1 of 19 pages
                                                                Exhibit Index
                                                           Appears on Page 15

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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 August 31, 2001

( )   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 October 10, 2001, 41,857,230 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

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

<CAPTION>
                                  August 31,                      September 1,
                                     2001          December 1,        2000
                                  (Unaudited)         2000         (Unaudited)
                                 --------------   --------------  --------------

  Assets

  Current Assets:
<S>                                   <C>              <C>             <C>
     Cash and cash equivalents        $ 17,443         $ 62,976        $ 42,762

     Accounts and notes
      receivable, net                   83,909           54,375          82,578

     Inventories                       107,607          105,917          78,766

     Deferred income taxes              25,808           25,494          26,489

     Other assets                        3,169            6,365           4,587
                                      --------         --------        --------

     Total current assets              237,936          255,127         235,182

  Property and equipment, net           73,686           76,240          75,326

  Other assets                          21,365           21,106          21,260
                                      --------         --------        --------

     Total assets                     $332,987         $352,473        $331,768
                                      ========         ========        ========


</TABLE>















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




                                        2


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

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

<CAPTION>
                                  August 31,                      September 1,
                                     2001         December 1,         2000
                                  (Unaudited)         2000        (Unaudited)
                                 --------------   -------------  ---------------

  Liabilities and Stockholders' Equity

  Current Liabilities:
     Short-term debt                       -        $ 24,000              -
<S>                                 <C>               <C>          <C>
     Accounts payable               $ 18,815          32,570       $ 20,716
     Income taxes payable             19,592          18,716         23,828
     Accrued expenses and other
       liabilities                    18,666          21,666         25,552
                                    --------        --------       --------
     Total current liabilities        57,073          96,952         70,096

  Deferred income taxes                5,236           5,929          5,109


  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                          19,002          20,276          20,275

    Retained earnings                390,576         371,821         374,558

     Less cost of 15,002,590
        shares of common stock
        held in treasury
        (15,355,693 on December
        1, 2000 and 14,512,359
        on September 1, 2000)       (153,137)       (156,742)       (152,507)
                                    --------        --------        --------
     Total stockholders' equity      270,678         249,592         256,563
                                    --------        --------        --------

     Total liabilities and          $332,987        $352,473        $331,768
                                    ========        ========        ========
       stockholders' equity
</TABLE>

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



                                        3


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

<TABLE>
                                THE STRIDE RITE CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                For the periods ended August 31, 2001 and September 1, 2000
                      (In Thousands Except Per Share Data)

<CAPTION>
                          Three Months Ended             Nine Months Ended
                     -----------------------------  ----------------------------
                      August 31,    September 1,     August 31,    September 1,
                         2001           2000            2001           2000
                     -------------  --------------   -----------   -------------

<S>                  <C>            <C>              <C>           <C>
Net sales            $135,368       $144,760         $440,121      $452,956

Cost of sales          87,164         92,700          278,193       288,135

Selling and
 administrative
 expenses              39,038         40,242          125,317       124,361


Operating income        9,166         11,818           36,611        40,460

Other income
  (expense):
  Interest income         494          1,244            2,462         2,888
  Interest expense       (353)          (394)          (1,428)       (1,548)
  Other, net              (86)           (38)            (639)          (48)
                     --------       --------        ---------      --------
                           55            812              395         1,292
                     --------       --------        ---------      --------
Income before
  income taxes          9,221         12,630           37,006        41,752

Provision for
  income taxes          2,068          4,848           11,986        15,874
                     --------       --------        ---------      --------

Net income           $  7,153       $  7,782        $  25,020      $ 25,878
                     ========       ========        =========      ========

Net income per common share:
  Diluted            $    .17       $    .18        $     .59      $    .59
                     ========       ========        =========      ========
  Basic              $    .17       $    .18        $     .60      $    .60
                     ========       ========        =========      ========
Dividends per
common share         $    .05       $    .05        $     .15      $    .15
                     ========       ========        =========      ========

Average common
  shares used in
  per share
  computations:
  Diluted              42,372         43,167           42,126        43,582
                     ========       ========        =========      ========
  Basic                41,817         43,004           41,718        43,402
                     ========       ========        =========      ========

</TABLE>




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

                                        4


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

<TABLE>
                            THE STRIDE RITE CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                 For the nine months ended August 31, 2001 and
                    September 2, 2000 (Dollars in Thousands)

