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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q
(Mark One)

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

                   For the quarterly period ended May 28,2004

( )   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      .10
                                                ----    ----
                         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 ( )

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2).

          Yes(X)          No ( )

As of June 30, 2004, 37,726,486 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
<TABLE>
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<CAPTION>
                                     May 28,                           May 30,
                                       2004         November 28,        2003
                                   (Unaudited)          2003        (Unaudited)
                                  ---------------   --------------  ------------
                                                  (In thousands)
  Assets

  Current Assets:
     Cash and cash
<S>                                    <C>             <C>              <C>
      equivalents                      $79,574         $103,272         $81,463

     Accounts and notes
      receivable, net                   79,278           51,058          70,151

     Inventories                        80,749           81,925          76,654

     Deferred income taxes              15,178           14,393          20,588

     Other current assets               10,734           19,452           5,215
                                      --------         --------         -------

     Total current assets              265,513          270,100         254,071

  Property and equipment, net           57,793           60,802          64,092

  Other assets                          13,193           14,315          15,350
                                      --------         --------        --------

     Total assets                     $336,499         $345,217        $333,513
                                      ========         ========        ========

</TABLE>
















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


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

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

<CAPTION>
                                    May 28,                           May 30,
                                      2004        November 28,         2003
                                  (Unaudited)         2003          (Unaudited)
                                 ---------------  --------------   -------------
                                     (In thousands, except for share data)
  Liabilities and Stockholders' Equity

  Current Liabilities:
<S>                                  <C>              <C>              <C>
     Accounts payable                $20,529          $23,887          $12,006
     Income taxes payable             17,111           16,815           20,196
     Accrued expenses and other
       liabilities                    20,816           23,273           19,936
                                     -------         --------          -------
     Total current liabilities        58,456           63,975           52,138

  Deferred income taxes                  844              381              531
  Pension obligation                  13,145           13,145           11,677

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

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

     Capital in excess of par
       value                          15,371           16,825           17,408

    Retained earnings                431,519          415,988          414,471
    Accumulated other
        comprehensive loss            (7,927)          (7,798)          (6,770)
     Less cost of 19,223,032
        shares of common stock
        held in treasury
        (17,607,304 on November
        28, 2003 and 17,527,919
        on May 30, 2003)            (189,146)        (171,536)        (170,179)
                                    ---------        ---------        ---------
     Total stockholders' equity      264,054          267,716          269,167
                                    ---------        ---------        ---------

     Total liabilities and
       stockholders' equity         $336,499         $345,217         $333,513
                                    ========         ========         ========
</TABLE>



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


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION
<TABLE>
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
              For the six months ended May 28, 2004 and May 30, 2003

                               Three Months Ended           Six Months Ended
                               ------------------           ----------------
                                  (In thousands, except for per share data)
<CAPTION>
                              May 28,       May 30,       May 28,       May 30,
                               2004          2003          2004          2003
                            ------------  ------------  ------------  ----------


<S>                          <C>           <C>           <C>           <C>
Net sales                    $165,009      $154,286      $301,143      $306,608

Cost of sales                 101,507        93,308       184,628       187,589
                             --------      --------      --------      --------


Gross profit                   63,502        60,978       116,515       119,019

Selling and
    administrative
    expenses                   44,589        44,002        85,929        88,378
                             --------      --------      --------      ---------

Operating income               18,913        16,976        30,586        30,641

Investment income                 473           923         1,044         l,606
Interest expense                  (82)         (102)         (156)         (172)
Other expense, net                (70)           (1)         (148)         (164)
                             ---------     ---------     ---------     ---------
                                  321           820           740         1,270
                             ---------     ---------     ---------     ---------

Income before income
   taxes                       19,234        17,796        31,326        31,911

Provision for income
   taxes                        7,334         6,577        11,942        11,871
                             ---------     ---------     ---------     ---------

Net income                   $ 11,900      $ 11,219      $ 19,384      $ 20,040
                             =========     =========     =========     =========

Net income per common share:
   Diluted                   $    .30     $     .28      $    .49     $     .50
                             =========    ==========     =========    ==========
   Basic                     $    .31     $     .29      $    .50     $     .51
                             =========    ==========     =========    ==========

Dividends per common
   share                     $    .05     $     .05      $    .10     $     .10
                             =========    ==========     =========    ==========

Average common shares
  used in per share
  computations:
   Diluted                     39,450        39,895        39,887        39,866
                             =========    ==========     =========    ==========
   Basic                       38,637        39,362        39,029        39,394
                             =========    ==========     =========    ==========
</TABLE>





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

PART I - FINANCIAL INFORMATION (Continued)

                                THE STRIDE RITE CORPORATION
<TABLE>
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                   For the six months ended May 28, 2004 and May 30, 2003

<CAPTION>
                                                      2004             2003
                                                  --------------   -------------
Cash flows from operating activities:                      (In thousands)
<S>                                                   <C>               <C>
   Net income                                         $19,384           $20,040
   Adjustments to reconcile net income to net
      cash used for operations:
   Depreciation and amortization                        6,495             7,622
   Deferred income taxes                                 (322)                -
   Gain related to long-term investments                    -            (1,071)
   Loss on disposals of property and equipment            226                69
   Changes in:
      Accounts and notes receivable                   (28,220)          (22,076)
      Inventories                                       1,176            21,559
      Other current assets                              9,718             8,398
      Other current liabilities                        (5,531)          (16,838)
      Other long-term assets                            1,122            (2,436)
   Contribution to pension plan                        (1,000)                -
                                                       ------           -------
      Net cash provided from operating activities       3,048            15,267
                                                       ------           -------

Cash flows from investing activities:
   Additions to property and equipment                 (3,712)           (3,492)
   Distributions from long-term investments                 -             1,071
                                                      -------           -------
      Net cash used in investing activities            (3,712)           (2,421)
                                                      --------          -------

Cash flows from financing activities:
   Proceeds from sale of stock under stock plans        3,368             1,146
   Cash dividends paid                                 (3,947)           (3,943)
   Repurchase of common stock                         (22,455)           (1,691)
                                                      --------          -------
      Net cash used in financing activities           (23,034)           (4,488)
                                                      --------          -------

