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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 September 2, 2005

( )   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



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

          Yes (X)         No ( )

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

          Yes(X)          No ( )

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

          Yes( )          No (X)

As of October 11, 2005, 36,249,629 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
                             (Dollars in thousands)

<CAPTION>
                                   September 2,                      August 27,
                                       2005          December 3,        2004
                                   (Unaudited)          2004        (Unaudited)
                                 ---------------   --------------  -------------
  Assets

  Current Assets:
     Cash and cash
<S>                                   <C>              <C>             <C>
      equivalents                     $92,281          $20,005         $19,056

     Marketable securities                  -           70,850          65,850

     Accounts and notes
      receivable, net                  70,440           47,730          69,998

     Inventories                       86,171           87,790          80,604

     Deferred income taxes             16,363           13,123          15,167

     Other current assets              10,384           15,681          10,140
                                     --------         --------        --------

     Total current assets             275,639          255,179         260,815

  Property and equipment, net          50,964           54,246          56,874

  Other assets                         14,039           11,871          12,582
                                     --------         --------        --------

     Total assets                    $340,642         $321,296        $330,271
                                     ========         ========        ========

</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)
                      (In thousands, except for share data)

<CAPTION>
                                  September 2,                      August 27,
                                      2005         December 3,         2004
                                  (Unaudited)         2004          (Unaudited)
                                ---------------  --------------   --------------

  Liabilities and Stockholders' Equity

  Current Liabilities:
<S>                                  <C>              <C>               <C>
     Accounts payable                $12,843          $21,046           $17,450
     Income taxes payable             19,135           15,316            17,288
     Accrued expenses and other
       liabilities                    23,553           21,377            21,164
                                   ---------        ---------      ------------
     Total current liabilities        55,531           57,739            55,902

  Deferred income taxes                  303              487               844
  Pension obligation and other
       long-term liabilities          16,184           16,208            13,145

  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
       Shares outstanding -
        36,247,259 on
        September 2,2005,
        35,907,478 on
        December 3, 2004 and
        36,947,413 on August
        27,2004                       14,237           14,237            14,237

     Capital in excess of par
       value                          14,474           15,969            15,288

    Retained earnings                455,598          434,147           435,890
    Accumulated other
        comprehensive loss            (9,022)          (9,398)          (7,796)
     Less cost of 20,699,285
        shares of common stock
        held in treasury
        (21,039,066 on December
        3, 2004 and 19,999,131
        on August 27, 2004)         (206,663)        (208,093)        (197,239)
                                   ---------        ---------         --------
     Total stockholders' equity      268,624          246,862          260,380
                                   ---------        ---------         --------

     Total liabilities and
        stockholders' equity        $340,642         $321,296         $330,271
                                   =========        =========         ========

</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 periods ended September 2, 2005 and August 27, 2004
                         (In thousands, except per share data)

                         Three Months Ended             Nine Months Ended

<CAPTION>
                     September 2,    August 27,    September 2,     August 27,
                         2005           2004           2005            2004
                    ---------------  ------------  --------------   ------------
<S>                 <C>              <C>           <C>              <C>
Net sales           $146,237         $140,382      $456,469         $441,525

Cost of sales         88,047           89,197       272,536          273,825
                    --------         --------      --------         --------

Gross profit          58,190           51,185       183,933          167,700

Selling and
  administrative
  expenses            47,136           41,831       141,615          127,760
                    --------         --------      --------         --------

Operating income      11,054            9,354        42,318           39,940


Investment income        441              298         1,120            1,342
Interest expense         (84)             (79)         (255)            (235)
Other income
(expense), net           338              (85)          200             (233)
                    --------         ---------     --------         --------
                         695              134         1,065              874

Income before
  income taxes        11,749            9,488        43,383           40,814

Provision for
  income taxes         4,034            3,269        15,755           15,211
                    --------         --------      --------         --------

Net income            $7,715           $6,219       $27,628          $25,603
                    ========         ========      ========         ========

Net income per
   common share:
   Diluted            $  .21           $  .16       $   .74          $   .65
                    ========         ========      ========         ========
   Basic              $  .21           $  .17       $   .76          $   .66
                    ========         ========      ========         ========

Dividends per
   common share       $  .06           $  .05       $   .17          $   .15
                    ========         ========      ========         ========

Average common
 shares used in
   per share
   computations:
   Diluted            37,396           38,159        37,188           39,311
                    ========         ========      ========         ========
   Basic              36,292           37,467        36,158           38,508
                    ========         ========      ========         ========
</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 CASH FLOWS (UNAUDITED)
         For the nine months ended September 2, 2005 and August 27, 2004
                            (Dollars in thousands)

<CAPTION>
                                                        2005             2004
                                                    --------------   -----------
Cash flows from operating activities:
<S>                                                   <C>              <C>
   Net income                                         $27,628          $25,603
   Adjustments to reconcile net income to net
      cash provided by operating
      activities:
   Depreciation and amortization                        9,481            9,478
   Deferred income taxes                               (3,425)            (311)
   Compensation expense related to stock plans            568                -
   Gain related to long-term investments                  (61)               -
   Loss on disposals of property and equipment            152              218
   Changes in:
      Accounts and notes receivable                   (22,649)         (18,899)
      Inventories                                       1,633            1,332
      Other current assets                              8,307           10,655
      Other current liabilities                        (3,102)          (8,281)
      Other long-term assets                           (2,167)           1,733
      Other long-term liabilities                         (25)               -
   Contribution to pension plan                        (3,000)          (1,000)
                                                    ---------        ---------
      Net cash provided by operating
      activities                                       13,340           20,528
                                                    ---------        ---------


Cash flows from investing activities:
   Additions to property and equipment                 (6,351)          (5,767)
   Investments in marketable securities
      available for sale                              (29,325)         (51,550)
   Proceeds from sale of marketable securities
      available for sale                              100,175           77,850
   Distributions from long-term investments                61                -
                                                    ---------        ---------
      Net cash provided from investing activities      64,560           20,533
                                                    ---------        ---------

Cash flows from financing activities:
   Proceeds from sale of stock under stock plans        7,628            3,981
   Cash dividends paid                                 (5,772)          (5,824)
   Repurchase of common stock                          (7,771)         (31,249)
                                                    ---------        ---------
      Net cash used in financing activities            (5,915)         (33,092)
                                                    ---------        ---------


Effect of exchange rate changes on cash and
      cash equivalents                                    291              (35)
                                                    ---------        ----------

Net increase in cash and cash equivalents              72,276            7,934

Cash and cash equivalents at beginning of the
period                                                 20,005           11,122
                                                    ---------        ---------

Cash and cash equivalents at end of the period        $92,281          $19,056
                                                    =========        =========
</TABLE>

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

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 September 2, 2005 and August
27, 2004 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
September  2, 2005 and August 27,  2004 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 December
3, 2004 on Form 10-K, which included all information and footnotes necessary for
such presentation.

     In the first  quarter  of fiscal  2005 the  Company  concluded  that it was
appropriate  to  classify  its auction  rate  securities  as current  marketable
securities. These securities are considered available for sale. Previously, such
securities had been classified as cash and cash  equivalents.  Accordingly,  the
Company has revised the  classification in all periods presented to report these
securities as  short-term  marketable  securities in its condensed  consolidated
balance  sheets.  The Company  has also made  corresponding  adjustments  to its
condensed  consolidated  statements of cash flows to reflect the gross purchases
and sales of these securities as investing activities rather than as a component
of cash and cash  equivalents.  This  change in  classification  does not affect
previously  reported cash flows from operating or from  financing  activities in
its  condensed  consolidated  statements  of cash flows or  previously  reported
condensed consolidated statements of income.