<CAPTION>
                                                    August 31,     September 1,
                                                       2001            2000
                                                   --------------  ------------
Cash was provided from (used for)
Operations:
<S>                                                  <C>             <C>
   Net income                                        $ 25,020        $ 25,878
   Adjustments to reconcile to net cash provided
      from (used for) operations:
   Depreciation and amortization                       10,777           9,067
   Deferred income taxes, net                          (1,007)           (296)
   Compensation expense related to executive
      stock plans                                         170             171
   Gain related to long-term investments                 (451)              -
   Loss on disposal of property and
      equipment                                            83             593
   Changes in:
      Accounts and notes receivable                   (29,534)        (35,100)
      Inventories                                      (1,690)         42,401
      Other current assets                              3,196             308
      Accounts payable, income taxes, accrued
       expenses and other current liabilities         (15,693)        (20,391)
                                                     ---------       --------
      Net cash provided from(used for)operations       (9,129)         22,631
                                                     ---------       --------
Investments:
   Additions to property and equipment                 (8,118)        (17,362)
   Distribution from long-term investments                451               -
   Sales(purchases)of marketable securities, net          (61)              7
   Decrease (increase) in other assets                   (407)            273
                                                     ---------       --------
      Net cash used for investments                    (8,135)        (17,082)
                                                     ---------       --------
Financing:
   Short-term debt repayments                         (24,000)              -
   Proceeds from sale of stock under stock plans        1,979             389
   Cash dividends paid                                 (6,248)         (6,581)
   Repurchase of common stock                               -         (13,781)
                                                     --------        --------
      Net cash used for financing                     (28,269)        (19,973)
                                                     ---------       --------


Net decrease in cash and cash equivalents             (45,533)        (14,424)

Cash and cash equivalents at beginning of the
period                                                 62,976          57,186
                                                     --------        --------

Cash and cash equivalents at end of the period       $ 17,443        $ 42,762
                                                     ========        ========
</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 31, 2001 and September,
1,  2000 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 August 31, 2001 and September 1, 2000 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  statements,  but does not include all disclosures required by
generally accepted accounting principles. The Company filed audited consolidated
financial  statements  for the year  ended  December  1, 2000 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 contingent  assets and  liabilities  at the dates of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
respective 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 October 4, 2001 the Company announced a plan to restructure  operations.
Accordingly,  in the fourth  quarter of fiscal  2001 the  Company  will record a
nonrecurring  charge in connection  with the Company's  realignment of corporate
and divisional operations.  The total amount of the charge of approximately $2.5
million,  (amounting to $1.5 million after taxes or $.04 per share), is composed
of $1.7 million  related to employee  termination  payments  and other  employee
related costs, $0.5 million of costs associated with the closing of one facility
and $0.3 million of other costs. As a result of the restructuring  approximately
120 positions were eliminated from the Company's administrative staff.









                                                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):

<TABLE>
<CAPTION>
                                         Three Months Ended   Nine Months Ended
                                         ------------------   -----------------
                                        Aug. 31,   Sept. 1,  Aug. 31,  Sept. 1,
                                          2001       2000      2001      2000
                                          ----       ----      ----      ----
Net income applicable to common
<S>                                     <C>       <C>        <C>       <C>
shares                                  $  7,153  $  7,782   $ 25,020  $ 25,878

Calculation of shares:
   Weighted average number of common
     shares outstanding(basic)            41,817    43,004     41,718    43,402

   Common shares attributable
      to assumed exercise of dilutive
      stock options and stock
      purchase rights using the
      treasury stock method                  555       163        408       180
                                        --------  --------   --------  --------

Average common shares and common
   equivalents outstanding during
   the period (diluted)                   42,372    43,167     42,126    43,582
                                        ========  ========   ========  ========

Net income per common share (basic)     $    .17  $    .18   $    .60  $    .60
                                        ========  ========   ========  ========

Net income per common share(diluted)    $    .17  $    .18   $    .59  $    .59
                                        ========  ========   ========  ========
</TABLE>


     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:

<TABLE>
<CAPTION>
                                      Third Quarter       First Nine Months
                                  ---------------------------------------------
                                     2001       2000       2001        2000
                                  ---------  ---------  ----------  -----------
 Options to purchase shares of
<S>                                     <C>       <C>       <C>          <C>
    common stock (in thousands)         996       3,378     1,745        3,273