Net increase (decrease) in cash and cash
equivalents                                           (23,698)            8,358

Cash and cash equivalents at beginning of the
period                                                103,272            73,105
                                                      -------           -------

Cash and cash equivalents at end of the period        $79,574           $81,463
                                                      =======           =======
</TABLE>




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



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 -   Summary of Significant Accounting Policies

Basis of Presentation

     The  financial  information  included  in this Form 10-Q of The Stride Rite
Corporation  (the "Company") for the periods ended May 28, 2004 and May 30, 2003
is unaudited,  however, such information includes all adjustments (including all
normal  recurring  adjustments)  which,  in  the  opinion  of  management,   are
considered  necessary for a fair  presentation of the  consolidated  results for
those periods.  The results of operations for the periods ended May 28, 2004 and
May 30, 2003 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 with the Securities and Exchange  Commission audited  consolidated
financial  statements for the year ended  November 28, 2003 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,
sales  returns  allowances,  markdowns  (which reduce  revenues),  inventory and
income taxes;  assumptions  related to the defined  benefit  pension  plan;  and
estimates of future  undiscounted  cash flows on property and equipment that may
be impaired. Actual results could differ from those estimates.




<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock Purchase and Option Plans

     At May 28, 2004, the Company had three stock-based compensation plans which
are  described  more fully in Note 10 to the  Company's  consolidated  financial
statements  for the fiscal year ended  November  28, 2003 as  contained  on Form
10-K. The Company accounts for these plans under the recognition and measurement
principles of APB Opinion No. 25,  "Accounting  for Stock Issued to  Employees",
and related  interpretations.  The  following  table  provides the effect on net
income  and  earnings  per  share if the  Company  had  applied  the  fair-value
recognition provisions of SFAS No. 148, to stock-based compensation.

<TABLE>
                               Three Months Ended           Six Months Ended

<CAPTION>
                              May 28,       May 30,       May 28,      May 30,
                               2004          2003          2004         2003
                            ------------  ------------  ------------ ------------
                                 (In thousands, except for per share data)
<S>                          <C>           <C>           <C>          <C>
Net income, as reported      $11,900       $11,219       $19,384      $20,040

Add:  Stock based employee
compensation expense
included in net income,
net of related tax effects
                                   6             -             6            9

Deduct:  Total stock based
employee compensation
expense determined under
fair value based method
for all awards, net of
related tax effects
                               (434)          (616)         (940)        (931)
                            --------      ---------     ---------    ---------

Pro forma net income        $11,472        $10,603       $18,450      $19,118
                            =======       ========      ========     ========

Earnings per share:
   Basic - as reported      $   .31        $   .29       $   .50      $   .51
                            =======       ========      ========     ========
   Basic - pro forma        $   .30        $   .27       $   .47      $   .49
                            =======       ========      ========     ========

   Diluted - as reported    $   .30        $.   28       $   .49      $   .50
                            =======       ========      ========     ========
   Diluted - pro forma      $   .29        $   .27       $   .46      $   .48
                            =======       ========      ========     ========
</TABLE>


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - Earnings Per Share

     Basic  earnings  per common  share  excludes  dilution  and is  computed by
dividing net income  available to common  stockholders  by the weighted  average
number of common shares outstanding for the period.  Diluted earnings per common
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:

<TABLE>
                                           Three Months           Six Months
                                               Ended                Ended
                                        -------------------   ------------------
<CAPTION>
                                        May 28,    May 30,    May 28,   May 30,
                                          2004      2003       2004       2003
                                        ---------  --------   --------  --------
                                       (In thousands, except for per share data)
<S>                                    <C>       <C>        <C>        <C>
Net income                             $11,900   $11,219    $19,384    $20,040

Calculation of shares:
Weighted average common shares
outstanding (basic)                     38,637    39,362     39,029     39,394

Dilutive effect of stock options           813       533        858        472
                                       -------   -------    -------    -------

Weighted average common shares
  outstanding (diluted)                 39,450    39,895     39,887     39,866
                                       =======   =======    =======    =======

Net income per common share
(basic)                                  $ .31     $ .29      $ .50      $ .51
                                         =====     =====      =====      =====

Net income per common share
(diluted)                                $ .30     $ .28      $ .49      $ .50
                                         =====     =====      =====      =====
</TABLE>


     The  following  options  were not  included in the  computation  of diluted
earnings per share  because the options'  exercise  prices were greater than the
average market price of the common shares:

<TABLE>
                                          Second Quarter     First Six Months
                                        -------------------  ------------------
<CAPTION>
                                           2004       2003      2004      2003
                                        --------  ---------  --------  --------
                                                    (In thousands)
Options to purchase shares of common
<S>                                       <C>          <C>       <C>       <C>
  stock                                   1,079        521       318       550

</TABLE>


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - Comprehensive Income

<TABLE>
Comprehensive income is as follows:

<CAPTION>
                                     Three Months Ended          Six Months
                                                                   Ended
                                    ----------------------  --------------------
                                     May 28,     May 30,     May 28,    May 30,
                                       2004        2003       2004        2003
                                    -----------  ---------  ---------- ---------
                                                   (In thousands)
<S>                                 <C>           <C>       <C>         <C>
Net income                          $11,900       $11,219   $19,384     $20,040

Other comprehensive
income(loss):
Foreign currency translation
adjustments                            (127)          326      (129)        476
                                    --------      --------  --------    --------
Total comprehensive income          $11,773       $11,545   $19,255     $20,516
                                    ========      ========  ========    ========

Components of accumulated other comprehensive loss consist of the following:

                                    May 28,        November 28,        May 30,
                                      2004             2003             2003
                                 ---------------  ----------------  ------------
                                                  (In thousands)
Foreign currency  translation
adjustments                         $ (346)           $ (217)          $ (49)
Minimum pension liability
   adjustments, net of taxes         (7,581)           (7,581)          (6,721)
                                    --------          --------        ---------
Accumulated other
comprehensive loss                 $ (7,927)         $ (7,798)        $ (6,770)
                                   =========         =========        =========
</TABLE>