     Also in the first quarter of fiscal 2005,  the Company  recorded a one-time
non-cash  charge to conform its  accounting  policies  with  generally  accepted
accounting  principles  related to the timing of rent expense for certain retail
store locations. The amount of this first quarter cumulative charge was $436,000
before tax and  $269,000  after tax.  The impact on earnings  per share was less
than $.01 for both the first quarter and year to date periods.  Previously,  the
Company followed a practice prevalent across the retailing industry, in which it
began recording rent expense when the store opened and the lease term commenced.
Beginning  with the 2005 fiscal year,  the Company  records rent expense when it
takes  possession of a store,  which occurs before the commencement of the lease
term and  approximately  30 to 60 days prior to the  opening of the store.  This
results in an acceleration  of the  commencement of rent expense for each lease,
as the Company begins recording rent expense during the pre-opening  period, but
a reduction  in monthly rent  expense,  as the total rent due under the lease is
amortized over a greater number of months.  Financial  results for prior periods
have  not  been  restated  due to the  immateriality  of  these  amounts  to the
consolidated  statement  of income and the  consolidated  balance  sheet of each
prior year.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     This change will not affect  historical  or future cash flows or the timing
or  amounts  of  payments  under  related  leases,  as this  related  solely  to
accounting  treatment.  Furthermore,  it is not  expected  to have any  material
impact on future earnings.

     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 valuation
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 materially from those estimates.

Stock Purchase and Option Plans

     During the first quarter of fiscal 2003, the Company adopted the disclosure
provisions  of  Financial   Accounting  Standards  Board  (FASB)-  Statement  of
Financial  Accounting  Standard  (SFAS) No.  148,  "Accounting  for Stock  Based
Compensation - Transition and  Disclosure"  (SFAS No. 148), an amendment of SFAS
No. 123, "Accounting for Stock-Based  Compensation".  SFAS No. 148 requires that
companies  make quarterly  disclosures  regarding the pro forma effects of using
the fair-value method of accounting for stock-based compensation,  effective for
interim periods beginning after December 15, 2002.

     At September 2, 2005, 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 December 3, 2004 as contained on
Form 10-K.  The  Company  accounts  for these plans  under the  recognition  and
measurement   principles  of  Accounting   Principles   Board  Opinion  No.  25,
"Accounting   for   Stock   Issued   to   Employees",   (APB  25)  and   related
interpretations.

     In January 2005, the Company issued  performance-based  restricted stock to
certain employees.  These shares have both service and performance criteria that
must be met.  Depending  on the  performance  achievement  level,  the amount of
restricted  stock can be increased up to 150% or decreased to zero. These shares
also earn dividend  equivalents until they vest. The Company accounted for these
shares in accordance with APB 25 and FASB Interpretation No. 28, "Accounting for
Stock  Appreciation  Rights and Other Variable Stock Option or Award Plans" (FIN
28). The Company is recognizing  compensation  expense based on market values at
the end of each quarterly period.



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     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        Nine Months Ended

<CAPTION>
                                Sept. 2,     Aug. 27,      Sept. 2,     Aug. 27,
                                  2005         2004          2005         2004
                              --------------------------------------------------
                                   (In thousands, except for per share data)
<S>                             <C>           <C>         <C>          <C>
Net income, as reported         $7,715        $6,219      $27,628      $25,603

Add:  Stock-based employee
compensation expense included
in net income, net of related
tax effects                        146             3          393            9

Deduct:  Total stock-based
employee compensation expense
determined under fair value
based method for all awards,
net of related tax effects
                                  (671)         (492)      (1,813)      (1,432)
                               --------     ---------    ---------    ---------

Pro forma net income            $7,190        $5,730      $26,208      $24,180
                               =======      ========     ========     ========

Earnings per share:
   Basic - as reported          $  .21       $   .17      $   .76      $   .66
                               =======      ========     ========     ========
   Basic - pro forma            $  .20       $   .15      $   .72      $   .63
                               =======      ========     ========     ========

   Diluted - as reported        $  .21       $   .16      $   .74      $   .65
                               =======      ========     ========     ========
   Diluted - pro forma          $  .19       $   .15      $   .70      $   .62
                               =======      ========     ========     ========

</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 Ended        Nine Months Ended

<CAPTION>
                                 Sept. 2,     Aug. 27,     Sept. 2,    Aug. 27,
                                   2005         2004         2005         2004
                                -----------  ----------   ---------   ----------
                                         In thousands, per share data
<S>                                <C>         <C>        <C>           <C>
Net income                         $7,715      $6,219     $27,628       $25,603

Weighted average common shares
  outstanding (basic)              36,292      37,467      36,158        38,508

Dilutive effect of stock options    1,104         692       1,030           803
                                   ------      ------      ------        ------

Weighted average common shares
  outstanding (diluted)            37,396      38,159      37,188        39,311
                                   ======      ======      ======        ======

Earnings per common share
   Basic                             $.21        $.17        $.76          $.66
                                   ======      ======      ======        ======

   Diluted                           $.21        $.16        $.74          $.65
                                   ======      ======      ======        ======
</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>
                                          Third Quarter       First Nine Months
                                        -------------------  ------------------
<CAPTION>
                                           2005       2004      2005      2004
                                        --------  ---------  --------  --------
                                                    (In thousands)
Options to purchase shares of common
<S>                                                  <C>           <C>   <C>
  stock                                       -      1,130         4     1,043

</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       Nine Months Ended
                                     ------------------       -----------------
                                   Sept. 2,      Aug. 27,    Sept. 2,   Aug. 27,
                                     2005         2004         2005       2004
                                  ----------   -----------  ---------- ---------
                                                   (In thousands)
<S>                                 <C>         <C>         <C>         <C>
Net income                          $7,715      $6,219      $27,628     $25,603

Other comprehensive income:
Foreign currency translation
adjustments                            201         131          376           2
                                   -------     -------      -------     -------

Total comprehensive income          $7,916      $6,350      $28,004     $25,605
                                   =======     =======      =======     =======
</TABLE>



<TABLE>
     Components  of  accumulated  other   comprehensive   loss  consist  of  the
following:

<CAPTION>
                                  September 2,      December 3,      August 27,
                                      2005             2004             2004
                                 ---------------  ----------------  ------------
                                                  (In thousands)
Foreign currency  translation
<S>                                    <C>             <C>               <C>
   adjustments                         $211            $(165)            $(215)
Minimum pension liability
   adjustments, net of taxes         (9,233)          (9,233)           (7,581)
                                   ---------        ---------         ---------
Accumulated other
   comprehensive loss               $(9,022)         $(9,398)          $(7,796)
                                   =========        =========          ========
</TABLE>


Note 4 - Intangible Assets and Goodwill

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

<CAPTION>
                               Intangible assets not subject to amortization
                               ------------------------------------------------
                                                  Trademark
                                  Goodwill         Rights           Total
-------------------------------------------------------------------------------
September 2, 2005                              (In thousands)
<S>                               <C>             <C>             <C>
  Gross carrying amount           $3,067          $2,980          $6,047
  Accumulated amortization        (2,159)         (1,290)         (3,449)
December 3, 2004
  Gross carrying amount           $3,067          $2,980          $6,047
  Accumulated amortization        (2,159)         (1,290)         (3,449)
August 27, 2004
  Gross carrying amount           $3,067          $2,980          $6,047
  Accumulated amortization        (2,159)         (1,290)         (3,449)

</TABLE>


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - Benefit Plans

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

<CAPTION>
                                  Three Months Ended         Nine Months Ended
                                ------------------------   ---------------------
                               Sept. 2,      Aug. 27,      Sept. 2,     Aug. 27,
                                 2005          2004          2005         2004
                              ------------  ----------   ----------  ----------
                                                 (In thousands)
<S>                               <C>           <C>        <C>         <C>
Service cost                      $506          $431       $1,566      $1,282
Interest cost                      943           886        2,853       2,692
Expected return on assets       (1,117)         (994)      (3,357)     (2,989)
Net loss recognized                476           428        1,486       1,156
Amortization of prior
service cost                         4             7           14          17
                                ------        ------       ------      ------

Net periodic benefit cost         $812          $758       $2,562      $2,158
                                ======        ======       ======      ======
</TABLE>


     During the first  quarter of fiscal  2005,  the  Company  contributed  $3.0
million to the Company's defined benefit pension plan. At this time, the Company
does not plan to make any further  contributions  to its defined benefit pension
plan during the 2005 fiscal year. The Company made $1.0 million in contributions
during the first nine months of fiscal 2004.

