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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 March 3, 2006

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

                       For the transition period from to .

                         Commission File Number: 1-4404

                           THE STRIDE RITE CORPORATION
             (Exact name of registrant as specified in its charter)

              Massachusetts                       04-1399290
     ----------------------------                 ----------
    (State or other jurisdiction           (I.R.S. Employer Identified No.)
  of Incorporation or Organization)

                191 Spring Street, Lexington, Massachusetts 02421
               (Address of principal executive offices) (Zip Code)

                                  (617)824-6000
                   ------------------------------------------
              (Registrant's telephone number, including area code)


     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 a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and larger  accelerated  filer" in Rule 12b-2 of the Exchange Act.  (Check
One):

Large accelerated filer ( ) Accelerated filer (X) Non-accelerated filer ( )

     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 April 7, 2006, 36,721,456 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
                                 (In thousands)


<CAPTION>
                                     March 3,                         March 4,
                                       2006          December 2,        2005
                                   (Unaudited)          2005         (Unaudited)
                                  ---------------   --------------  ------------
  Assets

  Current Assets:
     Cash and cash
<S>                                    <C>              <C>             <C>
       equivalents                     $23,219          $33,094         $24,222

     Marketable securities                   -                -          20,400

     Accounts and notes
       receivable, net                 121,098           63,368          90,257

     Inventories                       115,594          116,095          94,785

     Deferred income taxes              14,262           14,211          12,816

     Other current assets               18,074           25,918          13,368
                                      --------         --------        --------

     Total current assets              292,247          252,686         255,848

  Property and equipment, net           51,625           51,367          52,708

  Goodwill                              56,732           56,729             908

  Trademarks and other
     intangibles                        58,590           58,590           1,690

  Other assets, net                     19,301           19,482          11,197
                                      --------         --------        --------

     Total assets                     $478,495         $438,854        $322,351
                                      ========         ========        ========
</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>
                                    March 3,                         March 4,
                                      2006         December 2,         2005
                                  (Unaudited)         2005          (Unaudited)
                                 ---------------  --------------   -------------

  Liabilities and Stockholders' Equity

  Current Liabilities:
<S>                                   <C>             <C>              <C>
     Accounts payable                 $28,120         $24,186          $19,556
     Income taxes payable               7,936          12,845           19,019
     Accrued expenses and other
       liabilities                     31,709          35,991           19,355
                                       ------          ------           ------
     Total current liabilities         67,765          73,022           57,930

  Long term debt                       95,000          60,000                -
  Deferred income taxes                23,781          23,980              487
  Pension obligation and other
       long-term liabilities           15,153          15,174           11,160

  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 and
       outstanding -
        36,711,809 on
        March 3,2006,
        36,499,403 on
        December 2, 2005 and
        36,062,434 on March
        4,2005                          9,172           9,125            9,016

     Capital in excess of par
       value                           22,634          18,434            9,605

    Retained earnings                 253,674         248,586          243,306
    Accumulated other
        comprehensive loss             (8,684)         (9,467)          (9,153)
                                     ---------       ---------        ---------
     Total stockholders' equity       276,796         266,678          252,774
                                     ---------       ---------        ---------

     Total liabilities and
       stockholders' equity           $478,495       $438,854         $322,351
                                     =========       ========         ========
</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 three months ended March 3, 2006 and March 4, 2005
                    (In thousands, except for per share data)


<CAPTION>
                                              2006             2005
                                         --------------  ---------------

<S>                                          <C>             <C>
Net sales                                    $183,416        $150,591

Cost of sales                                 110,184          90,059
                                            ---------       ---------

Gross profit                                   73,232          60,532

Selling and administrative expenses            58,910          47,451
                                            ---------       ---------

Operating income                               14,322          13,081


Investment income                                 484             300
Interest expense                               (1,163)            (81)
Other income (expense), net                      (144)            (57)
                                            ----------      ----------


Income before income taxes                     13,499          13,243

Provision for income taxes                     (5,214)         (5,082)


Net income                                   $  8,285       $   8,161
                                            =========       =========

Net income per common share:
   Diluted                                   $    .22       $     .22
                                            =========       =========
   Basic                                     $    .23       $     .23
                                            =========       =========

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

Average common shares used in
   per share computations:
   Diluted                                     37,703          36,963
                                            =========       =========
   Basic                                       36,588          36,007
                                            =========       =========
</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 three months ended March 3, 2006 and March 4, 2005
                                 (In thousands)

<CAPTION>
                                                      2006             2005
                                                  --------------   -------------
Cash flows from operating activities:
<S>                                                    <C>              <C>
   Net income                                          $8,285           $8,161
   Adjustments to reconcile net income to net
     cash provided by operating activities:
   Depreciation and amortization                        3,898            3,145
   Deferred income taxes                                 (245)             307
   Compensation expense related to stock plans            721              119
   Gain related to long-term investments                    -              (61)
   Gain on disposals of property and
     equipment                                           (307)             (35)
   Changes in:
      Accounts and notes receivable                   (57,565)         (42,601)
      Inventories                                         675           (7,014)
      Other current assets                              6,352              313
      Other current liabilities                        (4,489)             135
      Other long-term assets                              296           (1,925)
      Other long-term liabilities                       1,341              (44)
   Contribution to pension plan                             -           (3,000)
                                                    ---------        ---------
      Net cash used by operating activities           (41,038)         (42,500)
                                                    ----------       ---------

Cash flows from investing activities:
   Additions to property and equipment                 (3,850)          (1,573)
   Investments in marketable securities
     available for sale                                     -           (9,725)
   Proceeds from sale of marketable securities
     available for sale                                     -           60,175
   Distributions from long-term investments                 -               61
                                                    ---------        ---------
      Net cash (used in) provided from investing
      activities                                       (3,850)          48,938
                                                    ----------       ---------

Cash flows from financing activities:
   Borrowings under revolving credit facility          54,000                -
   Payments under revolving credit facility           (19,000)               -
   Proceeds from sale of stock under stock plans        2,489            4,984
   Tax benefit in connection with exercise of
     stock options                                        629                -
   Cash dividends paid                                 (2,189)          (1,795)
   Repurchase of common stock                          (1,587)          (5,692)
                                                    ---------        ---------
      Net cash provided from (used in) financing
      activities                                       34,342           (2,503)
                                                    ---------        ---------

Effect of exchange rate changes on cash and
      cash equivalents                                    671              282
                                                    ---------        ---------

Net (decrease) increase in cash and cash               (9,875)           4,217
     equivalents

Cash and cash equivalents at beginning of the
     period                                            33,094           20,005
                                                    ---------        ---------

Cash and cash equivalents at end of the period        $23,219          $24,222
                                                    =========        =========
</TABLE>

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


<PAGE>



PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 -   Summary of Significant Accounting Policies

Basis of Presentation

     The  financial  information  included  in this Form 10-Q of The Stride Rite
Corporation  (the  "Company")  for the periods  ended March 3, 2006 and March 4,
2005 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 March 3, 2006 and
March 4, 2005 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 2, 2005 on Form 10-K,  which
included all information and footnotes necessary for such presentation.