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - Intangible Assets and Goodwill

     The following table summarizes the Company's intangible assets and goodwill
balances:

<TABLE>
                               Intangible assets not subject to amortization
                               ------------------------------------------------
<CAPTION>
                                                  Trademark
                                  Goodwill         Rights           Total
-------------------------------------------------------------------------------
May 28, 2004                                   (In thousands)
<S>                               <C>             <C>             <C>
  Gross carrying amount           $3,067          $2,980          $6,047
  Accumulated amortization       $(2,159)        $(1,290)        $(3,449)
November 28, 2003
  Gross carrying amount           $3,068          $2,980          $6,048
  Accumulated amortization       $(2,160)        $(1,290)        $(3,450)
May 30, 2003
  Gross carrying amount           $3,073          $2,980          $6,053
  Accumulated amortization       $(2,165)        $(1,290)        $(3,455)
</TABLE>


Note 5 - Benefit Plans

     During the first  quarter of fiscal 2004,  the Company  adopted the interim
disclosure provisions of SFAS No. 132 revised 2003, "Employers' Disclosure about
Pensions and Other Postretirement  Benefits, an Amendment of FASB Statements No.
87, 88 and 106 and a Revision of FASB Statement No. 132." This statement revises
employers'  disclosures  about pension plans and other  post-retirement  benefit
plans.

     The following table  summarizes the components of net periodic benefit cost
for the Company:

<TABLE>
                                     Three Months Ended     Six Months Ended
                                     ---------------------  --------------------
<CAPTION>
                                     May 28,     May 30,    May 28,    May 30,
                                       2004        2003       2004       2003
                                     ----------  ---------  ---------  -------
                                                   (In thousands)
<S>                                  <C>         <C>        <C>        <C>
Service Cost                         $  413      $  303     $  851     $  606
Interest Cost                           876         763      1,806      1,526
Expected return on assets              (997)       (704)    (1,995)    (1,408)
Net loss recognized                     353         322        728        644
Amortization of prior services cost
                                          5           6         10         12
                                     ----------  ---------  ---------  -------
Net periodic benefit cost            $  650      $  690     $1,400     $1,380
                                     ==========  =========  =========  =======
</TABLE>

     During the first  quarter of fiscal  2004,  the  Company  contributed  $1.0
million to its defined benefit pension plan. The Company does not intend to make
any further contributions to its defined benefit pension plan during fiscal year
2004. No contributions  were made to the Company's  defined benefit plans during
the first two quarters of fiscal 2003.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - Contingencies

     The sale of Tommy Hilfiger branded footwear is a significant portion of our
business.  The Tommy  Hilfiger  footwear  sales are  contingent on our licensing
agreement with Tommy Hilfiger Licensing,  Inc. During fiscal 2003, we negotiated
the renewal of the agreement  for an additional  term. In early January 2004, we
finalized the terms of the license  agreement,  which will expire in March 2007.
We expect to meet our obligations under the Tommy Hilfiger license agreement and
accordingly,  we believe  that no  provision  is  currently  required  for costs
related to the  potential  loss of this license.  If we lose the Tommy  Hilfiger
license, our business would be materially and adversely affected.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

Overview
--------

     The following discusses The Stride Rite Corporation's results of operations
and liquidity and capital resources. The discussion,  including known trends and
uncertainties  identified by management,  should be read in conjunction with the
condensed consolidated financial statements and related notes.

     This Form 10-Q contains  forward-looking  statements  within the meaning of
the  Private  Securities  Litigation  Reform Act of 1995 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",   "believe",   "expect",   "intend",  "may",  "plan",  "estimate",
"project",  "should",  "will be" and  similar  expressions  which do not  relate
solely  to   historical   matters  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 known and
unknown risks,  trends,  uncertainties  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.   We  expressly   disclaim  any
responsibility to update forward-looking statements.  Accordingly,  past results
and trends  should not be used by  investors  to  anticipate  future  results or
trends.

     Risks and  uncertainties  that may affect future  performance  are detailed
from time to time in reports filed by the Company with the SEC,  including Forms
10-Q and 10-K, and include, among others, the following: international, national
and local  general  economic and market  conditions;  the size and growth of the
overall footwear and general retail market; intense competition among designers,
marketers, distributors and sellers of footwear; demographic changes; changes in
consumer  fashion  trends  that may  shift to  footwear  styling  not  currently
included in our product lines;  popularity of particular  designs and categories
of  products;  seasonal  and  geographic  demand  for  the  Company's  products;
difficulties  in anticipating  or forecasting  changes in consumer  preferences;
delays in the opening of new stores; difficulties in implementing, operating and
maintaining the Company's complex information  systems and controls,  including,
without limitation,  the systems related to the Company's retail stores, systems
related to demand and supply planning,  and inventory control;  interruptions in
data and  communications  systems;  fluctuations  and  difficulty in forecasting
operating results; the ability of the Company to sustain, manage or forecast its
growth and inventories;  the size,  timing and mix of purchases of the Company's
products; the underperformance or delay of new products; the possible failure to
retain the Tommy Hilfiger  footwear  license;  the ability to secure and protect
trademarks, patents and other intellectual property; performance and reliability
of  products;  customer  service;  adverse  publicity;  the loss of  significant
suppliers or customers, such as department stores and specialty retailers, the


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

consolidation  or restructuring  of such customers, including  large  chain  and
department stores, which may result in unexpected store closings;  dependence on
China manufacturing;  the ability to secure raw materials;  delays and increased
costs of freight and  transportation to meet delivery  deadlines;  the impact on
product  development or  manufacturing  as a result of health risks;  changes in
business  strategy or development  plans;  general risks  associated  with doing
business  outside  the United  States,  including,  without  limitation,  import
duties, tariffs,  quotas and political and economic instability;  acts of war or
terrorism;  labor  disputes;  changes in government  regulations;  liability and
other claims  asserted  against the  Company;  the ability to attract and retain
qualified  personnel;  and other factors referenced or incorporated by reference
in this report and other reports.