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. In early January 2004, the Company
finalized the terms of the license  agreement,  which will expire in March 2007.
The Company  expects to meet our  obligations  under the Tommy Hilfiger  license
agreement and  accordingly,  the Company believes that no provision is currently
required for costs related to the potential loss of this license. If the Company
loses the Tommy Hilfiger license, our business would be materially and adversely
affected.


Note 7 - Business Segments and Related Information

     During the second  quarter of fiscal 2005, the Company  determined  that it
had four reportable  segments.  Prior periods have been recast to conform to the
current presentation. The reportable segments are Stride Rite Children's Group -
Retail,  Stride Rite Children's Group - Wholesale,  Tommy Hilfiger  Footwear and
Other Wholesale  Footwear.  The Stride Rite Children's Group - Retail segment is
comprised of the retail  businesses  of the Stride Rite  Children's  Group which
encompass the children's retail shoe stores, the outlet


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 7 - Business Segments and Related Information - (Continued)

shoe  stores  and  the  e-commerce  site,  striderite.com.    The  Stride  Rite
Children's Group - Wholesale  segment designs and markets  children's  footwear,
primarily for consumers between the ages of six months and ten years,  including
dress and  recreation  shoes,  boots,  sandals and sneakers in  traditional  and
contemporary  styles.  These  products  are marketed  under our Stride  Rite(R),
Munchkin(R),  Sperry  Top-Sider(R),  Tommy Hilfiger(R) and Born(R) trademarks in
medium to high price ranges and under our Baby Smart (R)  trademark in medium to
lower price ranges.  The Tommy Hilfiger  Footwear  segment designs and markets a
line of dress  casual,  sport  casual and  athletic  footwear for men and women,
using the Tommy  Hilfiger(R),  and Tommy  Girl(R)  brand  names  under a license
agreement  with Tommy  Hilfiger  Licensing,  Inc. The  financial  results of the
PRO-Keds(R) trademark,  which is now licensed to a third party are also reported
in the Tommy Hilfiger segment. The Other Wholesale Footwear segment is comprised
of the three other operating segments of the Company, Keds, Sperry Top-Sider and
Stride  Rite  International,  which  have been  aggregated  into one  reportable
segment.  Keds designs and markets  sneakers and casual  footwear for adults and
children  under the Keds(R)  trademark  and casual  footwear for women under the
Grasshoppers(R)  label. Sperry Top-Sider designs and markets marine footwear and
outdoor recreational,  hand-sewn, dress and casual footwear for adults under the
Sperry  Top-Sider(R),   Sperry(R)  and  Mainsail(R)   trademarks.   Stride  Rite
International  distributes  all of the  Company's  product  lines  to  customers
outside of the United States.

     The Company has various costs related to shared corporate services, such as
warehousing, customer service, credit and collections, finance, human resources,
information  technology,  product sourcing,  executive and public company costs.
These costs are  allocated  to the  operating  segments  based on usage or other
statistical  measures  and  are  reflected  in  segment  operating  income.  The
accounting  policies  of the  segments  are the same as those  described  in the
summary of significant  accounting  policies.  The Company's reportable segments
are  based  on the way  management  organizes  the  segments  in  order  to make
operating  decisions and to assess  performance with the types of products sold.
The Company primarily  evaluates segment  performance based on segment operating
income.  Total  assets  are  disaggregated  to  the  extent  that  assets  apply
specifically to a single segment. Unallocated Corporate assets primarily consist
of cash and marketable securities, assets of the Company's distribution centers,
sourcing assets, deferred income taxes and information technology equipment.

     The Unallocated  Corporate component of operating income consists primarily
of pension  expense and certain other costs incurred in support of  company-wide
activities. Investment income, interest expense and other income and expense are
not allocated among the reportable business segments.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
For the three months ended September 2, 2005 and August 27, 2004:

<CAPTION>
              Stride      Stride
              Rite        Rite
              Children's  Children's  Tommy      Other      Un-allocated
Third         Group -     Group -     Hilfiger   Wholesale    Corporate  Consol-
Quarter 2005  Retail      Wholesale   Footwear   Footwear      & Other    idated
------------  ----------  ----------  ---------  ----------  ----------  -------
                                   (In thousands)

        Sales   $48,193     $29,169    $18,311     $53,386              $149,059

 Intercompany
        sales                    26      1,207       1,589                 2,822

 Net sales to
external
    customers    48,193      29,143     17,104      51,797               146,237



    Operating
<S>               <C>         <C>        <C>         <C>       <C>        <C>
       income     4,883       5,560      (434)       3,829     (2,784     11,054

 Interest and
   other, net                                                                695
                                                                             ---

 Income before
   income taxes                                                           11,749
                                                                          ======

 Total assets    41,802      59,359     19,790      79,810     139,881   340,642
</TABLE>


<TABLE>
<CAPTION>
              Stride       Stride
              Rite         Rite
              Children's   Children's  Tommy      Other      Un-allocated
Third         Group -      Group -     Hilfiger   Wholesale   Corporate  Consol-
Quarter 2004  Retail       Wholesale   Footwear   Footwear    & Other    idated
------------  ----------   ----------  ---------  ---------  ----------  -------
                                   (In thousands)

        Sales    $40,253     $30,871    $25,018    $47,045              $143,187

 Intercompany
        sales                     23        850      1,932                 2,805

 Net sales to
     external
    customers     40,253      30,848     24,168     45,113               140,382

    Operating
<S>                <C>         <C>          <C>      <C>       <C>         <C>
       income      1,961       5,978        295      2,837     (1,717)     9,354

 Interest and
   other, net                                                                134
                                                                             ---

 Income before
 income taxes                                                              9,488
                                                                           =====

 Total assets     40,278      64,232     29,447     65,855     130,459   330,271
</TABLE>


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
For the nine months ended September 2, 2005 and August 27, 2004:

<CAPTION>
              Stride      Stride
              Rite        Rite
              Children's  Children's  Tommy      Other      Un-allocated
Nine Months   Group -     Group -     Hilfiger   Wholesale   Corporate   Consol-
2005          Retail      Wholesale   Footwear   Footwear     & Other    idated
----          ----------  ----------  ---------  ---------  ----------  --------
                                   (In thousands)

        Sales  $129,615     $74,247    $61,255   $199,855               $464,972

 Intercompany
        sales                    77      3,001      5,425                  8,503

 Net sales to
     external
    customers   129,615      74,170     58,254    194,430                456,469



    Operating
<S>               <C>        <C>         <C>       <C>        <C>         <C>
       income     9,985      11,379      (983)     29,334     (7,397)     42,318

 Interest and
  other, net                                                               1,065
                                                                           -----

 Income before
 income taxes                                                             43,383
                                                                          ======

 Total assets    41,802      59,359     19,790     79,810     139,881    340,642
</TABLE>
<TABLE>

<CAPTION>
              Stride      Stride
              Rite        Rite
              Children's  Children's   Tommy     Other       Un-allocated
Nine Months   Group -     Group -      Hilfiger  Wholesale    Corporate  Consol-
2004          Retail      Wholesale    Footwear  Footwear     & Other    idated
----          ----------  -----------  --------  ----------  ----------  -------
                                   (In thousands)

        Sales  $112,493      $76,472   $73,905    $186,424              $449,294

 Intercompany
        sales                     70     2,129       5,570                 7,769

 Net sales to
     external
    customers   112,493       76,402    71,776     180,854               441,525

    Operating
<S>               <C>         <C>          <C>      <C>        <C>        <C>
       income     5,803       11,321       936      23,978     (2,098)    39,940

 Interest and
   other, net                                                                874
                                                                             ---

 Income before                                                            40,814
 income taxes                                                             ======

 Total assets    40,278       64,232    29,447      65,855     130,459   330,271
</TABLE>



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - Acquisition

     On September 16, 2005, the Company  completed the acquisition of all of the
outstanding Class A and Class B common shares of Saucony,  Inc.  ("Saucony") for
$23.00  per share in cash for a total  purchase  price of  approximately  $159.5
million not including Saucony's cash of approximately $37.0 million. The Company
also paid approximately  $12.1 million in settlement of all outstanding  Saucony
employee stock options.  The results of Saucony's operations will be included in
the consolidated financial statements after that date. Headquartered in Peabody,
Massachusetts,  Saucony is a  designer,  developer,  marketer  and  retailer  of
performance  oriented athletic  footwear,  athletic apparel and casual footwear.
The  acquisition  will be accounted for using the purchase  method in accordance
with Statement of Financial Accounting Standards No 141 "Business Combinations".

