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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                     FORM 10-Q
(Mark One)

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

                For the quarterly period ended August 27, 1999

_____       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

              For the transition period from _______ to ______.

                        Commission File Number: 1-4404

                         THE STRIDE RITE CORPORATION

            (Exact name of registrant as specified in its charter)

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

       191 Spring Street, P. O. Box 9191 Lexington, Massachusetts 02420
             (Address of principal executive offices) (Zip Code)

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

         Securities registered pursuant to Section 12(b) of the Act:

                                            Name of each exchange
       Title of each class                  on which registered
       Common stock, $.25 par value         New York Stock Exchange

       Preferred Stock Purchase Rights      New York Stock Exchange

      Securities registered pursuant to Section 12(g) of the Act:  None

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

                                Yes X No ____

      As of October 6, 1999, 45,999,962 shares of the Registrant's common stock,
$.25 par value,  and the  accompanying  Preferred  Stock  Purchase  Rights  were
outstanding.



<PAGE>




PART I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements

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

<TABLE>
                                           August 27,
                                             1999        November 27,
                                          (Unaudited)        1998
                                          ----------     -----------
<CAPTION>
  Assets

  Current Assets:
<S>                                         <C>            <C>
    Cash and cash equivalents               $ 44,558       $ 42,427

    Accounts and notes receivable,net         86,166         56,475

    Inventories                               98,578        128,472

    Deferred income taxes                     25,796         24,758

    Prepaid expenses                           3,392          6,097
                                            --------        -------

    Total current assets                     258,490        258,229

  Property and equipment,net                  65,865         58,350

  Other assets                                23,675         18,917
                                            --------        -------

    Total assets                            $348,030       $335,496
                                            ========       ========


</TABLE>



















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


                                      2


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

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

<TABLE>
                                               August 27,
                                                  1999         November 27,
                                              (Unaudited)          1998
                                              -----------      ------------
<CAPTION>
   Liabilities and Stockholders' Equity

   Current Liabilities:
<S>                                            <C>               <C>
     Accounts payable                          $ 21,394          $ 40,951
     Income taxes payable                        24,822            14,130
     Accrued expenses and other
      liabilities                                31,761            29,646
                                               ---------         --------
     Total current liabilities                   77,977            84,727

   Deferred income taxes                          6,134             6,042


   Stockholders' Equity:
     Preferred stock, $1.00 par value
      Shares authorized - 1,000,000
      Shares issued - none                            -                 -

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

     Capital in excess of par value              21,833            22,063

     Retained earnings                          357,003           337,943

     Less cost of 10,549,467 shares of
      common stock held in treasury
     (10,565,526 on November 27, 1998
      and 10,051,557 on August 28,1998)        (129,154)         (129,516)
                                               ---------         ---------

     Total stockholders' equity                 263,919           244,727
                                               ---------         ---------

     Total liabilities and
      stockholders' equity                     $348,030          $335,496
                                               =========         ========
</TABLE>


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





                                      3


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                         THE STRIDE RITE CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
          For the periods ended August 27, 1999 and August 28, 1998
                     (In Thousands Except Per Share Data)

<TABLE>
<CAPTION>
                                    Three Months Ended      Nine Months Ended
                                  August 27,  August 28,  August 27,  August 28,
                                     1999        1998        1999        1998
                                 -----------  ----------  ----------  ----------

<S>                               <C>          <C>        <C>          <C>
  Net sales                       $155,952     $168,516   $470,390     $440,677

  Cost of sales                     98,157      105,772    296,846      279,820

  Selling and
  administrative expenses           39,501       42,973    129,362      122,151

  Nonrecurring charge                3,254            -      3,254            -
                                  --------      -------   --------     --------