</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

     This form 10-Q contains  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange Act of 1934. We caution investors that any  forward-looking  statements
presented in this report and presented elsewhere by management from time to time
are based on  management's  beliefs  and  assumptions  made by, and  information
currently   available  to,  management.   When  used,  the  words  "anticipate",
"estimate",  "project",  "should", "expect" and similar expressions are intended
to identify  forward-looking  statements.  Such statements are subject to risks,
uncertainties  and  assumptions  and are not  guarantees of future  performance,
which may be affected by various trends and factors that are beyond our control.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially from
those anticipated,  estimated or projected. Accordingly, past results and trends
should not be used by investors to anticipate future results or trends.  Some of
the key factors that may have a direct  bearing on our results are  presented in
the  Company's  Form 10-K for the fiscal  year ended  December 1, 2000 which was
filed with the Securities and Exchange Commission.

Results of Operations

     The following  table  summarizes  the Company's  performance  for the third
quarter  and first nine months of fiscal 2001 as compared to the results for the
same periods in fiscal 2000:

<TABLE>
<CAPTION>
Increase (Decrease) Percent vs. 2000 results:
                                            Third Quarter      Nine Months

<S>                                             <C>               <C>
Net sales                                       (6.5)%            (2.8)%
Gross profit                                    (7.4)%            (1.8)%
Selling and administrative expenses             (3.0)%             0.8 %
Operating income                               (22.4)%            (9.5)%
Income before income taxes                     (27.0)%           (11.4)%
Net income                                      (8.1)%            (3.3)%
</TABLE>



<TABLE>
Operating Ratios as a Percent to Net Sales:
<CAPTION>
                                         Third Quarter       Nine Months
                                       --------------------------------------
                                         2001     2000      2001      2000
                                       -------- --------  --------- ---------

<S>                                      <C>       <C>      <C>       <C>
Gross profit                             35.6%     36.0%    36.8%     36.4%
Selling and administrative expenses      28.8%     27.8%    28.5%     27.5%
Operating income                          6.8%      8.2%     8.3%      8.9%
Income before income taxes                6.8%      8.7%     8.4%      9.2%
Net income                                5.3%      5.4%     5.7%      5.7%
</TABLE>



                                        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 third  quarter of fiscal 2001  decreased  $9.4  million or
6.5% below the net sales  level for the same  period of fiscal  2000.  The major
reason for the  decline  was the weak retail  environment,  particularly  in the
department store sector, which resulted in a shortfall in reorders, an important
component of third quarter sales. In the third quarter of 2001,  wholesale brand
revenues decreased 11%, while retail sales of Company-owned stores increased 10%
from the same period in 2000.  Over the first nine months of 2001,  consolidated
net sales  decreased by $12.8  million,  2.8% below the sales for the comparable
period of 2000.  Revenues related to the Company's  wholesale brands declined 6%
during the first nine months of 2001,  while retail sales  increased  13%.  Unit
shipments of current line  merchandise for the wholesale brands during the first
nine months of 2001 were 4.0% below the comparable period in 2000. The Company's
average  selling  price  was  also  lower  in the  first  nine  months  of 2001,
decreasing 3% from last year.  Sales of  discontinued  products  decreased  $1.6
million in the first nine months of 2001 as compared to the same period in 2000.

     Sales of Stride Rite Children's  Group increased 3% in the third quarter of
fiscal  2001,  the result of a 10% increase in retail sales and a 3% decrease in
sales to independent  accounts,  as compared to the same period in 2000.  During
the third  quarter of 2001,  sales at  comparable,  company-owned  retail stores
increased 1.1% from 2000. For the first nine months of 2001, sales of the Stride
Rite Children's Group increased 8% from the same period in 2000, with the retail
revenues  increasing  13% and the  wholesale  portion of the brand  showing a 2%
sales gain. Sales of the Stride Rite brand in the first nine months of 2001 were
helped  by the  introduction  of the  Munchkin(R)  product  line in the mid tier
retail channel.  During the third quarter,  the Children's  Group began shipping
Toddler  Tech(TM) the next stage of footwear  incorporating  the Natural  Motion
System(TM).  At the end of the  third  quarter  of 2001,  the  Children's  Group
operated 212 stores, compared to 199 stores open at the end of the third quarter
in 2000.  The  Company  opened  21 new  stores  and  closed  10  underperforming
locations in the first nine months of 2001.