Note 9 - Credit Agreement

     On September 16, 2005, the Company  entered into a new credit  facility for
an  aggregate  amount  up to  $275.0  million,  with  $200.0  million  currently
committed  with a  group  of  nine  banks,  led by  Bank  of  America,  N.A.  as
Administrative  Agent.  The credit  agreement  expires  September 16, 2010.  The
facility  consists of a $200.0 million revolving credit facility (which replaced
an existing  $75.0 million  revolving  credit  facility).  The revolving  credit
facility,  which  was used in part to fund the  Saucony,  Inc.  acquisition,  is
available for working capital and general corporate purposes,  and also provides
for the  issuance  of  commercial  and  standby  letters of credit.  The Company
borrowed  $85.0  million from the credit  facility on September 16, 2005 to fund
the closing of the Saucony acquisition.

     Under the revolving credit  facility,  interest rates and facility fees are
determined  according to a pricing grid providing a margin rate over LIBOR or an
alternate  base rate (the higher of the Federal Funds Rate plus 1/2% or the Bank
of America prime rate).  The  applicable  fees and margins are determined by the
Company's   leverage  ratio  which  is  defined  as  consolidated  total  funded
indebtedness to consolidated earnings before interest,  taxes,  depreciation and
amortization ("EBITDA").

     Deferred  financing  costs  incurred  of $1.8  million  related to the $200
million  credit  facility  were  capitalized  and are being  amortized  over the
expected life of the  agreement.  These costs are included in other  non-current
assets on the balance sheet.

     The  present  and  future  domestic  subsidiaries  of the  Company  and the
material foreign subsidiaries have agreed to guarantee the obligations under the
credit agreement.  All domestic  subsidiaries of the Company have entered into a
guaranty  agreement,  dated September 16, 2005,  with Bank of America,  N.A., as
administrative agent.

     In  addition,  the credit  agreement  requires  the  Company to  maintain a
consolidated tangible net worth in excess of a specified amount that is


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


adjusted  in  accordance  with   the  Company's  consolidated  net  income  and
restricted  payments.  The credit  agreement  also  requires the Company to meet
specified ratio requirements with respect to leverage (debt to EBITDA) and fixed
charge coverage,  and restricts the making of capital  expenditures.  The credit
agreement  also  contains  negative  covenants  limiting,  among  other  things,
indebtedness,  liens, investments (including acquisitions),  fundamental changes
and restricted  payments  (including  repurchasing the Company's common stock or
declaring cash dividends in respect thereof).

Refer to the Form 8-K filed by the Company with the  Securities  and Exchange
Commission on September 22, 2005 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

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:  the inability to fully
realize the anticipated benefits from the acquisition of Saucony, the challenges
of achieving the expected  synergies with Saucony,  the possibility of incurring
costs or  difficulties  related to the  integration  of the businesses of Stride
Rite and Saucony;  the possible  failure to retain the Tommy  Hilfiger  footwear
license;   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;  unseasonable  weather;  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 ability to secure
and protect


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

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 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;  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 2004.
Those trends and factors  continue to be relevant to the  Company's  performance
and financial condition.

Critical Accounting Policies and Estimates
------------------------------------------

     The  preparation  of  financial   statements  and  related  disclosures  in
conformity with generally  accepted  accounting  principles 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 policies
and estimates in the  Company's  Annual Report on Form 10--K for the fiscal year
ended December 3, 2004 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.  In early  January  2004,  we
finalized the terms of the license  agreement,  which will expire in March 2007.
Whether our license  with Tommy  Hilfiger  will remain in effect  depends on our
achieving certain minimum sales levels for the licensed  products.  We expect to
continue to meet the minimum sales levels required by the Tommy Hilfiger license
agreement.  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 third
quarter  and first nine months of fiscal 2005 as compared to the results for the
same periods in fiscal 2004:

<TABLE>
Increase Percent vs. 2004 Results:
----------------------------------
<CAPTION>
                                            Third Quarter      Nine Months
                                            -------------      -----------

<S>                                                    <C>               <C>
 Net sales                                             4.2%              3.4%
 Gross profit                                         13.7%              9.7%
 Selling and administrative expenses                  12.7%             10.8%
 Operating income                                     18.2%              6.0%
 Income before income taxes                           24.0%              6.3%
 Net income                                           24.1%              7.9%
</TABLE>


<TABLE>
Operating Ratios as a Percent of Net Sales:
-------------------------------------------
<CAPTION>
                                         Third Quarter       Nine Months
                                       --------------------------------------
                                         2005       2004    2005       2004
                                       ---------  --------  --------  --------

<S>                                       <C>       <C>       <C>      <C>
 Gross profit                             39.8%     36.5%     40.3%    38.0%
 Selling and administrative expenses      32.2%     29.8%     31.0%    28.9%
 Operating income                          7.6%      6.7%      9.3%     9.0%
 Income before income taxes                8.0%      6.8%      9.5%     9.2%
 Net income                                5.3%      4.4%      6.1%     5.8%
</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

Net Sales
---------

<TABLE>
      The third quarter breakdown of net sales is as follows:
                                                                  Percent
                                                                  Change
                                                                 2005 vs.
<CAPTION>
                                             2005       2004       2004
                                           ---------  ---------  ----------
(In millions, except percentages)
<S>                                         <C>        <C>         <C>
Stride Rite Children's Group - Wholesale    $29.2      $30.9       (5.5)%
Stride Rite Children's Group - Retail        48.2       40.3       19.7%
                                           ---------  ---------  ----------
Stride Rite Children's Group                 77.4       71.2        8.8%

Keds                                         25.1       27.6       (8.9%)
Tommy Hilfiger Footwear                      18.3       25.0      (26.8)%
Sperry Top-Sider                             18.0       11.8       52.8%
Stride Rite International                    10.2        7.7       33.2%
Elimination of intercompany sales            (2.8)      (2.9)       n/a
                                           ---------  ---------  ----------
Total net sales                            $146.2     $140.4        4.2%
                                           =========  =========  ==========
</TABLE>

     During the third quarter of fiscal 2005,  consolidated  net sales increased
$5.9 million to $146.2  million,  or 4.2% above the sales level  achieved in the
third quarter of fiscal 2004.  Wholesale net sales  decreased 2.0% for the third
quarter  of 2005,  and  overall  retail  sales,  including  Keds  retail and the
e-commerce  sites,  increased  $7.8  million or 19.0% when  compared to the same
period in the prior year.  Unit shipments of first quality  merchandise  for the
wholesale  brands during the third  quarter were 5.6% lower than the  comparable
period in 2004.  The Company's  average first  quality  wholesale  selling price
increased 0.3% from the third quarter of 2004.