     The risks included here are not  exhaustive.  Other sections of this report
may include  additional  factors  which  could  adversely  affect the  Company's
business and financial  performance.  Moreover,  the Company  operates in a very
competitive and rapidly changing environment.  New risk factors emerge from time
to time and it is not possible for  management to predict all such risk factors,
nor can it assess the impact of all such risk factors on the Company's  business
or the extent to which any factor,  or combination of factors,  may cause actual
results  to  differ  materially  from  those  contained  in any  forward-looking
statements.  Given these  risks and  uncertainties,  investors  should not place
undue reliance on forward-looking statements as a prediction of actual results.

     Investors should also be aware that while the Company does communicate with
securities  analysts  from time to time, it is against our policy to disclose to
them any material  non-public  information  or other  confidential  information.
Accordingly,  investors  should not assume that we agree with any  statement  or
report  issued by any analyst  irrespective  of the content of the  statement or
report.  Furthermore,  the Company has a policy  against  issuing or  confirming
financial  forecasts or projections issued by others.  Therefore,  to the extent
that reports issued by securities analysts contain any projections, forecasts or
opinions, such reports are not the responsibility of the Company.

     The Company  discussed a number of significant  trends and specific factors
affecting  the footwear  industry in general and our business in  particular  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations",  Item 7 of our Annual Report on Form 10-K for the fiscal year 2003.
Those trends and factors  continue to be relevant to the  Company's  performance
and financial condition.

Critical Accounting Estimates
-----------------------------

     The  preparation  of  financial   statements  and  related  disclosures  in
conformity with accounting  principles  generally  accepted in the United States
requires management to make judgments, assumptions and estimates that affect the
amounts  reported.  Please  refer  to  the  discussion  of  critical  accounting
estimates in the Company's Annual Report on Form 10--K for the fiscal year ended
November 28, 2003 for additional information.




<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

Contingencies
-------------

     The sale of Tommy Hilfiger branded footwear is a significant portion of our
business.  The Tommy  Hilfiger  footwear  sales are  contingent on our licensing
agreement with Tommy Hilfiger Licensing,  Inc. During fiscal 2003, we negotiated
the renewal of the agreement  for an additional  term. In early January 2004, we
finalized the terms of the license  agreement,  which will expire in March 2007.
We expect to meet our obligations under the Tommy Hilfiger license agreement and
accordingly,  we believe  that no  provision  is  currently  required  for costs
related to the  potential  loss of this license.  If we lose the Tommy  Hilfiger
license, our business would be materially and adversely affected.

Results of Operations
---------------------

     The following  table  summarizes the Company's  performance  for the second
quarter  and first six months of fiscal  2004 as compared to the results for the
same periods in fiscal 2003:

<TABLE>
Increase (Decrease) Percent vs. 2003 Results:
---------------------------------------------
<CAPTION>
                                           Second Quarter      Six Months
                                           --------------      ----------
<S>                                               <C>             <C>
Net sales                                         6.9%            (1.8)%
Gross profit                                      4.1%            (2.1)%
Selling and administrative expenses               1.3%            (2.8)%
Operating income                                 11.4%            (0.2)%
Income before income taxes                        8.1%            (1.8)%
Net income                                        6.1%            (3.3)%
</TABLE>

<TABLE>
Operating Ratios as a Percent of Net Sales:
-------------------------------------------
<CAPTION>
                                         Second Quarter       Six Months
                                         --------------   -------------------
                                          2004    2003       2004     2003
                                         ------  ------   --------   --------
<S>                                       <C>       <C>      <C>       <C>
Gross profit                              38.5%     39.5%    38.7%     38.8%
Selling and administrative expenses       27.0%     28.5%    28.5%     28.8%
Operating income                          11.5%     11.0%    10.2%     10.0%
Income before income taxes                11.7%     11.5%    10.4%     10.4%
Net income                                 7.2%      7.3%     6.4%      6.5%
</TABLE>


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

Second Quarter 2004 Compared to Second Quarter 2003
---------------------------------------------------

Net Sales
---------

<TABLE>
The second quarter breakdown of net sales is as follows:
<CAPTION>
                                                                  Percent
                                                                   Change
                                                                  2004 vs.
                                             2004       2003        2003
                                           ---------  ---------  -----------
                                                 (In millions, except
                                                     percentages)
<S>                                         <C>        <C>           <C>
Stride Rite Children's Group - Wholesale    $20.5      $19.2         6.8%
Stride Rite Children's Group - Retail        43.2       39.3         9.8%
                                           ---------  ---------  -----------

Stride Rite Children's Group                 63.7       58.5         8.8%
Keds                                         48.7       50.2        (2.9)%
Tommy Hilfiger Footwear                      28.7       24.1        18.8%
Sperry Top-Sider                             19.7       18.5         6.4%
Stride Rite International                     7.0        5.6        25.8%
Elimination of intercompany sales            (2.8)      (2.6)       n/a
                                           ---------  ---------  -----------

Total net sales                            $165.0     $154.3         6.9%
                                           =========  =========  ===========
</TABLE>

     During the second quarter of fiscal 2004,  consolidated net sales increased
$10.7 million to $165.0  million,  or 6.9% above the sales level achieved in the
second  quarter of fiscal 2003.  Wholesale net revenues  decreased  5.6% for the
second  quarter of 2004,  while overall  retail sales  increased $3.9 million or
9.8% when  compared  to the same  period in the prior year.  Unit  shipments  of
current line merchandise for the wholesale brands during the second quarter were
6.1% greater than the  comparable  period in 2003.  The Company's  average first
quality  wholesale  selling price declined 3.2% from the second quarter of 2003.
In addition,  closeout sales  increased 3.9% during the second quarter of fiscal
2004 as compared to the prior year.  Royalty revenues at $1.8 million were 13.4%
higher in the 2004 second quarter versus the same quarter last year.