     Effective  July 1,  2004,  new  capitalization  rules  under  Massachusetts
Business  Corporation  Act,  Chapter 156D provided  that shares  reacquired by a
company  become  authorized but unissued  shares;  effectively  eliminating  the
concept  of  treasury  stock.  The  Company  has  reflected  this  change in the
accompanying consolidated consolidated balance sheet for the quarter ended March
4, 2005.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


     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;
assumptions  used  in  the  calculation  of  share-based   compensation   costs;
assumptions  and estimates used in valuing the assets and  liabilities  acquired
through business  acquisitions;  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  2002,   the  Company's   stockholders   approved  The  Stride  Rite
Corporation  Amended and Restated  Employee Stock  Purchase  Plan.  Amending the
Employee Stock Purchase Plan, among other things, increased the number of common
shares  available  for  issuance  thereunder  by  500,000  shares  to a total of
6,140,000  shares.  Under the Plan,  participating  associates can authorize the
Company to withhold up to 10% of their  earnings  during  consecutive  six month
payment  periods for the purchase of shares.  At the  conclusion  of the period,
associates  can purchase  shares at the lesser of 85% of the market value of the
Company's  common stock on either their entry date into the Plan or the last day
of the payment  period.  Effective  at the  commencement  of the January 1, 2006
withholding  period,  the Employee Stock Purchase Plan ("ESPP") will shorten its
withholding periods to three months, increase the purchase price from 85% of the
market value to 95% of the market value and eliminate the look-back provision to
the start of the  withholding  period.  For the  payment  period  which ended in
December  2005,  a total of  46,008  shares  were  issued  under the Plan for an
aggregate amount of $530,288.  At March 3, 2006, a total of 5,906,166 shares had
been purchased  under the Plan since inception and 233,834 shares were available
for purchase by participating associates.

     During  1998,   the  Company's   stockholders   approved  The  Stride  Rite
Corporation  1998  Non-Employee  Director Stock Ownership  Plan.  Under the 1998
Director's Plan, awards of common stock and options to purchase common stock are
granted to any director who is not an employee of the Company in accordance with
the  provisions  of the Plan.  During  April 2003,  the  Company's  stockholders
approved an  amendment  to the 1998  Director's  Plan  increasing  the number of
shares of common stock authorized for issuance from 300,000 to 600,000.  Options
to purchase  common  stock are granted at a price equal to the closing  price of
the Company's common stock on the date the option is granted.  Directors receive
an annual  grant of options to purchase  5,000  shares of common stock under the
Plan. Options have a term of ten years and are non-transferable. Under the Plan,
options become exercisable over a three-year period and must be paid for in full
at the time of exercise.  In April 1999, the stockholders  approved an amendment
to the Plan which  allowed  directors to receive  their annual  retainer  either
entirely in shares of common stock or


<PAGE>



PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

one-half  in  shares of common  stock and one-half  in cash  at  the election of
each director. In addition, directors may defer receipt of the stock and/or cash
portion of their annual  retainer by electing to  participate  in the  Company's
Deferred  Compensation  Plan for  Directors.  At March 3, 2006,  the issuance of
124,295 shares has been deferred by participating  directors.  At March 3, 2006,
173,762 options were available to grant under the 1998 Director's Plan.

     During 2004, the Company's  stockholders  approved an amendment to the 2001
Stock Option and Incentive Plan. This amendment,  among other things,  increased
the number of common shares of stock  reserved and available for issuance  under
the 2001 plan to  6,000,000  shares,  of which  3,000,000  shares  represent  an
increase over the previous number of shares reserved.  The 2001 Stock Option and
Incentive  Plan,  which  expires in April  2011,  replaced  a similar  long-term
incentive plan which had been approved by the  stockholders  in 1998.  Under the
Plan, as amended,  options to purchase common stock and stock awards of up to an
aggregate of 6,000,000  shares of the  Company's  common stock may be granted to
officers  and other key  associates.  At March 3, 2006,  1,812,095  options were
available  to grant under the 2001 plan.  The option price of the shares may not
be less than the fair market value of the Company's  common stock at the date of
grant.  Options issued under the Plan prior to fiscal 2005 generally vest over a
three-year  period and the rights to  purchase  common  shares  expire ten years
following  the date of grant.  Options  issued  since the  beginning of the 2005
fiscal  year  generally  vest over a  four-year  period and expire  seven  years
following the date of grant.  Beginning in fiscal 2005,  certain executives were
granted  restricted  stock  under the 2001  Plan.  These  restricted  shares are
subject to certain  pre-established  performance criteria,  which may affect the
number of restricted  shares received.  If issued,  these restricted shares will
vest over four  years in equal  annual  installments.  Stock  awards,  which are
limited to 1,000,000 shares in the Plan, generally vest over a four-year period.

     A summary of the activity in share based  compensation  with respect to all
plans for the three months ended March 3, 2006 are as follows:

<TABLE>
                                             Number of
<CAPTION>
                                            Options and
                                            Restricted          Weighted Average
                                              Shares            Exercise Price
--------------------------------------------------------------------------------
<S>                                           <C>                     <C>
Outstanding at December 2, 2005               3,697,847               $8.98
Granted                                         905,596               11.39
Exercised                                      (288,730)               6.78
Canceled                                        (44,254)              11.95
                                         ---------------              -----

Outstanding at March 3, 2006                  4,270,459               $9.60
                                         =================            =====
</TABLE>




<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
      The  following  table   summarizes   information   about  stock  options
outstanding at March 3, 2006:


                                 Weighted
                                 Average     Weighted
                               Remaining     Average    Aggregate
<CAPTION>
Range of             Number    Contractual   Exercise   Intrinsic
Exercise Prices   Outstanding      Life       Price       Value
---------------   -----------  -----------   --------   ---------