     First quality wholesale net sales decreased by $3.7 million,  or 4.7% below
the wholesale net sales level achieved in the third quarter of fiscal 2004. This
includes the positive impact of a $0.8 million  decrease in combined  discounts,
returns  and  allowances.   Closeout  sales  increased  $1.3  million  from  the
comparable period in the 2004 fiscal year while sales from promotional  products
were increased $0.1 million.  Although the increase in closeout sales negatively
impacted the product  mix,  the higher  gross  profit rate on the third  quarter
closeout sales neutralized the comparative gross profit impact. Offsetting these
wholesale  sales  declines was a $0.4 million  increase in royalties  and a $7.8
million  increase  in retail  store  sales from the same  period in 2004,  which
resulted in an overall increase of $5.9 million in consolidated net 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

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

     During the third  quarter of fiscal  2005,  the  Company's  gross profit of
$58.2 million  increased $7.0 million or 13.7% above the amount  recorded during
fiscal 2004's third quarter. The higher sales and increased gross profit rate on
retail  sales,  as well as a decrease in discounts  and  allowances on wholesale
sale versus the  comparable  period in fiscal 2004, led to the increase in gross
profit dollars for the period.  The gross profit  percentage rate for the fiscal
2005 third quarter  improved 3.3  percentage  points to 39.8%,  versus the 36.5%
rate  achieved  in the prior  year's  third  quarter.  The higher  gross  profit
percentage was largely attributable to the increased retail sales, as well as an
increased  gross profit rate on the third  quarter  retail  sales.  In addition,
fewer markdown allowances,  predominantly in Keds, contributed positively to the
improved gross profit rate.

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

     During  the  third  quarter  of fiscal  2005,  selling  and  administrative
expenses were $47.1 million, an increase of $5.3 million or 12.7% as compared to
the third  quarter of fiscal 2004. As a percent of sales,  operating  costs were
32.2% in the third quarter of fiscal 2005 compared to 29.8% in the third quarter
of fiscal 2004. This increase was  principally the result of higher  advertising
costs,  which  were 6.2% of net sales  during the third  quarter of fiscal  2005
versus 4.5% in fiscal 2004, with Keds and Sperry  Top-Sider  driving most of the
increase.  Also  contributing  to the higher  expense  levels in the fiscal 2005
third quarter were the $1.4 million in added costs associated with the increased
number of Stride Rite Children's Group retail stores and approximately  $450,000
of costs related to the estimated losses due to Hurricane Katrina.

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

     Other  income  (expense)  increased  pre-tax  income by $0.7 million in the
third  quarter of fiscal 2005 versus $0.1 million in the third quarter of fiscal
2004. Investment income related to the Company's cash equivalents and marketable
securities  was $0.4  million  in the third  quarter of fiscal  2005,  which was
increased  $0.1 million  versus the similar  period in fiscal  2004.  The higher
average  interest  rates in the third  quarter of fiscal  2005  combined  with a
higher average amount of investments  led to the increase in investment  income.
Interest  expense  remained flat in the third quarter of fiscal 2005 as compared
to the third quarter of fiscal 2004 as no short-term borrowings were made during
the third quarters of either year.

     The provision for income taxes  increased $0.8 million in the third quarter
of fiscal 2005 as compared to the similar  period in fiscal 2004.  This increase
was due to the higher pre-tax income amount. Our effective tax rate was 34.3% in
the third  quarter of fiscal 2005 as  compared to 34.4% in the third  quarter of
fiscal 2004. In both the third quarters of fiscal 2005 and 2004 the tax rate was
reduced due to the adjusting of certain tax reserves  established in prior years
that were no longer required.



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

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

     Net  income  for the third  quarter  of fiscal  2005 was $7.7  million,  an
increase of $1.5  million,  or 24.1% as compared to the same period in the prior
year.  The higher net sales and  increased  gross profit  percentage  led to the
favorable  comparison  to the third quarter of fiscal 2004.  This was,  however,
offset by higher  operating  costs. The Company's return on net sales of 5.3% in
the third  quarter of fiscal 2005 was an  improvement  versus the 4.4% return on
sales recorded for the third quarter of fiscal 2004.

Segments Review
---------------

Stride Rite Children's Group - Retail
-------------------------------------

     The net sales of the Stride Rite Children's  Group - Retail increased 19.7%
in the third quarter as compared to the same quarter in the prior year. Sales at
comparable  Children's  Group  retail  stores  (stores open for 52 weeks in each
fiscal year)  increased 7.4% for the third fiscal quarter of 2005.  Driving this
increase in the  comparable  stores  category was the new "Baby Stages"  product
launch in specialty  stores, as well as improved  inventory  selection in outlet
stores and a change in the timing of a  promotional  event versus last year.  At
the end of the third quarter of fiscal 2005, the Stride Rite Children's  Group -
Retail operated 264 stores.  This is a net increase of 21 stores, or 9% from the
end of the same period in the prior year.  Current plans call for the opening of
approximately  24 retail stores and the closing of 3  underperforming  locations
during the 2005 fiscal year. During the third quarter of 2005 the Company opened
7 new stores and closed 2 underperforming locations.

     The Stride Rite Children's Group - Retail operating income increased due to
higher  sales and an improved  gross  profit  percentage  versus the prior year.
Offsetting the increased  profit were higher store  operating costs in the third
quarter of fiscal 2005,  primarily  related to the additional stores and certain
increased indirect store costs.

Stride Rite Children's Group - Wholesale
----------------------------------------

     Sales  decreased  5.5% during the third  quarter of 2005 as compared to the
same quarter last year.  This decrease was primarily  attributable  to decreased
sales of first  quality  products,  mainly in the Tommy  Hilfiger  and  Munchkin
product lines, as well as a decrease in closeout products 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

     The Stride Rite  Children's  Group -  Wholesale  operating  income  decline
versus the prior year was primarily  related to the impact of the lower sales in
fiscal 2005 compared to 2004. A higher gross profit rate in the third quarter of
fiscal 2005 was offset by slightly  higher  operating  expenses  versus the same
period last year.


Tommy Hilfiger Footwear, Inc.
-----------------------------

     The decrease in sales of Tommy Hilfiger  footwear products during the third
quarter of fiscal 2005 was primarily  attributable to a significant reduction in
the men's business across all channels of  distribution  and a downward trend in
women's and  department  stores.  The licensing of the PRO-Keds brand to a third
party in fiscal 2005 resulted in $0.8 million of the decrease in the  comparison
to the prior  year's  Tommy  Hilfiger  net sales.  Starting  in fiscal  2005 the
Company began licensing the PRO-Keds trademark to an independent third party and
Tommy  Hilfiger  Footwear  receives a royalty  instead of marketing  and selling
PRO-Keds products directly.  This change negatively impacts sales comparisons to
the prior year.  In addition,  the Tommy "H" product line was  discontinued  and
this  represented  $1.4 million of the sales  decline  comparing  the 2005 third
quarter versus last year.

     The Tommy Hilfiger operating income decline versus prior year was primarily
related  to the  effect of the  lower  sales in fiscal  2005  compared  to 2004.
Operating  expenses,  although  reduced in the third  quarter of 2005 versus the
prior year, could not fully offset the gross profit impact of the lower sales.


Other Wholesale Footwear
------------------------

     The increase in sales of the Other Wholesale Footwear segment was primarily
attributable to the increase in sales of the Sperry Top-Sider  product line. The
Sperry Top-Sider increase was largely attributable to strong sales of men's boat
shoes and the overall women's product line. The significant growth in the Sperry
Top-Sider  men's product  sales in 2005  resulted from  increases in the premium
department store,  family shoe store and outdoor channels.  The women's business
had expanded retail distribution in the better department store, independent and
outdoor  channels,  which  resulted in increased  sales of boat shoes,  nautical
casuals and canvas.  The Keds sales decline versus last year was in the moderate
and value retail sales channels.  The Stride Rite  International  division's net
sales growth in the third quarter of fiscal 2005 was also a contributing  factor
to the increase in sales of the Other Wholesale  Footwear segment.  This was the
result of strong  sales of Tommy  Hilfiger in Latin  America,  Keds  footwear in
Europe and Asia, and Sperry Top-Sider in Europe and South Africa.  Overall,  the
Keds product line sales  decline  offset a portion of the Sperry  Top-Sider  and
Stride Rite International sales increases.