     Net sales of the Stride Rite Children's Group increased 8.8% for the second
quarter of fiscal 2004, compared to the same period of fiscal 2003. Sales of the
Children's  Group to  independent  retailers  increased  6.8%  during the second
quarter of 2004 as compared to the same  quarter  last year.  This  increase was
primarily  attributable to higher sales of Tommy Hilfiger Children's products, a
strong performance by sandals and increased closeout sales. These increases were
partially  offset  by  continued  weakness  in the  Munchkin  brand as well as a
greater  number of returns.  Adding to the increases  from the wholesale side of
the division were increased sales of the Children's Group's company-owned retail
stores,  which were up 9.8% from the same quarter last year. Sales at comparable
Children's  Group retail  stores  (stores open for 52 weeks in each fiscal year)
increased 7.8% for the second fiscal  quarter of 2004.  Driving this increase in
the comparable stores


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

category  was the  addition of  newer stores  which  have  generally had greater
sales increases than our more mature stores. At the end of the second quarter of
fiscal 2004, the Stride Rite  Children's  Group operated 240 stores.  This is an
increase of 10 stores,  or 4% from the end of the same period in the prior year.
Current  plans call for the opening of  approximately  18 retail  stores and the
closing of 4  underperforming  locations during the 2004 fiscal year. During the
second  quarter  of 2004  the  Company  opened  7 new  stores  and had no  store
closings.

     Keds sales  decreased  in the second  quarter of fiscal 2004 due in part to
initial retailer caution in ordering Keds products, based on poor performance at
retail in Spring 2003.  In addition,  the Keds  seasonal  product  lines did not
generate the anticipated level of reorders in the quarter.  Partially offsetting
the disappointing  performance of Keds seasonal styles, the Microstetch  product
line's sales results were strong during the second  quarter,  continuing a trend
that began in the first quarter.

     The Tommy Hilfiger  footwear  division  recorded  stronger sales during the
second  quarter  of fiscal  2004  after the weak  sales in fiscal  2004's  first
quarter.  The  improvement was primarily the result of a strong beach program in
the women's category,  along with the introduction of both the "H" Hilfiger line
and the Tommy Girl line.  These  increases were partially  offset by weakness in
the men's  athletic  category.  Additionally,  closeout  sales  increased in the
quarter and good  performance  on key  programs  resulted in a decrease in sales
allowances.

     The 6.4%  increase  in the sales of Sperry  Top-Sider  products  during the
first quarter of the 2004 fiscal year was primarily attributable to strong sales
of men's  casual  footwear and  performance  boat shoes.  Sales  declines in the
women's product  category in the second quarter,  primarily caused by weaknesses
in canvas styles, offset a portion of the gains in men's products.

     The Stride Rite  International  division had a 25.8%  increase in net sales
during the second quarter of fiscal 2004 in comparison to the same period in the
prior year. While this sales  performance was solid in most product  categories,
it was largely the result of the  continued  strong sales of the Tommy  Hilfiger
footwear product line, particularly in Asia and Latin America.



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

Gross Profit
------------

     During the second  quarter of fiscal 2004,  the  Company's  gross profit of
$63.5 million  increased $2.5 million or 4.1% above the amount  recorded  during
2003's second quarter. Increased revenues at the company-owned retail stores was
a significant  contributor to the improvement in gross profit.  The gross profit
rate for fiscal 2004's second quarter decreased one percentage point to 38.5% as
compared to the 39.5% rate  achieved in the prior  year's  second  quarter.  The
reduction in gross profit percentage was primarily attributable to lower in-line
product  gross profit  margins,  related to higher  freight  costs,  and greater
closeout and inventory  obsolescence  costs.  These  reductions  were  partially
offset by the higher relative  percentage of retail sales and decreased  returns
and allowances.

Operating Costs
---------------

     During  the second  quarter  of fiscal  2004,  selling  and  administrative
expenses were $44.6 million,  an increase of $0.6 million or 1.3% as compared to
the second quarter of fiscal 2003. As a percent of sales,  operating  costs were
27.0% in the  second  quarter  of fiscal  2004  compared  to 28.5% in the second
quarter of fiscal 2003.  This decrease in operating costs as a percentage of net
sales resulted from the Company's  expense  containment  being  leveraged by the
increase in net sales for the 2004 second quarter.  During the second quarter of
fiscal  2004,  advertising  costs were 5.3% of net sales  versus  5.6% in fiscal
2003.  The  increase in operating  costs was  primarily  attributable  to higher
expenses in Children's Group retail stores, chiefly associated with the increase
in the number of company-owned retail stores and an increase in costs related to
distribution.

Other Income and Taxes
----------------------

     Other  income  (expense)  increased  pre-tax  income by $0.3 million in the
second quarter of fiscal 2004 and by $0.8 million in the second quarter of 2003.
Investment income decreased $0.4 million in the second fiscal quarter of 2004 as
compared  to the same  quarter  last  year.  Investment  income  related  to the
Company's cash equivalents increased $0.3 million in the first fiscal quarter of
2004, due to greater average investment  balances.  Offsetting this increase was
the $0.7  million  that was  received in the second  quarter of 2003  related to
Stride  Rite's sale of its interest in a joint  venture  footwear  manufacturing
facility.  Interest  expense was slightly  lower in the second quarter of fiscal
2004 as compared to the second quarter of fiscal 2003. No short-term  borrowings
were made during the second quarters of either fiscal year 2004 or 2003.



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

     The provision for income taxes increased $0.8 million in the second quarter
of fiscal 2004 as compared to the similar  period in fiscal 2003.  This increase
was primarily due to the higher pre-tax  income amount,  combining with a higher
effective  income  tax rate.  Our  effective  tax rate was  38.1% in the  second
quarter of fiscal  2004 as  compared  to 37.0% in the  second  quarter of fiscal
2003.  The higher tax rate in the second  quarter of fiscal 2004 reflects  fewer
tax saving items in 2004 than in the prior year.