<C>   <C>           <C>          <C>            <C>    <C>
$5.00-$6.88         1,188,020    4.7 years      $5.93  $ 9,397,238
$7.38-$11.00        1,113,492    6.4 years       8.54    5,901,508
$11.01-$12.06       1,132,947    6.6 years      11.58    2,560,460
$12.13-$14.95         836,000    6.7 years      13.57      231,535
                    ---------    ---------      -----  -----------
                    4,270,459    6.0 years      $9.60  $18,090,741
                    =========    =========      =====  ===========
</TABLE>


<TABLE>
      The following table summarizes information about stock options exercisable
at March 3, 2006:

                                 Weighted
                                 Average     Weighted
                                Remaining    Average    Aggregate
<CAPTION>
   Range of         Number     Contractual   Exercise   Intrinsic
Exercise Prices   Exercisable      Life       Price       Value
---------------   -----------  -----------   --------   ---------

<S>                 <C>          <C>            <C>     <C>
$5.00-$6.88         1,076,327    4.6 years      $6.55   $7,846,424
$7.38-$11.00          992,445    6.2 years       8.33    5,468,372
$11.01-$12.06         520,170    6.7 years      11.38    1,279,618
$12.13-$14.95          55,000    2.4 years      12.26       86,900
                    ---------    ---------      -----  -----------
                    2,643,942    5.6 years      $8.29  $14,681,314
                    =========    =========      ===== ===========
</TABLE>




     In December 2004, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123R, "Share-Based Payment" ("SFAS 123R"),
which  requires  all  share-based  payments to  employees,  including  grants of
employee stock options,  to be recognized in the financial  statements  based on
their fair values. SFAS 123R revises SFAS No. 123 and supersedes APB Opinion No.
25, "Accounting for Stock Issued to Employees".  Effective December 3, 2005, the
Company  adopted  the  provisions  of SFAS 123R using the  modified  prospective
application  transition  method.  Under this transition method, the compensation
cost related to all equity  instruments  granted prior to, but not yet vested as
of adoption  recognized is based on the grant-date fair value which is estimated
in  accordance  with the original  provisions of SFAS 123. The  grant-date  fair
value of the awards generally vest over the service period. Under the provisions
of SFAS 123R,  the  Company is  required to include an estimate of the number of
the awards that will be forfeited.  Previously,  the Company had  recognized the
impact of forfeitures as they occurred.

     Effective at the  commencement of the January 1, 2006  withholding  period,
the  changes  made  to  the  ESPP  resulted  in  the  plan's   qualification  as
non-compensatory under SFAS No. 123R.

     Share-based  compensation  costs were $721  thousand  for the three  months
ended March 3, 2006,  of which $105  thousand  are included in cost of sales and
$616  thousand  are  included  in selling  and  administrative  expenses  in the
accompanying  condensed  consolidated  statements of income. The Company did not
capitalize any  share-based  compensation  costs as the costs that qualified for
capitalization  were not  material.  The related tax benefit of the  share-based
compensation  costs  recognized in the three months ended March 3, 2006 was $295
thousand.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     Prior to  December  3, 2005,  the Company  had  accounted  for  share-based
compensation  costs in accordance  with APB Opinion No. 25, as permitted by SFAS
No. 123. 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. 123 as amended by SFAS No. 148,  "Accounting for Stock-Based  Compensation -
Transition and Disclosure",  through  disclosure only for the three months ended
March 4, 2005:

<TABLE>
<CAPTION>
                                                  Three Months
                                                     Ended
                                                    March 4,
(In thousands, except for per share data)            2005
---------------------------------------------  ----------------

<S>                                                   <C>
Net income, as reported                               8,161

Add:  Stock-based employee compensation
expense included in net income, net of
related tax effects                                      83

Deduct:  Total stock-based
employee compensation expense determined
under fair value based method for all
awards, net of related tax effects
                                                       (497)

Pro forma net income                                $ 7,747
                                                    =======

Earnings per share:
   Basic - as reported                              $   .23
                                                    =======
   Basic - pro forma                                $   .22
                                                    =======

   Diluted - as reported                            $   .22
                                                    =======
   Diluted - pro forma                              $   .21
                                                    =======
</TABLE>

     The  weighted  average  grant date fair value  used in the  calculation  of
share-based  compensation  costs  in  the  accompanying  condensed  consolidated
statements  of income for the three months ended March 3, 2006 and the pro forma
net  income  and  earnings  per  share  information  presented  above  has  been
calculated  using the  Black-Scholes  option  pricing  model with the  following
weighted average assumptions:

<TABLE>
<CAPTION>
Employee Stock Options                                 2006       2005
-----------------------------------------------------------------------
<S>                                                   <C>        <C>
Risk-free interest rate                               4.32%      3.44%
Dividend yield                                         1.8%       1.7%
Volatility factor                                     26.6%      35.0%
Weighted average
   expected life of options (years)                    4.75       4.00
</TABLE>

     The weighted  average  expected  life of options was  calculated  using the
simplified  method as prescribed  by the  Securities  and Exchange  Commission's
Staff  Accounting  Bulletin  No.  107.  This  decision  was based on the lack of
relevant historical data due to decreasing the option's contractual term from 10
years to 7 years and  increasing  the vesting period from 3 years to 4 years for
options that were granted starting in fiscal year 2005. The risk-free


<PAGE>


interest  rate  assumption was  based on  the  United States Treasury's constant
maturity's  rate for a 4.75 year term on the date the  option was  granted.  The
volatility  assumption was based on weekly historical volatility during the time
period that corresponds to the expected weighted average life of the option. The
assumed dividend yield was based on the Company's expectation of future dividend
payouts.  The post-vesting  forfeiture rate is based on the four year historical
average  turnover  rate for two  groups  of  option  eligible  employees.  These
assumptions are evaluated, and revised as necessary,  based on changes in market
conditions and historical experience.

     The weighted average grant date fair values of stock options granted during
the three months  ended March 3, 2006 and March 4, 2005 were  estimated at $3.46
and $3.35, respectively.

     Total  unrecognized  share-based  compensation  costs related to non-vested
stock options was  approximately  $6.8 million as of March 3, 2006 which related
to  approximately  1.7 million  shares with a per share weighted value of $3.92.
This  unrecognized  cost is expected to be  recognized  over a weighted  average
period of approximately 3 years. The intrinsic value of options exercised during
the three months ended March 3, 2006 was approximately $1.5 million.