<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  increased  operating  income  versus  prior year in this  segment  was
primarily  the result of Sperry  Top-Sider's  increased  sales and Keds improved
gross profit percentage  performance due to significantly  fewer closeout sales,
discounts  and  allowances.  Increased  Keds and  Sperry  Top-Sider  advertising
spending in the third quarter was the most  significant  factor  contributing to
the higher operating expenses.

First Nine Months of 2005 Compared to the First Nine Months of 2004
-------------------------------------------------------------------

Net Sales
---------

<TABLE>
The first nine months breakdown of net sales is as follows:
                                                                     Percent
                                                                     Change
                                                                     2005 vs.
<CAPTION>
                                               2005        2004        2004
                                               ----        ----     ----------
(In millions, except percentages)
<S>                                            <C>         <C>         <C>
Stride Rite Children's Group - Wholesale       $74.3       $76.5       (2.9)%
Stride Rite Children's Group - Retail          129.6       112.5       15.2%
                                              ------     -------       ----
Stride Rite Children's Group                   203.9       189.0        7.9%

Keds                                           112.4       118.7       (5.3)%
Tommy Hilfiger Footwear                         60.6        73.9      (17.1)%
Sperry Top-Sider                                61.2        46.3       31.0%
Stride Rite International                       26.9        21.4       25.4%
Elimination of intercompany sales               (8.5)      (7.8)        n/a
                                             --------    -------        ---

Total net sales                               $456.5     $441.5        3.4%
                                              ======     ======        ===
</TABLE>

     During  the  first  nine  months  of fiscal  2005,  consolidated  net sales
increased  $14.9  million  to $456.5  million,  or 3.4%  above  the sales  level
recorded in the first nine months of fiscal 2004.  Wholesale net sales were down
0.6% for the first nine months of 2005,  while  overall  retail sales  increased
$17.0  million  or 14.8%  when  compared  to the same  period  last  year.  Unit
shipments of first quality merchandise for the wholesale brands during the first
nine months of 2005 were down  slightly from last year.  The  Company's  average
first quality  wholesale selling price increased 1.6% from the first nine months
of 2004.

     First quality wholesale net sales increased by $4.3 million,  or 1.6% above
the wholesale net sales level  achieved in the first nine months of fiscal 2004.
This  includes  the  positive  impact of a $6.7  million  decrease  in  combined
discounts,  returns and allowances.  In addition,  closeout sales decreased $7.4
million or 19.5% below the same period in 2004.  An increase in royalty  revenue
of $1.1 million and a $17.0 million  increase in retail store sales  resulted in
an overall  increase of $14.9 million in consolidated  sales, as compared to the
first nine months of fiscal 2004.



<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 first nine months of fiscal 2005, the Company's  gross profit of
$183.9 million  increased $16.2 million or 9.7% above the amount recorded during
the same period last year. The gross profit  percentage  rate for the first nine
months of fiscal 2005 improved 2.3 percentage points to 40.3% as compared to the
38.0% rate achieved in the same period last year. The increase in the first nine
months gross profit was primarily the result of the higher level of retail sales
during the period along with a reduction in markdown allowances and returns. The
improvement in the gross profit percentage versus last year was due primarily to
the reduction in closeout sales and fewer returns and allowances, as well as the
overall increase in retail sales.

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

     Operating  expenses  for the first nine  months of fiscal  2005 were $141.6
million, an increase of $13.9 million or 10.8% as compared to the same period in
fiscal 2004. As a percent of sales, operating costs were 31.0% in the first nine
months of fiscal 2005 versus 28.9% in the first nine months of last year. During
the first nine months of fiscal 2005,  advertising  expenses as a percent of net
sales were 5.9% versus  4.9% in the same  period last year,  an increase of $5.5
million.  Advertising  spending  increased  primarily  in the  Keds  and  Sperry
Top-Sider  brands. In addition to the higher level of advertising  costs,  there
were $3.7 million of increased costs related to retail store expansion,  as well
as certain other headcount related costs.

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

     Other  income  (expense)  increased  pre-tax  income by $1.1 million in the
first nine months of fiscal 2005 and by $0.9 million in the first nine months of
fiscal 2004.  Investment income in the first nine months of fiscal 2005 was $0.2
million below the same period of fiscal 2004. Higher average interest rates were
not  sufficient to offset lower  average  investments.  Interest  expense in the
first nine  months of fiscal  2005 was flat with the level  recorded  last year.
There were no  short-term  borrowings  during  the first  nine  months of either
fiscal 2005 or 2004.

     The  provision  for income taxes  increased  $0.5 million in the first nine
months of fiscal 2005 as compared to the  similar  period in fiscal  2004.  This
increase was due to the higher pre-tax income amount. Our effective tax rate was
36.3% for the first nine months of fiscal 2005 as compared to 37.3% in the first
nine  months of fiscal  2004.  The  lower tax rate in the first  nine  months of
fiscal 2005 versus the first nine months in fiscal  2004  related  primarily  to
certain tax reserves established in prior years that were no longer required.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

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

     Net income for the first nine months of fiscal 2005 was $27.6  million,  an
increase  of $2.0  million,  or 7.9% above that of the same  period in the prior
year. Increased net sales and the resulting  improvement in gross profit dollars
were  offset  by higher  operating  expenses.  The  increased  operating  income
combined with our lower effective income tax rate and led to the increase in net
income  during the first nine  months of fiscal 2005 versus the same period last
year. The Company's  return on net sales of 6.1% in the first fiscal nine months
of 2005 was up from 5.8% when compared to the same period last year.


Segments Review
---------------

Stride Rite Children's Group - Retail
-------------------------------------

     Sales of the  Children's  Group - Retail  company-owned  stores,  increased
15.2%  during the first nine  months of fiscal  2005 versus the same period last
year.  Sales at comparable  Children's  Group retail stores  (stores open for 52
weeks in each fiscal  year)  increased  5.5% for the first nine months of fiscal
2005. A major reason for the increase in the comparable  store sales results was
the new "Baby  Stages"  product  launch in specialty  stores as well as improved
inventory  selection in outlet stores. The Stride Rite Children's Group - Retail
operating  income  increase  versus the prior year was primarily  related to the
impact of the  higher  2005  sales.  During  the first  nine  months of 2005 the
Company  opened 16 new stores and closed 3  underperforming  locations for a net
increase of 13 stores.  In  addition,  the  Children's  Group - Retail  division
converted 2 former Shoe Buzz stores to outlet stores.  Store operating costs and
indirect  store costs  increased at a greater  rate than sales when  compared to
last year.  This  increase  in costs  related to the  greater  number of stores,
certain  management  support costs and the  depreciation  expense related to our
upgrade of information technology.  There was also a one-time non-cash charge of
$0.4  million  to conform  the  Company's  accounting  policies  with  generally
accepted accounting principles related to the timing of rent expense for certain
retail store locations.


Stride Rite Children's Group - Wholesale
----------------------------------------

     Sales  decreased  2.9% during the first nine months of 2005 versus the same
period last year.  The decrease in sales in the first nine months of fiscal 2005
versus  the same  period in the prior year was  principally  the result of lower
sales in the Tommy Kids and  Munchkin  product  lines,  as well as a decrease in
sales of  closeouts.  Partially  offsetting  these  declines  were  increases in
department store sales as well as a decrease in returns.



<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 Stride Rite Children's  Group - Wholesale's  operating  income was flat
compared to prior year as reduced direct operating costs offset the gross profit
impact of lower sales in fiscal 2005 versus 2004. In addition,  the gross profit
percentage for the first nine months of fiscal 2005 was slightly higher than for
the same period in the prior year.