Net Income
----------

     Net income for the second  quarter  of fiscal  2004 was $11.9  million,  an
increase  of $0.7  million,  or 6.1% as compared to the same period in the prior
year.  Higher net sales and the resulting  increase in gross profit dollars were
somewhat  offset by the  increases in operating  costs and the higher  effective
income tax rate. The Company's  return on net sales of 7.2% in the second fiscal
quarter of 2004 declined versus the 7.3% return on sales recorded for the second
fiscal quarter of 2003.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

First Six Months of 2004 Compared to the First Six Months of 2003
-----------------------------------------------------------------

Net Sales
---------
<TABLE>
The first six months breakdown of net sales is as follows:
<CAPTION>
                                                                      Percent
                                                                      Change
                                                                     2004 vs.
                                               2004        2003        2003
                                               ----        ----     ----------
                                            (In millions, except percentages)
<S>                                            <C>         <C>         <C>
Stride Rite Children's Group - Wholesale       $45.6       $47.9       (4.8)%
Stride Rite Children' Group - Retail            72.2        64.9        11.3%
                                             -------     -------     -------

Stride Rite Children's Group                   117.8       112.8         4.5%
Keds                                            91.1       105.8      (13.8)%
Tommy Hilfiger Footwear                         48.9        48.9         -
Sperry Top-Sider                                34.4        32.9         4.8%
Stride Rite International                       13.8        11.8        16.6%
Elimination of intercompany sales              (4.9)       (5.6)        n/a
                                             ------      ------      ------

Total net sales                              $301.1      $306.6        (1.8)%
                                             ======      ======      =======
</TABLE>

     During  the  first  six  months  of  fiscal  2004,  consolidated  net sales
decreased $5.5 million to $301.1 million, or 1.8% below the sales level recorded
in the first six months of fiscal 2003.  Wholesale net revenues  decreased  5.4%
for the first half of 2004, while overall retail sales increased $7.6 million or
11.4% when compared to the same period last year. Unit shipments of current line
merchandise  for the  wholesale  brands  during the first half of 2004 were 1.0%
lower than last year's first half. The Company's average first quality wholesale
selling  price  declined  4.1% from the first six months of 2003.  In  addition,
closeout sales decreased 1.9% in the first six months of fiscal 2004 as compared
to the prior  year.  Royalty  revenues at $3.6  million  were 7.8% higher in the
first half of 2004 than in the same period in the prior year.

     Net sales of the Stride Rite Children's  Group increased 4.5% for the first
half of fiscal  2004,  compared  to the same  period of  fiscal  2003.  Sales to
independent  retailers decreased 4.8% during the first six months of 2004 versus
the same period last year.  The decrease in sales to  independent  retailers was
principally the result of the Footstar  bankruptcy,  continued weakness with the
Munchkin  product line, and cautious  buying  activity in the  department  store
channel.  Partially  offsetting  these declines were increases in closeout sales
and promotional products for certain accounts.  As compared to the first half of
last year the  Children's  Group has seen a shift in sales of the Tommy Hilfiger
Kids  products  from the  department  store  channel  to the  mid-tier  channel.
Offsetting  the  decrease  in the  wholesale  side  of the  division,  were  the
increased sales of the Children's  Group's  company-owned  retail stores,  which
were up 11.3%  during the first six months of fiscal 2004 versus the same period
last year.  Sales at comparable  Children's Group retail stores (stores open for
52 weeks in each fiscal year)  increased 9.4% for the first half of fiscal 2004.
A major reason for the increase in the comparable

PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

store sales results was the addition of a number of newer stores, which have
generally recorded better sales performance than many of our more mature stores.

     Keds  sales  decreased  in the  first  half of  fiscal  2004 due in part to
continued retailer caution in ordering Keds products,  based on poor performance
at retail in Spring 2003. In addition,  the Keds seasonal  product lines did not
generate the anticipated  level of reorders.  Sales of  Grasshoppers,  which are
included in the Keds results, were also down as compared to the same period last
year, due  principally to their loss of shelf space at certain major  department
store customers.  Partially  offsetting the  disappointing  performance of their
seasonal  styles,  Keds  experienced  strong  sales  with its  newly  introduced
Microstretch(TM) products.

     The Tommy Hilfiger footwear unit's sales  performance  during the first six
months of fiscal 2004 was flat with the same period in the prior year.  Compared
with  last  year's  first  half,  there  was an  overall  decrease  in the men's
business.  Offsetting this decrease were increased sales of ProKeds  products in
addition to strong  performance by the women's beach programs.  During the first
half of  fiscal  2004  both the "H"  Hilfiger  and the  Tommy  Girl  lines  were
introduced.

     Sales of Sperry  Top-Sider  products  increased for the first six months of
fiscal 2004. This increase was primarily the result of strong performance in the
men's product  lines,  particularly  in the  performance  category.  This strong
showing was partially  offset by weaknesses in the women's line,  principally in
the canvas  category.  Sales were also adversely  affected by the acquisition by
West Marine of Boat U.S.  retail  operations,  two  important  accounts  for the
division.

     The Stride Rite  International  division had a 16.6%  increase in net sales
for the first  half of 2004,  versus  the same  period in the  prior  year.  The
addition of new distributors of the Company's brands in Asia and increased sales
of Tommy  Hilfiger  and Sperry  Top-Sider  products  in Latin  America  were the
primary reasons for the increase.

Gross Profit
------------

     During the first half of fiscal 2004, the Company's  gross profit of $116.5
million decreased $2.5 million or 2.1% below the amount recorded during the same
period last year.  The gross profit rate for the first six months of fiscal 2004
decreased slightly as compared to the same period last year, 38.7% to 38.8%. The
decrease in first half gross profit was  primarily the result of the lower level
of  wholesale  sales  during the period.  The  additional  gross profit that was
generated by the higher  levels of retail sales was  insufficient  to offset the
impact  from the  decline in gross  profit  resulting  from the lower  wholesale
sales. The decline in gross profit percentage versus last year was due primarily
to  increased  freight  costs and a higher  level of  returns  which was  offset
somewhat by the gross  profit  percentage  impact of the greater  percentage  of
retail sales.



<PAGE>




PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

Operating Results
-----------------

     Operating  expenses  for the first six  months  of fiscal  2004 were  $85.9
million,  a decrease  of $2.5  million or 2.8% as compared to the same period in
fiscal 2003. As a percent to sales, operating costs were 28.5% in the first half
of fiscal 2004 versus 28.8% in the first half of last year. During the first six
months of fiscal 2004,  advertising expenses as a percent of net sales were 5.0%
versus 5.4% on the same period last year. Advertising spending decreased at most
of the Company's  brands and reflects a change in the timing of our  advertising
programs  from  last  year.  In  addition  to  the  lower   advertising   costs,
administrative expenses also decreased. Somewhat offsetting these decreases were
higher retail store payroll expenses,  due to the increased number of stores and
also higher distribution costs.