  Operating income                  15,040       19,771     40,928       38,706

  Other income(expense):
    Interest income                  1,920        1,022      3,585        2,795
    Interest expense                  (402)        (551)    (1,706)      (1,494)
    Other, net                        (187)          64       (834)       2,343
                                   --------     -------     -------     -------
                                     1,331          535      1,045        3,644
                                   --------     -------     -------     -------

  Income before income taxes        16,371       20,306     41,973       42,350

  Provision for income taxes         6,258        7,540     15,948       15,587
                                   --------     -------    -------      -------

  Net income                       $10,113     $ 12,766    $26,025     $ 26,763
                                   =======     ========    =======     ========

  Net income per common share:
     Diluted                         $ .22        $ .27      $ .56        $ .56
                                    ======       ======     ======       ======
     Basic                           $ .22        $ .27      $ .56        $ .57
                                    ======       ======     ======       ======

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

  Average common shares used in
     per share computations:
     Basic                          46,440       47,261     46,418       47,275
                                    =======     =======    =======      =======
     Diluted                        46,644       47,707     46,761       47,647
                                    =======     =======    =======      =======
</TABLE>


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




                                      4


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)
                         THE STRIDE RITE CORPORATION
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
        For the nine months ended August 27, 1999 and August 28, 1998
                              (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                       August 27,    August 28,
                                                         1999          1998
                                                       ----------    ----------
Cash was provided from (used for) Operations:
<S>                                                        <C>         <C>
  Net income                                               $26,025     $26,763
  Adjustments to reconcile to net cash provided
   from (used for)operations:
  Depreciation and amortization                              7,497       7,054
  Deferred income taxes, net                                  (946)        869
  Compensation expense related to executive stock plans        296         248
  Equity in loss (income) of affiliate                         813        (925)
  Loss(gain)on disposals of property and equipment             935      (3,255)
  Changes in:
   Accounts and notes receivable                           (29,691)    (50,088)
   Inventories                                              29,894      25,819
   Prepaid expenses                                          2,706          17
   Accounts payable, income taxes, accrued expenses
    and other current liabilities                           (7,393)    (15,134)
                                                           --------    --------
  Net cash provided from (used for) operations              30,136      (8,632)
                                                           --------    --------
Investments:
  Short-term investments                                         -       9,417
  Additions to property and equipment                      (15,804)    (13,045)
  Proceeds from sales of property and equipment                  -       8,342
  Purchase of noncurrent marketable securities                (320)     (1,666)
  Increase in other assets                                  (4,857)       (688)
                                                           --------    --------
  Net cash provided from (used for) investments            (20,981)      2,360
                                                           ---------   --------
Financing:
  Proceeds from sale of stock under stock plans                385       1,642
  Cash dividends paid                                       (6,961)     (7,082)
  Repurchase of common stock                                  (448)     (7,774)
                                                           --------    --------
  Net cash used for financing                               (7,024)    (13,214)
Net increase (decrease) in cash and cash equivalents         2,131     (19,486)
Cash and cash equivalents at beginning of period            42,427      41,663
                                                           --------    --------
Cash and cash equivalents at end of period                 $44,558     $22,177
                                                           ========    ========
</TABLE>



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







                                      5


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                         THE STRIDE RITE CORPORATION

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    NOTE 1

      The  financial  information  included in this Form 10-Q of The Stride Rite
Corporation (the "Company") for the periods ended August 27, 1999 and August 28,
1998 is  unaudited  and subject to year-end  audit  adjustments.  However,  such
information   includes  all   adjustments   (including   all  normal   recurring
adjustments) which, in the opinion of management, are considered necessary for a
fair presentation of the consolidated  results for those periods. The results of
operations for the nine-month  period ended August 27, 1999 are not  necessarily
indicative  of the results of  operations  that may be expected for the complete
fiscal year.  The  year-end  condensed  balance  sheet data was derived from the
Company's  audited  financial  statements,  but does not include all disclosures
required by generally accepted accounting principles.  The Company filed audited
consolidated  financial  statements for the year ended November 27, 1998 on Form
10-K  which  included  all   information   and  footnotes   necessary  for  such
presentation.