Tommy Hilfiger Footwear
-----------------------

     The decrease in the Tommy Hilfiger Footwear unit's sales performance during
the first nine months of fiscal 2005 was primarily  attributable to a decline in
the men's product line.  The Tommy  Hilfiger  men's and women's sales during the
first nine months of fiscal 2005 were below the sales level when compared to the
same period in the prior  year.  The  PRO-Keds  brand  licensing  in fiscal 2005
contributed  to $2.9 million of the decrease in Tommy Hilfiger net sales for the
first nine months of fiscal 2005.  Beginning in fiscal 2005, the Company started
licensing  the  PRO-Keds  trademark  to an  independent  third party  instead of
marketing and selling the products directly. This change has negatively impacted
sales  comparisons  to the prior year. The  discontinued  Tommy "H" product line
represented $0.6 million of the 2005 nine months sales decline versus 2004.

     The Tommy  Hilfiger  operating  income  decline  versus  the prior year was
primarily  related to the lower  sales in fiscal  2005  compared to 2004 and the
impact of a weaker gross profit  percentage in 2005 versus 2004. Lower operating
expenses in the period  could not fully  offset the profit  impact of  decreased
sales.


Other Wholesale Footwear
------------------------

     Sales of the Other Wholesale  Footwear segment for the first nine months of
fiscal 2005 were above the levels  achieved in the prior year  primarily  due to
the strong performance of Sperry Top-Sider and Stride Rite International.  Sales
of Sperry Top-Sider products increased $14.3 million or 31.0% for the first nine
months of fiscal  2005.  This  increase  was  primarily  the  result of a strong
performance by the women's  product line.  Adding to this were continued  strong
sales of the men's  product line  primarily  with the boat shoe and  performance
boat shoe product categories. The Stride Rite International division had a 25.4%
increase in net sales for the first nine months of 2005,  versus the same period
in the prior  year.  Increased  sales of Tommy  Hilfiger  in  Central  and South
America,  as well as Keds and Sperry  Top-Sider  products  in Canada and Europe,
were the major reasons for the increase.

     These  sales gains were  partially  offset by the  performance  of the Keds
product line.  Keds sales  decreased in the first nine months of fiscal 2005 due
primarily to the strategic  repositioning  of the Keds brand as a  higher-priced
product line with improved styling.  This resulted in solid sales to the premium
retail channel, but reduced sales to moderate and value channel


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

retailers.  Sales  of  both  Grasshoppers  and  Keds children's products,  which
are included in the Keds results,  were also down as compared to the same period
last year. Solid performances of the Champion(R) and  Microstretch(TM)  products
as well as a decrease in returns and  allowances  were offset by fewer  closeout
and sandal product sales compared to last year.

     The increased  operating income within the Other Wholesale Footwear segment
was primarily the positive  result of both the higher sales of Sperry  Top-Sider
and Stride Rite  International and the increased gross profit percentage rate in
fiscal 2005 versus 2004.  The improved gross profit  percentage was  principally
due to  Keds  overall  higher  average  selling  prices,  improved  returns  and
allowances performance and increased royalty income. This was somewhat offset by
increased advertising spending in both Keds and Sperry Top-Sider.

Liquidity and Capital Resources
-------------------------------

     At the end of the third fiscal quarter of 2005, our balance sheet reflected
a  current  ratio of 5.0 to 1 with no  debt.  Our  cash,  cash  equivalents  and
marketable securities totaled $92.3 million at September 2, 2005, an increase of
$7.4 million from the total cash, cash equivalents and marketable  securities of
$84.9  million  at the end of the third  quarter  of fiscal  2004.  The  Company
maintained a $75 million  revolving credit facility to fund any seasonal working
capital needs. This revolving credit facility was replaced on September 16, 2005
by a new five year $200 million  revolving credit facility.  No borrowings under
this line of credit were outstanding as of September 2, 2005 or August 27, 2004.
On September  16,2005,  the Company  borrowed $85.0 million under the new credit
facility.

     During the first nine months of fiscal 2005,  the Company  generated  $13.3
million of cash from operating activities,  a decrease from the $20.5 million of
cash from  operations  during the first nine  months of fiscal  2004.  Inventory
levels at the end of the third quarter of fiscal 2005 increased $5.6 million, or
6.9% from the levels recorded at the end of the prior year's third quarter.  The
increase in  inventory  related  primarily  to the  increased  levels of in-line
products  and the  higher  number  of  retail  stores.  Accounts  receivable  at
September 2, 2005 were $0.4 million or 0.6% higher than the amount at the end of
last year's third quarter.  Days sales outstanding  ("DSO"),  which measures the
length of the collection period for accounts receivable,  was 40 days at the end
of the third fiscal  quarter of 2005 and was improved  compared to the DSO of 43
days at the end of the same period last year.  Accounts  payable,  at the end of
the third quarter of fiscal 2005, decreased $4.6 million from the level recorded
at the end of the prior year's third  quarter.  This  decrease was primarily the
result of the timing of vendor and duty related payments.  During the first nine
months of 2005, the Company also contributed $3.0 million to its defined benefit
pension plan. The Company does not plan to make any further contributions to its
defined benefit pension plan during the 2005 fiscal year.

     Additions to property and equipment  totaled $6.4 million in the first nine
months of 2005,  an  increase  compared  to the $5.8  million  in the first nine
months of 2004. The increase in capital purchases compared to the same period in
fiscal 2004 related  primarily to the continued retail expansion  efforts during
the first nine months of fiscal 2005. Funding of our capital
<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

expenditures  was  provided  from  internal  sources  by  the  Company's  $200
million  revolving credit facility.  We expect that all capital purchases during
the fourth quarter of fiscal 2005 will be provided for.

     During the first nine months of fiscal 2005 we  returned  $13.5  million to
shareholders through share repurchases and cash dividends. We spent $7.8 million
to repurchase  587,800 common shares under our share repurchase  program.  As of
September 2, 2005, we have  approximately  3.9 million  shares  remaining on our
share  repurchase  authorization.  We  expect to  continue  to  purchase  shares
opportunistically through the remainder of the fiscal year.

     At the end of the third  quarter of fiscal 2005,  there were no  borrowings
outstanding under the Company's then $75 million revolving credit facility. This
is  consistent  with the third  quarter of fiscal  2004.  We did not utilize any
available credit under the revolving credit line during the first nine months of
fiscal 2005.  Borrowings were not required during this time primarily because we
entered the year with no outstanding debt and significant cash, cash equivalents
and marketable  securities balances.  As of September 2, 2005, letters of credit
totaling $24.5 million were  outstanding  for the purchase of  inventories.  The
issuance  of  letters  of credit  for  inventory  purchases  does not impact the
Company's  borrowing  capacity  under the revolving line of credit because these
letters of credit  are  supported  by other  uncommitted  lines of  credit.  All
letters of credit generally expire within one year.

     On September 16, 2005, the Company  completed the acquisition of all of the
outstanding Class A and Class B common shares of Saucony,  Inc.  ("Saucony") for
$23.00  per share in cash for a total  purchase  price of  approximately  $159.5
million not including Saucony's cash of approximately $37.0 million. The Company
also paid approximately  $12.1 million in settlement of all outstanding  Saucony
employee stock options.  The results of Saucony's operations will be included in
the consolidated financial statements after that date. Headquartered in Peabody,
Massachusetts,  Saucony is a  designer,  developer,  marketer  and  retailer  of
performance  oriented athletic  footwear,  athletic apparel and casual footwear.
The  acquisition  will be accounted for using the purchase  method in accordance
with Statement of Financial Accounting Standards No 141 "Business Combinations".

     Also on September 16, 2005, the Company  entered into a new credit facility
for an aggregate  amount up to $275.0  million,  with $200.0  million  currently
committed  with a  group  of  nine  banks,  led by  Bank  of  America,  N.A.  as
Administrative  Agent.  The credit  agreement  expires  September 16, 2010.  The
facility  consists of a $200.0 million revolving credit facility (which replaced
an existing  $75.0 million  revolving  credit  facility).  The revolving  credit
facility,  which  was used in part to fund the  Saucony,  Inc.  acquisition,  is
available for working capital and general corporate purposes,  and also provides
for the  issuance  of  commercial  and  standby  letters of credit.  The Company
borrowed  $85.0  million from the credit  facility on September 16, 2005 to fund
the closing of the Saucony acquisition.