Other Income and Taxes
----------------------

     Other  income  (expense)  increased  pre-tax  income by $0.7 million in the
first six months of fiscal  2004 and by $1.3  million in the first six months of
fiscal 2003. Investment income in the first half of fiscal 2004 was $0.6 million
below the same period of fiscal 2003.  Comparisons of investment  income to last
year are negatively  impacted by the receipt in fiscal year 2003 of $0.7 million
related  to Stride  Rite's  sale of its  interest  in a joint  venture  footwear
manufacturing  facility.  Interest  expense in the first half of fiscal 2004 was
slightly below the level recorded last year. There were no short-term borrowings
during the first half of either fiscal 2004 and 2003.

     The provision for income taxes  increased $0.1 million in the first half of
fiscal  2004 as  compared  to the  similar  period in fiscal  2003.  This slight
increase was primarily due to the higher  effective  income tax rate  offsetting
the lower  pre-tax  income  amount.  During the first half of fiscal  2004,  the
effective  tax rate was 38.1% as  compared  to the 37.2% rate during last year's
first  half.  The higher tax rate  during the first six months of fiscal 2004 is
the result of fewer tax saving items this year as compared to fiscal 2003.

Net Income
----------

     Net  income for the first six months of fiscal  2004 was $19.4  million,  a
decrease  of $0.7  million,  or 3.3% below that of the same  period in the prior
year.  Decreased net sales and the resulting  reduction in gross profit  dollars
were offset by lower operating  expenses.  Lower other income (expense) combined
with our higher  effective  income tax rate lead to the  reduction in net income
during  the first half of fiscal  2004  versus the same  period  last year.  The
Company's  return on net sales of 6.4% in the first fiscal half of 2004 declined
slightly as  compared to the 6.5% return on sales  realized in the first half of
fiscal 2003.



<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 the  end of the  second  fiscal  quarter  of  2004,  our  balance  sheet
reflected  a  current  ratio  of  4.5 to 1 with  no  debt.  Our  cash  and  cash
equivalents  totaled  $79.6  million at May 28, 2004, a decrease of $1.9 million
from the total  cash and cash  equivalents  of $81.5  million  at the end of the
second  quarter of fiscal 2003.  The Company  maintains a $75 million  revolving
credit facility to fund any seasonal  working capital needs. No borrowings under
this line of credit were outstanding as of May 28, 2004 or May 30, 2003.

     The  Company's  seasonal  cash flow  patterns  typically  provide cash from
operations  during the second  quarter of the fiscal year.  During the first six
months  of  fiscal  2004,  the  Company  generated  $3.0  million  of cash  from
operations.  This  positive  cash flow was below  the  $15.3  million  cash flow
generated  during the first six months of fiscal 2003.  The primary  reasons for
the lower  level of cash flow were  greater  increases  in  accounts  receivable
balances  and a lower  reduction of  inventory  levels  versus the first half of
fiscal 2003.  Inventory  levels at the end of the second  quarter of fiscal 2004
increased $4.1 million, or 5.3% from the levels recorded at the end of the prior
year's second quarter.  Accounts receivable at May 28, 2004 were $9.1 million or
13.0%  higher than the amount at the end of last  year's  second  quarter.  This
increase is primarily  attributable to a greater level of sales that occurred in
the last month of the second  quarter as  compared  to fiscal  2003.  Days sales
outstanding,  which is a  measure  of the  length  of the  collection  period of
accounts  receivable,  was 41 days and 40 days at the end of the  second  fiscal
quarters of both 2004 and 2003, respectively. Accounts payable at the end of the
second  quarter of fiscal 2004 increased $8.5 million from the level recorded at
the end of the prior year's second  quarter.  This  difference was primarily the
result of an increase in inventory  in-transit at the end of the second  quarter
of fiscal 2004. During the first fiscal quarter of 2004, the Company contributed
$1.0 million to its defined benefit pension plan. The Company does not intend to
make any additional contributions to its defined benefit pension plan this year.
Other current  assets at May 28, 2004 were $10.7 million or $5.5 million  higher
than the amount at the end of last year's second  quarter.  This  difference was
primarily caused by an increase in prepaid pension  expense,  largely due to the
$8 million of pension  contributions  that have  occurred  since the end of last
year's second quarter.

     Additions to property and equipment  totaled $3.7 million in the first half
of 2004,  which was  greater  than the $3.5  million  in the first half of 2003.
During the first half of fiscal 2004,  as compared to the same period last year,
the Company increased its spending on information  technology and e-commerce and
had  lower  spending  on  new  retail  stores,  store  renovations,  and  at its
distribution  centers.  Funding of our capital  expenditures  was provided  from
internal  sources.  We expect that all capital purchases during fiscal 2004 will
be provided for  internally,  however if business  conditions  change and do not
allow for internal funding, we will re-evaluate our plans.



<PAGE>


 PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

     During  the  first  half  of  fiscal  2004 we  returned  $26.4  million  to
shareholders  through  share  repurchases  and cash  dividends.  We spent  $21.3
million in the second  quarter to repurchase  2,008,900  common shares under our
share repurchase  program. As of May 28, 2004, 1.4 million shares were remaining
on our share repurchase  authorization.  On June 24, 2004 the Company's Board of
Directors  increased  the  authorization  under our  on-going  share  repurchase
program by 5 million shares. This action had the effect of increasing the shares
remaining on our share repurchase authorization to 6.4 million shares. We expect
to continue to purchase  shares  opportunistically  through the remainder of the
fiscal year.