<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 stock  options and
other types of stock-based compensation that issue common stock are 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
                                        ----------------------------------------
<CAPTION>
                                               March 3,              March 4,
                                                 2006                  2005
                                        ---------------------     --------------
                                       (In thousands, except for per share data)
<S>                                            <C>                   <C>
Net income                                     $ 8,285               $ 8,161
                                               =======               =======

Weighted average common shares
outstanding (basic)                             36,588                36,007

Dilutive effect of share-based
compensation                                     1,115                   956
                                               -------               -------

Weighted average common shares
outstanding (diluted)                           37,703                36,963
                                               =======               =======

Earnings per common share:
     Basic                                     $   .23               $   .23
                                               =======               =======

     Diluted                                   $   .22               $   .22
                                               =======               =======
</TABLE>


     The  following  weighted  shares have been excluded in the  computation  of
diluted earnings per share because the weighted shares are anti-dilutive:

                                                  First Quarter
                                           ----------------------------
                                                  2006            2005
                                           ------------    ------------
                                                 (In thousands)

Anti-dilutive weighted shares                      944             399




<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
                                                --------------------------------
                                                    March 3,           March 4,
                                                      2006               2005
                                                ------------------  ------------
                                                          (In thousands)

<S>                                                  <C>               <C>
Net income                                           $8,285            $8,161

Other comprehensive income:
Foreign currency translation adjustments                783               245
                                                     ------            ------

Total comprehensive income                           $9,068            $8,406
                                                     ======            ======
</TABLE>



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

<CAPTION>
                                    March 3,        December 2,       March 4,
                                      2006             2005             2005
                                 ---------------  ----------------  ------------
                                                  (In thousands)
Foreign currency  translation
<S>                                    <C>               <C>               <C>
adjustments                            $730              $(53)             $80
Minimum pension liability
   adjustments, net of taxes         (9,414)           (9,414)          (9,233)
                                    --------          --------         --------
Accumulated other
comprehensive loss                  $(8,684)          $(9,467)         $(9,153)
                                    ========          ========         ========
</TABLE>


Note 4 - Saucony Acquisition

     In September 2005, the Company  completed its acquisition of Saucony,  Inc.
("Saucony")  pursuant  to an  Agreement  and  Plan  of  Merger.  As  part of the
acquisition  and in the fourth quarter of 2005, the Company  entered into a plan
to exit several owned and leased Saucony  facilities,  to combine the operations
of these  facilities  within the  existing  Stride Rite  infrastructure,  and to
terminate the employment of approximately 110 Saucony employees worldwide due to
identified synergies.

<TABLE>
Details of the acquisition related accruals are as follows:

<CAPTION>
                                              Acquisition    Acquisition
                                                Related        Related
(In thousands)                                 Severance      Exit Costs
-------------------------------------------   -------------  -------------
<S>                           <C>                 <C>                <C>
Beginning balance at December 2, 2005             $2,113             $932
Additions charged to cost and expenses                 -                -
Utilization                                          (555)              -
Foreign currency translation impact                    4                1
                                                  ------            -----
Balance at March 3, 2006                          $1,562             $933
                                                  ======             ====
</TABLE>



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The following pro forma  information  presents the results of operations of
the Company as if the Saucony  acquisition  had taken place on December 4, 2004.
The pro forma results are not necessarily  indicative of the financial  position
or results of operations of the Company had the merger been  consummated  on the
date  indicated.  In  addition,  the  pro  forma  results  are  not  necessarily
indicative of future financial condition or operating results of the Company.

<TABLE>
                                       Pro forma
                                       ---------
<CAPTION>
                                    Three Months Ended
                                         March 4, 2005
              (In thousands)                (Unaudited)
              ------------------------------------------
<S>                                            <C>
              Revenue                          $192,538

              Operating Income                   18,093

              Net income                       $ 10,698
                                               ========

              Earnings per
              share:
              Basic                               $0.30
                                                  =====
              Diluted                             $0.29
                                                  =====
</TABLE>


     The pro  forma  information  was  prepared  by  combining  Saucony,  Inc.'s
unaudited  condensed  consolidated  statements of income for the thirteen  weeks
ended  April  1,  2005  and  the  Company's  unaudited  condensed   consolidated
statements  of income  for the  three  months  ended  March 4,  2005.  Pro forma
adjustments have been made to reflect the  amortization  expense relating to the
finite life  intangible  assets,  the changes in depreciation  and  amortization
expense  resulting from the fair value  adjustments to the net tangible  assets,
and interest  expense  relating to  acquisition  related debt. No portion of the
purchase accounting write up of inventory to fair value has been included in the
this pro forma  information  because of the  difficulty  in  estimating  such an
adjustment under the LIFO inventory costing method.

Note 5 - Debt

     In connection with the  acquisition of Saucony,  the Company entered into a
five-year  revolving  credit  facility  pursuant  to a  Credit  Agreement  dated
September 16, 2005 (the "Credit  Agreement').  The Credit Agreement provides for
secured  revolving  loans  in an  aggregate  amount  up  to  $275  million  (the
"revolver"),  including a $75 million  sublimit  for the  issuance of letters of
credit and a $15  million  sublimit  for swing  line  loans,  with $200  million
currently  committed.  Borrowings  under the Credit  Agreement  are scheduled to
mature on September 16, 2010 and are  collateralized by substantially all of the
assets  of the  Company.  Refer  to Note  No.  7 in the  Company's  consolidated
financial  statements for the fiscal year ended December 2, 2005 as contained on
Form 10-K filed by the  Company  with the  Securities  and  Exchange  Commission
("SEC") on February  13, 2006 and the Form 8-K filed by the Company with the SEC
on September 22, 2005 for additional information.

     During  the first  quarter of fiscal  2006  borrowings  under  this  Credit
Agreement  averaged $78.1 million,  with a maximum amount  outstanding of $101.0
million. The weighted average interest rate on these borrowings during the



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

first  quarter  of fiscal  year 2006 was 5.80%.  On  March 3, 2006, $95  million
was outstanding under the revolver.  Cash interest payments were $1.1 million in
the first quarter of fiscal year 2006.  There were no borrowings  outstanding at
any time during the first  quarter of the prior fiscal year.  The Company was in
compliance with its covenants as of March 3, 2006.

Note 6 - Benefit Plans

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

<CAPTION>
                                                      Three Months Ended
                                              ----------------------------------
                                                    2006               2005
                                              ----------------   ---------------
                                                        (In thousands)
<S>                                                  <C>               <C>
Service cost                                         $570              $530
Interest cost                                       1,029               955
Expected return on assets                          (1,143)           (1,120)
Net loss recognized                                   510               505
Amortization of prior service cost                      3                 5
                                                   ------            ------

Net periodic benefit cost                            $969              $875
                                                   ======            ======
</TABLE>

     During the first quarter of fiscal 2006, no contributions  were made to the
Company's  defined benefit pension plan. At this time, the Company does not plan
to make any  contributions  to its defined  benefit pension plan during the 2006
fiscal year.