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

     Under the revolving credit  facility,  interest rates and facility fees are
determined  according to a pricing grid providing a margin rate over LIBOR or an
alternate  base rate (the higher of the Federal Funds Rate plus 1/2% or the Bank
of America prime rate).  The  applicable  fees and margins are determined by the
Company's   leverage  ratio  which  is  defined  as  consolidated  total  funded
indebtedness to consolidated earnings before interest,  taxes,  depreciation and
amortization ("EBITDA").

     The  present  and  future  domestic  subsidiaries  of the  Company  and the
material foreign subsidiaries have agreed to guarantee the obligations under the
credit agreement.  All domestic  subsidiaries of the Company have entered into a
guaranty  agreement,  dated  September 16, 2005,  with Bank of America,  N.A. as
administrative agent.

     In  addition,  the credit  agreement  requires  the  Company to  maintain a
consolidated tangible net worth in excess of a specified amount that is adjusted
in  accordance  with  the  Company's  consolidated  net  income  and  restricted
payments. The credit agreement also requires the Company to meet specified ratio
requirements  with  respect  to  leverage  (debt to  EBITDA)  and  fixed  charge
coverage, and restricts the making of capital expenditures. The credit agreement
also contains negative  covenants  limiting,  among other things,  indebtedness,
liens, investments (including acquisitions),  fundamental changes and restricted
payments  (including  repurchasing  the Company's common stock or declaring cash
dividends in respect  thereof).  Refer to the Form 8-K filed by the Company with
the  Securities  and Exchange  Commission on September  22, 2005 for  additional
information.  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.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There  have  been no  material  changes  from  the  information  previously
reported  under  Item 7A of the  Company's  Annual  Report  on Form 10-K for the
fiscal year ended December 3, 2004.

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 of and with the  participation  of the
Company's management, including the participation of its 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 Rule 13a-15 of the
Securities Exchange Act of 1934, as amended.  Based upon that evaluation,  as of
the end of the period covered by this report,  our Chief  Executive  Officer and
Chief  Financial  Officer  have  concluded  that  our  disclosure  controls  and
procedures  (as  defined in Rules  13a-15(e)  and  15d-15(e)  of the  Securities
Exchange  Act of 1934,  as amended)  are  effective  to ensure that  information
required  to be  disclosed  by the  Company in reports  that it files or submits
under the Securities Exchange Act of 1934, as amended,  is recorded,  processed,
summarized  and reported  within the time periods  specified in  Securities  and
Exchange  Commission  rules and forms.  We continue to review and  document  our
disclosure  controls and procedures and may from time to time make changes aimed
at enhancing their  effectiveness  and ensuring that our systems evolve with our
business.

(b) Changes in internal controls over financial reporting.

     There  was no change  in the  Company's  internal  control  over  financial
reporting  (as  defined  in Rules  13a-15(f)  and  15d-15(f)  of the  Securities
Exchange Act of 1934, as amended)  during our third quarter that has  materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.


<PAGE>


PART II - OTHER INFORMATION

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

<TABLE>
      Our repurchases of equity securities for the third quarter of fiscal 2005
were as follows:

                                                          Total
                                                          Number of  Maximum
                                                          Shares     Number
                                                          Purchased  of Shares
                                      Total       Average As Part    that May
                                      Number      Price   of         Yet Be
                                      Of          Paid    Publicly   Purchased
                                      Shares      Per     Announced  Under the
<CAPTION>
Period                                Purchased   Share   Plan       Plan
--------------------------------------------------------------------------------

June 4, 2005 - July 1, 2005                  -         -          -  4,057,494

<S>                                     <C>      <C>        <C>     <C>
July 2, 2005 - August 5, 2005            47,700   $13.43     47,700  4,009,794

August 6, 2005 - September 2, 2005      102,800   $13.34    102,800  3,906,994
</TABLE>

     In June 2004, the Board of Directors  increased the authorization  under an
existing  stock   repurchase   program  by  five  million   shares.   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)

                           THE STRIDE RITE CORPORATION

ITEM 6.     EXHIBITS


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

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

                3(i)                 Restated Articles of Organization of the
                                     Registrant with amendments thereto through
                                     November 28, 1986, incorporated by
                                     reference from Exhibit 4(i) to the
                                     Registrant's Form S-8 filed on October 25,
                                     1996.

                3(ii)                Articles of Amendment dated April 7, 1987
                                     to Restated Articles of Organization,
                                     incorporated by reference form Exhibit 4(i)
                                     to the Registrant's Form S-8 filed on
                                     October 25, 1996.

                3(iii)               Articles of Amendment dated December 16,
                                     1987 to Restated Articles of Organization
                                     of the Registrant, incorporated by
                                     reference from Exhibit 4(i) to the
                                     Registrant's Form S-8 filed on October 25,
                                     1996.

                3(iv)                Articles of Amendment dated December 3,
                                     1991 to the Restated Articles of
                                     Organization of the Registrant,
                                     incorporated by reference from Exhibit 4(i)
                                     to the Registrant's Form S-8 filed on
                                     October 25, 1996.

                3(v)                 Certificate of Vote of Directors
                                     establishing a series of a Class of Stock
                                     dated as of June 18, 1997.

                3(vi)                By-laws of the Registrant, as amended. This
                                     document was filed as Exhibit 3 of the
                                     Registrant's Form 10-Q for the fiscal
                                     period ended June 1, 1990 and is
                                     incorporated herein by reference.

                4(i)                 Reference is made to Exhibits 3(i), (ii),
                                     (iii) and (iv) referred to above, which are
                                     expressly incorporated herein by reference.


<PAGE>



         PART II - OTHER INFORMATION (continued)

                            THE STRIDE RITE CORPORATION

         ITEM 6.     EXHIBITS

                10.1                 Credit Agreement, dated September 16, 2005,
                                     among The Stride Rite Corporation, Stride
                                     Rite Children's Group,, Inc., Bank of
                                     America, N.A., as Administrative Agent and
                                     Swing Line Lender, the other lenders from
                                     time to time party thereto, The Bank of New
                                     York and Sun Trust Bank, as Co-Syndications
                                     Agents, and Citizens Bank of Massachusetts,
                                     as Documentation Agent and Banc of America
                                     Securities, LLC, as Sole Lead Arranger and
                                     Sole Book Manager. This document was filed
                                     as Exhibit 10.1 to the registrant's Form
                                     8-K filed on September 22, 2005 and is
                                     incorporated herein by reference.

                10.2                 Guaranty Agreement dated September 16, 2005
                                     by and among The Stride Rite Corporation,
                                     Stride Rite Children's Group, Inc. the
                                     other borrowers listed therein, the lenders
                                     from time to time party thereto, and Bank
                                     of America, N.A., as Administrative Agent.
                                     This document was filed as Exhibit 10.2 to
                                     the registrant's Form 8-K filed on
                                     September 22, 2005 and is incorporated
                                     herein by reference.

                31.1*                Certification of Principal Executive
                                     Officer pursuant to Exchange Act Rules
                                     13a-14 and 15d-14, 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-14 and 15d-14, 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.


<PAGE>




         *      Filed with this Form 10-Q.
         **     Furnished with this Form 10-Q. This certification shall not be
                deemed "filed" for purposes of Section 18 of the Securities
                Exchange Act of 1934, or otherwise subject to the liability of
                that section, nor shall it be incorporated by reference into any
                filing under the Securities Act of 1933 or the Securities
                Exchange Act of 1934.





<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 12, 2005             By:  /s/ Frank A. Caruso
                                    --------------------------
                                      Frank A. Caruso
                                      Chief Financial Officer