     At the end of the second  quarter of fiscal 2004,  there were no borrowings
outstanding under the Company's $75 million  revolving credit facility.  This is
consistent  with the  second  quarter of fiscal  2003.  We did not  utilize  any
available  credit under the revolving credit line during the first six months of
fiscal 2004.  Borrowings were not required during this time primarily because we
entered  the  year  with no  outstanding  debt and a  significant  cash and cash
equivalents  balance.  As of May 28,  2004,  letters  of credit  totaling  $56.7
million were outstanding for the purchase of inventories.  All letters of credit
generally expire within one year.

     We do not have any relationships with unconsolidated  entities or financial
partnerships,  such as  entities  often  referred  to as  structured  finance or
special purpose  entities,  which would have been established for the purpose of
facilitating  off-balance-sheet  arrangements or other  contractually  narrow or
limited  purposes.  As such,  we are not  exposed to any  financing,  liquidity,
market or credit risk that could arise if we had engaged in such relationships.

ITEM 4.     CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

     Within the 90 days prior to the date of this  report,  the Company  carried
out an  evaluation  under  the  supervision  and with the  participation  of the
Company's management,  including the Company's Chief Executive Officer and Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of the
Company's  disclosure  controls and procedures pursuant to the Exchange Act Rule
13a-15.  Based  upon that  evaluation,  the Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are  effective  in  timely  alerting  them to  material  information
relating to the Company (including its consolidated subsidiaries) required to be
included in the  Company's  periodic  filings with the  Securities  and Exchange
Commission.

(b) Changes in internal controls.

      None.


<PAGE>


PART II - OTHER INFORMATION

                           THE STRIDE RITE CORPORATION

ITEM 2.     CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF
            EQUITY SECURITIES

<TABLE>
      Our repurchases of equity securities for the second quarter of fiscal 2004
were as follows:

<CAPTION>
                                                          Total
                                                          Number Of  Maximum
                                                          Shares     Number
                                                          Purchased  Of Shares
                                                          As Part    That May
                                      Total       Average Of         Yet Be
                                      Number      Price   Publicly   Purchased
                                      Of          Paid    Announced  Under The
                                      Shares      Per     Plans Or   Plans Or
Period                                Purchased   Share   Programs   Programs
--------------------------------------------------------------------------------

February 28,2004 - March 26, 2004            -         -          -  3,403,600

<S>   <C> <C>          <C> <C>        <C>         <C>     <C>        <C>
March 27, 2004 - April 30, 2004       1,386,000   $10.62  1,386,000  2,017,600

May 1, 2004 - May 28, 2004              622,900   $10.60    622,900  1,394,700
                                      ---------   ------  ---------  ---------
Total                                 2,008,900   $10.62  2,008,900  1,394,700
                                      =========   ======  =========  =========
</TABLE>

In  September  2002,  the  Board  of  Directors  authorized  a stock  repurchase
program  allowing the repurchase of up to five million shares of our outstanding
common stock. Under the authorization,  the Company can repurchase shares in the
open market or through privately negotiated transactions. The repurchase program
does not have an  expiration  date.  All  shares  repurchased  during the period
covered by this report were purchased under a publicly announced plan.


<PAGE>


PART II - OTHER INFORMATION (continued)

ITEM 4      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Annual  Meeting  of the  Company's  shareholders  was held on April 15,
2004.  The two directors  nominated by  management  were elected by the vote set
forth below:

                                                        Votes
                                            ------------------------------
              Name of Director              For           Withheld
              --------------------------    ------------------------------
              Christine M. Cournoyer        33,503,367    3,246,621
              James F. Orr III              33,587,123    3,162,865

     The Company's  other  directors,  whose term of office  continues after the
2004 stockholders' meeting, are as follows:

                           David M. Chamberlain
                           Shira D. Goodman
                           Frank R. Mori
                           Myles J. Slosberg
                           Bruce Van Saun

     The  Company's  shareholders  also  ratified  the  Company's  selection  of
PricewaterhouseCoopers  LLP as  auditors of the Company for the 2004 fiscal year
by the vote set forth below:

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

             36,255,575        463,367         31,046

     The shareholders voted in favor of a proposal requesting that the directors
consider  and act upon to approve an  amendment  to The Stride Rite  Corporation
2001 Stock Option and Incentive  Plan to increase the number of shares of common
stock  authorized for issuance from 3,000,000 to 6,000,000 by the vote set forth
below:

                        Votes
             --------------------------------------------------------------
                                                                Broker
                 For           Against       Abstentions       Non-Vote
                 ---           -------        ----------       --------

             21,107,951      7,961,950       2,019,247        5,660,840




<PAGE>


PART II - OTHER INFORMATION

                           THE STRIDE RITE CORPORATION

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K


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

                Exhibit Number       Description
                --------------       -----------

                31.1                 Certification of Principal Executive
                                     Officer pursuant to Exchange Act Rules
                                     13a-15(e) and 15d-15(e), as adopted
                                     pursuant to Section 302 of Sarbanes-Oxley
                                     Act of 2002.

                31.2                 Certification of Principal Financial
                                     Officer pursuant to Exchange Act Rules
                                     13a-15(e) and 15d-15(e), as adopted
                                     pursuant to Section 302 of Sarbanes-Oxley
                                     Act of 2002.

                32.1                 Certification of Principal Executive
                                     Officer pursuant to 18 U.S.C. Section 1350,
                                     as adopted pursuant to Section 906 of
                                     Sarbanes-Oxley Act of 2002.

                32.2                 Certification of Principal Financial
                                     Officer pursuant to 18 U.S.C. Section 1350,
                                     as adopted pursuant to Section 906 of
                                     Sarbanes-Oxley Act of 2002.

         (b)    Reports on Form 8-K
                -------------------

                On March 25, 2004, the Company filed a current report on Form
                8-K (Item 12) with respect to its press release announcing the
                Company's financial results for the three months ended February
                27, 2004.

                On June 22, 2004, the Company filed a current report on Form 8-K
                (Item 12) with respect to its press release announcing the
                Company's financial results for the three and six months ended
                May 28, 2004.


<PAGE>


                           THE STRIDE RITE CORPORATION

                                   SIGNATURES



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



Date:  July 8, 2004                 By:  /s/ Frank A. Caruso
                                    --------------------------
                                         Frank A. Caruso
                                         Chief Financial Officer