Note 7 - 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 January, 2004, we finalized the
terms of the  current  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.  Additionally,  Tommy  Hilfiger Corp. is
under agreement to be acquired by an unrelated third party. If we lose the Tommy
Hilfiger license, our business would be materially and adversely affected.

     In  December  of  2004,   Saucony,   Inc.  recorded  a  charge  to  address
environmental  conditions at a Saucony owned distribution facility. The facility
and the related  liability  were  acquired by the Company as part of the Saucony
acquisition  in  September  of  2005.  The  liability  as of  March  3,  2006 is
$1,931,000 and is included as an accrued expense in the  accompanying  condensed
consolidated  balance sheet. The original estimated costs ranged from $1,242,000
to $4,621,000. The Company's management determined that the liability was fairly
stated upon  acquisition.  The  assessment of the  liability and the  associated
costs are an estimate based upon available  information after  consultation with
environmental  engineers,  consultants  and  attorneys  assisting the Company in
addressing these environmental issues. Actual costs


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

to  address  the  environmental  conditions  may  change  based  upon  further
investigations,  the  conclusions of regulatory  authorities  about  information
gathered in those investigations and due to the inherent  uncertainties involved
in estimating  conditions in the  environment  and the costs of addressing  such
conditions.  During the first quarter of the fiscal 2006,  there were no changes
to the reserve.

Note 8 - Operating Segments and Related Information

     In  September  2005 the Company  acquired  Saucony,  Inc.  During the first
quarter of 2006, a portion of Saucony's operations were integrated into existing
operating  segments of the Company.  As a result,  the Company  re-assessed  its
reportable  segments  under SFAS No.  131,  "Disclosures  about  Segments  of an
Enterprise and Related Information".

     The  changes  during  the first  quarter  of fiscal  2006 to the  Company's
reportable  segments are as follows:  the Stride Rite Children's  Group - Retail
Division  includes the Saucony  factory  outlet stores (16 stores as of March 3,
2006);  Saucony's  international  operations are now included in the Stride Rite
International  division  which is  aggregated  in the Other  Wholesale  Footwear
reportable  segment;  Saucony's domestic footwear  division,  which includes the
Hind unit, is now aggregated in the Other Wholesale Footwear reportable segment.

     As a result of the  adoption  of SFAS No. 123R at the  beginning  of fiscal
2006,  stock-based  compensation  costs of $721  thousand  are  included  in the
operating  loss of the  Unallocated  Corporate  and Other  segment for the three
months ended March 3, 2006. See Note 1 for further information.

<TABLE>
For the three months ended March 3, 2006 and March 4, 2005:
<CAPTION>
              Stride    Stride
              Rite      Rite
              Children'sChildren'sTommy    Other     Unallocated
First         Group -   Group -   Hilfiger Wholesale Corporate
Quarter 2006  Retail    Wholesale Footwear Footwear   & Other  Consolidated
              -------------------------------------------------------------

Sales          $37,924    $21,156 $14,933   $112,960         -    $186,973

Intercompany
  sales              -        (27)   (865)    (2,665)        -      (3,557)
              -------------------------------------------------------------
Net sales to
external
customers      $37,924    $21,129 $14,068   $110,295         -    $183,416
              =============================================================
Operating
  (loss)
<S>            <C>        <C>      <C>      <C>        <C>        <C>
  income       $(2,906)   $ 2,802  $ (338)  $ 17,726   $(2,962)   $ 14,322

Interest and
  other,
  net                -          -       -          -      (823)       (823)
              -------------------------------------------------------------

Income
(loss)before
income
taxes          $(2,906)   $ 2,802 $  (338)  $ 17,726   $(3,785)   $ 13,499
              =============================================================

Total assets   $44,457    $48,610 $14,615   $304,958   $65,855    $478,495
              =============================================================
</TABLE>



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>

<CAPTION>
              Stride    Stride
              Rite      Rite
              Children'sChildren'sTommy    Other     Unallocated
First         Group -   Group -   Hilfiger Wholesale Corporate
Quarter 2005  Retail    Wholesale Footwear Footwear   & Other  Consolidated
              -------------------------------------------------------------

Sales          $35,445   $25,586  $18,121   $74,053          -    $153,205

Intercompany
sales                -       (25)    (841)   (1,748)         -      (2,614)
              -------------------------------------------------------------

Net sales to
external
customers      $35,445   $25,561  $17,280   $72,305          -    $150,591
              =============================================================

Operating
(loss)
<S>              <C>      <C>     <C>       <C>        <C>         <C>
income           $(534)   $4,037  $(1,227)  $13,432    $(2,627)    $13,081

Interest and
other,
net                  -         -        -         -        162         162
              -------------------------------------------------------------

Income
(loss)
before
income
taxes            $(534)   $4,037  $(1,227)  $13,432    $(2,465)    $13,243
              =============================================================

Total assets  $37,843    $64,002  $26,393  $103,405    $90,708    $322,351
              =============================================================
</TABLE>

Note 9 - Recent Accounting Pronouncements

     In March 2005,  FASB issued FASB  Interpretation  No. 47,  "Accounting  for
Conditional Asset Retirement  Obligations" ("FIN 47"), an interpretation of SFAS
No. 143,  "Accounting for Asset Retirement  Obligations".  FIN 47 clarifies that
"conditional asset retirement obligation",  as used in SFAS No. 143, refers to a
legal obligation to perform an asset retirement activity in which the timing and
(or) the method of settlement are  conditional on a future event that may or may
not be within control of an entity.  The  interpretation  also clarifies that an
entity  should  record  the  fair  value  of  such a  liability  when  it can be
reasonably  estimated.  The  entity  shall  recognize  such  a  liability  as  a
cumulative  change  in  accounting  principle.  The  provisions  of  FIN  47 are
effective no later than the end of fiscal years ending after  December 15, 2005;
therefore  effective  at the  Company's  2006  fiscal  year end.  The Company is
currently  evaluating  the  provisions  of FIN 47 to determine the impact on our
financial position, results of operations, and cash flow.


Note 10 - Subsequent Events

     In the second  quarter of fiscal 2006, a tax audit was  concluded for which
the Company had  established  reserves  in prior  years.  The outcome of the tax
audit was  favorable and is expected to result in the reversal of prior year tax
reserves which may be significant.