     In the third quarter of fiscal 2001, sales of the Keds brand were 15% lower
than the comparable period of 2000. For the first nine months of 2001, Keds' net
sales decreased 9% as compared to 2000, with the sales of women's and children's
products  decreasing  13% and 20%,  respectively,  from the first nine months of
2000.  These  decreases were partially  offset by higher sales of  Grasshopper's
products  which were 47% above the level  achieved  in the first nine  months of
2000.  The  third  quarter  sales  decrease  in the  women's  product  line  was
principally  the  result  of  lower  initial   shipments  on  new  Fall  product
introductions.  The sales decline in the children's products is primarily due to
weak  performance of Fall seasonal  items. At the end of the third quarter three
Keds retail stores had been opened and two additional locations are scheduled to
open during the fourth quarter of fiscal 2001.


                                        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  footwear  products in the third quarter of fiscal
2001  decreased  16% as compared to the same period in 2000.  For the first nine
months of fiscal 2001, sales of Tommy Hilfiger footwear decreased 5% as compared
to the same period in 2000. The overall  weakness in the department store sector
had a  significant  negative  impact  on the  sales of Tommy  Hilfiger  footwear
products.  The decrease in sales for the nine month period affected all segments
of the Tommy Hilfiger business.

     Sales of the Sperry brand  decreased 8% in the third quarter of fiscal 2001
to bring  sales of the brand for the first nine months of this year to 12% below
the comparable period in 2000. With the exception of increases in sales of men's
and women's boat shoes, all other categories  reported  declines in sales during
the third  quarter.  International  revenues  in the third  quarter of 2001 were
above the  comparable  period of 2000 by 3%. For the first nine  months of 2001,
International revenues were flat to the comparable period of 2000.

Gross Profit

     During the first nine months of fiscal 2001,  gross profit  decreased  $2.9
million or 1.8% below the same period in 2000. This decrease compares to the net
sales  decrease  of 2.8% for the same  period.  The  consolidated  gross  profit
percent in the first nine months of fiscal 2001 increased 0.4 percentage points,
finishing at 36.8% in 2001 compared to 36.4% in 2000.  Gross profit  performance
in the third quarter of 2001 deteriorated over the same period in 2000, 35.6% in
2001 compared to 36.0% in the 2000 third  quarter.  The  Company's  gross profit
performance  for the quarter and the nine month period  benefited from the sales
increases  in  company-owned  retail  stores  which have a higher  gross  profit
percentage.  The 2001 third  quarter  gross  profit was  negatively  impacted by
higher  obsolescence  charges  as  these  costs  reduced  gross  profit  by  5.9
percentage  points compared to a reduction of 3.6 percentage  points in the 2000
third  quarter.  The Company's  LIFO provision had little impact on gross profit
comparisons for the first nine months of 2001, with LIFO decreasing gross profit
by $1.1  million  (0.3% of net sales) in 2001  compared  to a  decrease  of $1.4
million (0.3% of net sales) in 2000.

Operating Costs

     Selling and administrative expenses in the first nine months of fiscal 2001
increased $1 million or 0.8% from the spending level in the first nine months of
fiscal 2000.  Operating  costs as a percentage of sales in the first nine months
of 2001  increased 1.0  percentage  point from the same period in 2000 (28.5% in
2001 compared to 27.5% in 2000).






                                       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)

     Higher  retail  store  expenses,  primarily  related to the start-up of new
stores, increased overall operating expenses by 0.8 percentage points during the
first nine months of 2000.  Advertising expense represented 5.1% of net sales in
the first nine  months of 2001,  which was below the  spending  rate of 5.7% for
2000.  Advertising  costs in the first nine months of fiscal 2001 decreased $3.4
million or 13%, with most of the cost decrease occurring in the third quarter of
the year.  This  advertising  cost decrease is largely due to reductions in Keds
and Tommy Hilfiger spending in the third quarter.

Other Income and Taxes

     Other  income  (expense)  increased  pre-tax  income by $0.4 million in the
first nine months of fiscal 2001  compared to an increase of $1.3 million in the
similar  period of 2000.  Interest  income for the first nine  months f 2001 was
$2.5  million,  down from the $2.9  million  for the first nine  months of 2000.
Interest  expense in the first nine  months of 2001  decreased  slightly to $1.4
million compared to $1.5 million in 2000.  Higher average  borrowing levels were
offset by a significant decrease in the Company's average interest rate, 5.8% in
the first  nine  months of 2001  compared  to 7.5% in 2000.  Average  short-term
borrowings  in the first nine  months of 2000 were $27.6  million,  5% above the
average borrowings of $26.3 million in the comparable period of 2000.

