORMATION

                           THE STRIDE RITE CORPORATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits                   Description of Exhibit
               Exhibit No.
                   11              Computation of Per Share Earnings
                   27              Financial Data Schedule

(b)     Reports on Form 8-K

        On July 1, 1997,  the Company filed a report on Form 8-K  describing the
        adoption of a replacement shareholder rights plan, under which preferred
        share purchase rights were distributed to stockholders of record on July
        17,  1997.  This  shareholder   rights  plan  replaced  a  similar  plan
        instituted  by the  Company's  Board  of  Directors  in July  1987.  For
        additional  information,  reference is made to the Form 8-K and Form 8-A
        filed on July 1, 1997, including the exhibits thereto.






























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                           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:  October 10, 1997             By:   /s/ John M. Kelliher
                                          --------------------
                                          John M. Kelliher
                                          Vice President, Finance,
                                          Treasurer, and Corporate Controller


































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                           THE STRIDE RITE CORPORATION


                                INDEX TO EXHIBITS



Exhibit No.

                                                         Sequential Page No.
     11       Computation of Per Share Earnings             Page 16 of 17

     27       Financial Data Schedule                        Page 17 of 17



































                                     15




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