<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  Securities  and
Exchange Commission,  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


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

protect  trademarks,  patents  and  other  intellectual  property;   performance
and reliability of products;  customer service;  adverse publicity;  the loss of
significant  suppliers or  customers,  such as  department  stores and specialty
retailers, the 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 2005.
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 2, 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

     At the beginning of the 2006 fiscal year the Company  adopted SFAS No. 123R
using the modified prospective  application transition method which requires the
Company  to  develop  assumptions  that are used to  estimate  the fair value of
share-based compensation.

     The Company has elected to use the Black  Scholes  option-pricing  model to
calculate these fair values. The Black Scholes model requires the development of
assumptions for the six variables that are input into the model. These variables
are the price of the underlying  stock;  the exercise  price of the option;  the
expected  term of the  option;  the  annual  risk-free  interest  rate  over the
option's  expected term; the expected stock price  volatility  over the option's
expected term; and the expected annual dividend yield on the underlying stock.

     The weighted average expected life of options was calculated using the safe
harbor method as prescribed by the  Securities and Exchange  Commission's  Staff
Accounting  Bulletin  No. 107.  This  decision was based on the lack of relevant
historical data due to decreasing the option's contractual term from 10 years to
7 years and  increasing  the vesting  period from 3 years to 4 years for options
that were granted  starting in fiscal year 2005.  The  risk-free  interest  rate
assumption was based on the United States  Treasury's  constant  maturity's rate
for a 4.75  year  term on the  date  the  option  was  granted.  The  volatility
assumption was based on weekly historical volatility during the time period that
corresponds  to the expected  weighted  average life of the option.  The assumed
dividend  yield  was  based on the  Company's  expectation  of  future  dividend
payouts. The post-vesting  forfeiture rate was based on the four year historical
average turnover rate for two groups of option eligible employees.

     Developing these assumptions  requires  significant judgment on the part of
the Company and, generally, may involve analyzing all available historical data,
considering  whether  historical data is relevant to predicting future behavior,
making  appropriate  adjustments  to  historical  data for future  expectations,
supplementing  or replacing  company-  specific  historical  data with data from
other supportable sources and appropriately  weighting each of the inputs. These
assumptions are evaluated, and revised as necessary,  based on changes in market
conditions and historical experience.

     Effective at the  commencement of the January 1, 2006  withholding  period,
the Employee Stock Purchase Plan ("ESPP")  shortened its withholding  periods to
three months,  increased the purchase  price from 85% of the market value to 95%
of the market value and eliminated  the look-back  provision to the start of the
withholding  period.  The  changes  made  to the  ESPP  resulted  in the  plan's
qualification as non-compensatory under SFAS No. 123R.

     The  Company  does not  currently  expect  to change  the level of  options
granted.

     Please refer to Footnote number one in Item I, Part I of this Form 10-Q for
further 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 sales of Tommy Hilfiger branded  footwear are a significant  portion of
our business.  The Tommy Hilfiger footwear sales are contingent on our licensing
agreement with Tommy Hilfiger Licensing, Inc. In 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.  Additionally,  Tommy  Hilfiger  Corp. is under
agreement  to be  acquired by an  unrelated  third  party.  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 first
quarter of fiscal  2006 as compared to the results for the same period in fiscal
2005:
<TABLE>

<CAPTION>
Increase Percent vs. 2005 Results:
                                                                First Quarter

<S>                                                                 <C>
Net sales                                                           21.8%
Gross profit                                                        21.0%
Selling and administrative expenses                                 24.1%
Operating income                                                    9.5%
Income before income taxes                                          1.9%
Net income                                                          1.5%
</TABLE>






<TABLE>
Operating Ratios as a Percent of Net Sales:
<CAPTION>
                                                      First Quarter
                                             --------------------------------
                                                 2006              2005
                                             --------------    --------------

<S>                                              <C>               <C>
Gross profit                                     39.9%             40.2%
Selling and administrative expenses              32.1%             31.5%
Operating income                                 7.8%               8.7%
Income before income taxes                       7.4%               8.8%
Net income                                       4.5%               5.4%
</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 first quarter breakdown of net sales is as follows:
<CAPTION>
                                                                 Percent
                                                                  Change
                                                                 2006 vs.
                                            2006       2005        2005
                                           --------  ---------  -----------
(In millions, except percentages)
<S>                                          <C>        <C>         <C>
Stride Rite Children's Group - Wholesale     $21.2      $25.6       (17.3%)
Stride Rite Children's Group - Retail         37.9       35.4         7.0%
                                           --------  ---------  -----------
Stride Rite Children's Group                  59.1       61.0        (3.1%)

Keds                                          42.0       45.8        (8.3%)
Sperry Top-Sider                              23.6       19.4        21.6%
Stride Rite International                     22.8        8.8       159.1%
Saucony                                       24.6          -       100.0%
                                           --------  ---------  -----------
Other Wholesale Footwear                     113.0       74.0        52.5%

Tommy Hilfiger Footwear                       14.9       18.1       (17.6%)

Elimination of intercompany sales             (3.6)      (2.5)        n/a
                                           --------  ---------  -----------

Total net sales                             $183.4     $150.6        21.8%
                                           ========  =========  ===========
</TABLE>

     During the first quarter of fiscal 2006,  consolidated  net sales increased
$32.8 million to $183.4 million,  or 21.8% above the sales level achieved in the
first  quarter of fiscal 2005.  Wholesale net sales  increased  $30.3 million or
26.5% for the first quarter of 2006,  and overall  retail  sales,  including the
e-commerce  sites,  increased  $2.5  million or 7.1% when  compared  to the same
period in the prior year.  Unit shipments of first quality  merchandise  for the
wholesale  brands during the first quarter were 4.5% higher than the  comparable
period in 2005.  The Company's  average first  quality  wholesale  selling price
increased  17.8% from the first  quarter of 2005 which was  primarily due to the
addition of Saucony.

     First quality  wholesale  net sales  increased by $27.8  million,  or 26.1%
above the  wholesale  net sales level  achieved  in the first  quarter of fiscal
2005. This includes the negative  impact of a $1.4 million  increase in combined
discounts,  returns and allowances.  Sales of closeout  products  increased $2.3
million from the comparable period in the 2005 fiscal year.

Gross Profit

     During the first  quarter of fiscal  2006,  the  Company's  gross profit of
$73.2 million  increased $12.7 million or 21.0% above the amount recorded during
fiscal 2005's first  quarter.  The gross profit  percentage  rate for the fiscal
2005 first quarter  decreased 0.3 percentage  points to 39.9%,  versus the 40.2%
rate  achieved  in the  prior  year's  first  quarter.  The lower  gross  profit
percentage was largely  attributable  to the additional  pre-tax expense of $2.6
million  relating  to the flow  through  of the  remaining  purchase  accounting
inventory  write-up  to fair  value  that was  recorded  as part of the  Saucony
acquisition. The effect that this decrease had on the gross profit percentage


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

was partially offset by significantly higher first quality sales in the first
quarter of fiscal 2006.