     The  provision  for income taxes  decreased  $3.9 million in the first nine
months of fiscal 2001 as compared to the similar  period in 2000. The income tax
decrease was due to the lower  pre-tax  income earned in the period as well as a
reduction  in the  effective  tax rate for the nine month  period,  32.4% versus
38.0%, in the prior year. The lower tax rate is based on the year-end  projected
tax  rate  and  reflects  a  reduction  in the need  for  certain  tax  accruals
established in prior periods.

Nonrecurring Charges

     On October 4, 2001 the Company announced a plan to restructure  operations.
Accordingly,  in the fourth  quarter of fiscal  2001,  the Company will record a
$2.5 million nonrecurring charge in connection with the Company's realignment of
corporate and divisional  operations.  The Company expects cash payments will be
made through the third quarter of fiscal 2002.

Net Income

     Net income for the first nine months of fiscal 2001 decreased $0.9 million,
down 3.3% from the income earned in the same period of fiscal 2000.  Lower gross
profit and higher  operating  expenses  were  substantially  offset by the lower
effective  income  tax rate.  The  Company's  return on net sales of 5.7% in the
first nine  months of 2001 was equal to the 5.7% return in the first nine months
of last year.



                                       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)

Liquidity and Capital Resources

     At August 31, 2001, the Company's balance sheet reflects a current ratio of
4.2 to 1 with no long-term debt. The Company's cash and cash equivalents totaled
$17.4 million at the end of the latest quarter,  below the prior year's cash and
cash equivalents  total of $42.8 million.  When combined with  intermediate-term
fixed income  investments,  which are included in other assets,  total available
cash and  investments  amounted to $29.6  million at August 31, 2001 compared to
$54.0  million  in 2000.  The  Company  uses its $75  million  revolving  credit
facility to fund seasonal  working capital needs. No borrowings  under this line
of credit were outstanding as of August 31, 2001 or September 1, 2000.

     During the first nine months of fiscal 2001,  the Company used $9.1 million
of cash for operations.  This negative cash flow amount was significantly  below
the $22.6  million of cash provided  from  operations  during the same period in
fiscal 2000.  At August 31,  2001,  accounts  receivable  and  inventory  levels
totaled  $191.5  million,  an increase of $30.2  million or 19% above the $161.3
million  asset  amount  at the  end of  the  third  quarter  of  2000.  Accounts
receivable at the end of the third quarter of 2001  increased $1.3 million or up
1.6%  compared to the prior year,  contrary to the wholesale  businesses'  sales
decrease of 11% in the third quarter of 2001. Inventories were higher at the end
of the third quarter of 2001, up $28.8 million or 36.6% from the 2000 level, due
to higher inventory levels at the Children's Group and Keds divisions.

     Additions to property and equipment  totaled $8.1 million in the first nine
months of fiscal 2001  compared  to $17.4  million for the same period in fiscal
2000.  The lower  capital  expenditures  were the result of reduced  spending on
information  technology in fiscal 2001 and not incurring  building costs related
to the expansion of the Company's  Huntington,  Indiana distribution facility in
fiscal  2000.  During  the  first  nine  months  of 2001,  the  Company  did not
repurchase  any shares of its common stock.  At August 31, 2001, the Company has
2.1 million  shares  remaining on the repurchase  authorization  approved by the
Board of Directors in December 1999. The Company did repurchase 90,000 shares of
its common stock in mid-September.
















                                       12


<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
                10(i)                Amended and Restated License
                                     Agreement between Registrant and
                                     Tommy Hilfiger Licensing, Inc.

         (b)    Reports on Form 8-K

                There were no reports filed on Form 8-K during the most recent
                quarterly period.













































                                       13


<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:  October 11, 2001             By:  /S/ Frank A. Caruso
                                    --------------------------
                                      Frank A. Caruso
                                      Chief Financial Officer









































                                       14

<PAGE>



                          THE STRIDE RITE CORPORATION

                               INDEX TO EXHIBITS




    Exhibit                                            Sequential Page No.
       No.     Description of Exhibit

     10(i)     Amended and Restated License Agreement           16
               between Registrant and Tommy Hilfiger
               Licensing, Inc.











































                                       15