Operating Costs

     During  the  first  quarter  of fiscal  2006,  selling  and  administrative
expenses were $58.9  million,  an increase of $11.5 million or 24.1% as compared
to the first quarter of fiscal 2005. This increase was principally the result of
the inclusion of Saucony which added $8.8 million in expenses. Also contributing
to the  higher  expense  levels in the first  quarter  fiscal  2006 was the $2.4
million in added  costs  associated  with the  increased  number of Stride  Rite
Children's Group retail stores which includes  Saucony's  factory outlet stores.
In  addition,  the first  quarter  of 2006  included  $1.2  million  of  Saucony
integration  expenses  and $0.6  million of  expenses  relating  to  share-based
compensation upon adoption of SFAS No. 123(R). As a percent of sales,  operating
costs were 32.1% in the first  quarter of fiscal  2006  compared to 31.5% in the
first quarter of fiscal 2005.

Other Income and Taxes

     Investment  income related to the Company's cash equivalents and marketable
securities  was $0.5  million  in the first  quarter of fiscal  2006,  which was
increased  $0.2  million  versus the  similar  period in fiscal  2005.  Interest
expense,  which relates to  borrowings  under the  revolving  credit  agreement,
increased by $1.1 million in the first quarter of fiscal 2006 as compared to the
first quarter of fiscal 2005 as no borrowings were made during the first quarter
of fiscal 2005.

     The provision for income taxes  increased $0.1 million in the first quarter
of fiscal 2006 as compared to the similar  period in fiscal 2005.  This increase
was due to the higher pre-tax income amount and a slightly  higher tax rate. Our
effective  tax rate was 38.6% in the first quarter of fiscal 2006 as compared to
38.4% in the first quarter of fiscal 2005.

     In the second  quarter of fiscal 2006, a tax audit was  concluded for which
the Company had  established  reserves  in prior  years.  The outcome of the tax
audit was  favorable and is expected to result in the reversal of prior year tax
reserves which may be significant.

Net Income

     Net  income  for the first  quarter  of fiscal  2006 was $8.3  million,  an
increase  of $0.1  million,  or 1.5% as compared to the same period in the prior
year.  The higher net sales and resulting  gross profit,  due to the addition of
Saucony,  were able to offset the corresponding  increases in operating expenses
and interest expense.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

Segments Review

     In  September  2005 the Company  acquired  Saucony,  Inc.  During the first
quarter  of  2006  Saucony's   operations  were  integrated  into  the  existing
operations of the Company.  As a result,  the Company  re-assessed its operating
and reportable  segments under SFAS No. 131,  "Disclosures  about Segments of an
Enterprise and Related  Information".  The changes to the Company's segments are
as follows:  the Stride Rite Children's Group - Retail Division now includes the
Saucony  factory  outlet  stores  (16  stores  as of March 3,  2006);  Saucony's
international  operations  are now  included  in the Stride  Rite  International
division,  which  is  aggregated  in the  Other  Wholesale  Footwear  reportable
segment,  the Saucony domestic footwear division,  which includes the Hind unit,
is aggregated into the Other Wholesale Footwear reportable segment.

Stride Rite Children's Group - Retail

     The net sales of the Stride Rite Children's  Group - Retail  increased $2.5
million or 7.0% in the first  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)  decreased  3.4% for the first  fiscal  quarter of
2006.  The  decrease  in  the  comparable   stores   category  was   principally
attributable to the shift of the annual  pre-Easter  holiday  promotional  event
into the second  quarter of fiscal  2006,  as compared  to the first  quarter of
fiscal 2005.  At the end of the first  quarter of fiscal  2006,  the Stride Rite
Children's  Group - Retail  operated 280 Stride Rite  children's shoe stores and
outlets.  This is a net  increase of 26 stores,  or 10% from the end of the same
period in the prior  year.  In  addition  Stride  Rite  Children's  Group-Retail
operated 18 Saucony  outlet  stores.  Current plans for fiscal 2006 call for the
opening of approximately  33 retail stores and the closing of 4  underperforming
Saucony outlet stores and 2 underperforming  children's shoe stores.  During the
first   quarter  of  2006  the  Company   opened  9  new  stores  and  closed  3
underperforming Saucony outlet store locations.

     The  Stride  Rite  Children's  Group - Retail  operating  income  decreased
primarily due to the lower sales  brought  about by the shift in the  pre-Easter
sales event out of the first quarter of fiscal 2006 and into the second  quarter
and certain increased indirect store costs.

Stride Rite Children's Group - Wholesale

     Sales  decreased  $4.4 million or 17.3% during the first quarter of 2006 as
compared to the same quarter  last year.  This  decrease in sales was  partially
related to the later Easter holiday. In addition first quarter fiscal 2006 sales
were affected by a change in certain  department store buying patterns,  a value
channel  strategy  change and a decline  in the  number of  smaller  independent
accounts.


<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 2006 compared to 2005. A higher gross profit rate in the first quarter of
fiscal 2006 was due to an  improved  mix and offset a portion of the lower sales
volume.

Tommy Hilfiger Footwear, Inc.

     The decrease in sales of Tommy Hilfiger  footwear products during the first
quarter of fiscal 2006 was primarily  attributable to a significant reduction in
sales  to  department   stores,   a  decrease  in  close-out   sales,   and  the
discontinuation  of the "H"  line.  This  decrease  was  partially  offset by an
increase in certain product sales in the women's  business and lower returns and
allowances.

     The reduction of the Tommy  Hilfiger  operating  loss versus prior year was
primarily related to an improved gross profit due to the impact of product sales
mix due  mostly  to  reduction  in the  sales of  closeout  products.  Operating
expenses  were lower in the first quarter of fiscal 2006 as compared to the same
period in the prior  year,  which also  contributed  to the  improved  operating
profit versus the prior year.

Other Wholesale Footwear

     The overall  increase in net sales of the Other Wholesale  Footwear segment
was primarily attributable to the addition of Saucony as well as increased sales
of Sperry Top-Sider and Stride Rite International which now includes the foreign
distribution of Saucony products.  This overall increase was partially offset by
a decrease in Keds sales.

     The first  quarter of fiscal 2006 was the first  complete  quarter in which
Saucony's  results  of  operations  were  included  in  the  Company's  results.
Saucony's  domestic sales added $24.6 million of net sales.  Saucony's net sales
met  the  Company's  expectations  on  the  strength  of the  technical  running
products.

     The Sperry Top-Sider  increase was largely  attributable to strong sales of
the men's and  women's  product  lines.  The  significant  growth in the  Sperry
Top-Sider  product sales in 2006 resulted from  increases in the marine,  family
and independent retail channels.

     The Stride  Rite  International  division's  net sales  growth in the first
quarter  of fiscal  2006 was  primarily  the  result of strong  sales of Saucony
products  in Europe and  Canada.  In addition  Keds sales  increased  in Canada,
Australia and Asia,  and Sperry  Top-Sider's  sales also increased in Europe and
South Africa.



<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 Keds sales decline in first quarter  fiscal 2006 versus the same period
last year was partially in the value sales channel and was planned. In addition,
the strong prior year sell-in to the premium  retail  channel  resulted in lower
sales  comparisons to last year. The consolidation of May Company into Federated
also  negatively  impacted Keds sales in the quarter and is expected to continue
to do so for the remainder of the fiscal year.

     The  increased  operating  income  versus  prior year in this  segment  was
primarily  the result of the  addition of Saucony  and the  increase in sales of
Stride Rite International and Sperry Top-Sider. The increase was somewhat offset
by a lower gross profit  performance of Saucony  resulting from the flow through
of the  remaining  purchase  accounting  write-up of acquired  inventory to fair
value.

Liquidity and Capital Resources

     At the end of the first fiscal quarter of 2006, our balance sheet reflected
a current  ratio of 4.3 to 1.0 with $95.0  million in long term debt.  Our cash,
cash  equivalents  and marketable  securities  totaled $23.2 million at March 3,
2006, a decrease of $21.4  million  from the total cash,  cash  equivalents  and
marketable securities of $44.6 million at the end of the first quarter of fiscal
2005. The decrease in our cash balance, versus the comparable quarter last year,
is primarily  attributable to funding a portion of the Saucony acquisition which
was completed in September 2005.

     The Company's seasonal cash flow patterns typically require the use of cash
during the first  quarter of a fiscal year.  During the first  quarter of fiscal
2006,  the  Company  used  $41.0  million of cash to fund  operations  which was
consistent  with the $42.5 million used to fund  operations in the first quarter
of fiscal 2005.  Inventory levels at the end of the first quarter of fiscal 2005
increased  $20.8  million,  or 22.0% from the levels  recorded at the end of the
prior year's first quarter.  The increase in inventory  related primarily to the
addition of Saucony  product.  Accounts  receivable  at March 3, 2006 were $30.8
million or 34.2% higher than the amount at the end of last year's first  quarter
which was  primarily due to the addition of Saucony and higher sales in the last
month of the fiscal quarter. Days sales outstanding ("DSO"),  which measures the
length of the collection period for accounts receivable,  was 56 days at the end
of the first fiscal quarter of 2006 which was  unfavorable  when compared to the
DSO of 52 days at the end of the same period last year. The increase in DSO from
the same period last year was primarily  attributable to the addition of Saucony
which generally offers longer credit terms to its customers.  Accounts  payable,
at the end of the first quarter of fiscal 2006,  increased $8.6 million from the
level  recorded at the end of the prior year's first  quarter.  The increase was
primarily  due to the addition of Saucony.  During the first  fiscal  quarter of
2006, the Company did not contribute to its defined benefit pension plan and, at
this time,  the Company does not plan to make any  contributions  to its defined
benefit pension plan during the remainder of the 2006 fiscal year.



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

     Additions  to property  and  equipment  totaled  $3.9  million in the first
fiscal  quarter of 2006,  an increase  compared to the $1.6 million in the first
fiscal quarter of 2005. The increase in capital  purchases  compared to the same
period in fiscal  2005  related  primarily  to the  continued  retail  expansion
efforts  during  the first  fiscal  quarter  of 2006 and the  renovation  of our
corporate  headquarters.  Funding of our capital  expenditures  was  provided by
operations and our revolving credit facility.

     At the end of the first  quarter of fiscal  2006,  there was $95.0  million
outstanding  under the Company's  $275.0 million  revolving  credit  facility of
which $200.0 million is currently  committed.  The increase in the first quarter
of fiscal 2006, as compared to the fiscal year ending  December 2, 2005, was the
result of increased  seasonal working capital  requirements  that are typical of
the first  quarter of a fiscal year.  The facility was entered into in September
2005 as part of the Saucony acquisition and to provide funds for working capital
and general corporate purposes.  As of March 3, 2006, letters of credit totaling
$40.8 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.

     During  the first  quarter  of fiscal  2006 we  returned  $3.8  million  to
shareholders through share repurchases and cash dividends. We spent $1.6 million
to repurchase  108,500 common shares under our share repurchase  program.  As of
March 3, 2006 we have  approximately  3.8 million shares  remaining on our share
repurchase authorization.

     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 2, 2005.

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 first quarter that has  materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial  reporting.  As disclosed in our Annual Report on Form 10-K filed
with the Securities and Exchange Commission,  we have included Saucony,  Inc. in
our  review  and  evaluation  of  internal  controls  and  procedures  as of the
beginning of fiscal 2006.


<PAGE>


PART II - OTHER INFORMATION

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

<TABLE>
     Our  repurchases of equity  securities for the first quarter of fiscal 2006
were as follows:


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

December 3, 2005 - December 30, 2005         -        -          -     3,906,994

December 31, 2005 - February 3,2006          -        -          -     3,906,994

<S>      <C>             <C>           <C>       <C>       <C>         <C>
February 4, 2006 - March 3, 2006       108,500   $14.63    108,500     3,798,494
</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

Exhibit No.       Description of Exhibit

    2             Agreement and Plan of Merger among the Registrant, OC, Inc.
                  and Saucony, Inc. dated as of June 1, 2005.  This document
                  was filed as Exhibit 2.1 to the Registrant's Form 8-K on June
                  3, 2005 and is incorporated herein by reference.

    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 from
                  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.

  31.1*           Certification of the Company's Chief Executive Officer
                  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

  31.2*           Certification of the Company's Chief Financial Officer
                  pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002

  32.1*           Certification of the Company's Chief Executive Officer
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

  32.2*           Certification of the Company's Chief Financial Officer
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*Filed herewith


<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:  April 12, 2006               By:  /s/ Frank A. Caruso
                                    --------------------------
                                         Frank A. Caruso
                                         Chief Financial Officer