      The Company's  preparation  of financial  statements  in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of contingent  assets and  liabilities  at the dates of the financial
statements and the reported amounts of revenues and expenses during the reported
periods.  The most significant  estimates included in these financial statements
include valuation allowances and reserves for accounts receivable, inventory and
income taxes. Actual results could differ from those estimates.

                                    NOTE 2

      In the third quarter of 1999, the Company  recorded a nonrecurring  charge
in  connection  with the  Company's  realignment  of  corporate  and  divisional
operations.  The total  amount  of the  charge of  approximately  $3.2  million,
(amounting to $2.0 million  after taxes or $.04 per share),  is composed of $2.4
million related to employee termination payments, $0.6 million of other employee
related  costs,   and  $0.2  million  of  other  costs.   As  a  result  of  the
restructuring,  approximately  125 positions were  eliminated from the Company's
administrative staff.

                                    NOTE 3

      Basic earnings per share excludes dilution and is computed by dividing net
earnings  available to common  stockholders  by the weighted  average  number of
common shares  outstanding for the period.  Diluted  earnings per share reflects
the  potential  dilution  that could occur if options to issue common stock were
exercised.



                                      6


<PAGE>



PART I - FINANCIAL INFORMATION (Continued)

                         THE STRIDE RITE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               NOTE 3 - continued

      The  following  is a  reconciliation  of the number of shares  used in the
basic and diluted earnings per share computations (shares in thousands):

<TABLE>
<CAPTION>
                                    Three Months Ended      Nine Months Ended
                                  August 27,  August 28,  August 27,  August 28,
                                    1999        1998        1999        1998
                                  ----------  ----------  ----------  ----------
Net income applicable to common
<S>                                 <C>        <C>         <C>         <C>
shares                              $10,113    $12,766     $26,025     $26,763
                                    =======    =======     =======     =======

Calculation of shares:

  Weighted average number of common
    shares outstanding(basic)        46,440     47,261      46,418      47,275

  Common shares  attributable to
    assumed  exercise of dilutive
    stock options and stock
    purchase rights using the
    treasury stock method               204        446         253         372
                                     -------    -------    --------     -------

Average common shares and common
  equivalents outstanding during
  the period (diluted)               46,644     47,707      46,671      47,647
                                     =======    =======     =======    =======

Net income per common share (basic)   $ .22      $ .27       $ .56       $ .57
                                      =====      =====       =====       =====

Net income per common share (diluted) $ .22      $ .27       $ .56       $ .56
                                      =====      =====       =====       =====
</TABLE>


      The following  options were not included in the computation of diluted EPS
because the options' exercise price was greater than the average market price of
the common shares:

<TABLE>
<CAPTION>
                                      Third Quarter       First Nine Months
                                  -------------------  ------------------------
                                     1999       1998       1999        1998
                                  ---------  --------  -----------  -----------
 Options to purchase shares of
<S>                                 <C>          <C>      <C>           <C>
 common stock (in thousands)        2,494        268      2,463         369

</TABLE>









                                      7


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                         THE STRIDE RITE CORPORATION

CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS

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

Mature markets; Competition; Consumer Trends

      Our strategy for growth  depends upon  increasing  the  acceptance  of our
current brands in our major  markets,  expanding into new markets and increasing
the  number  of  footwear  products  and  brands  that we sell.  There can be no
assurance that we will be able to successfully  develop new branded  products or
acquire  existing brands from third  parities.  The bulk of our sales are in the
U.S. and Canada where the market is mature for many of our products. To grow our
business,  we must increase our market share at the expense of our  competitors,
and there can be no assurance we will be successful. Our efforts to expand sales
outside the U.S. and Canada may not succeed.

      The footwear industry  specifically,  and the fashion industry in general,
are subject to rapid and substantial  shifts in consumer tastes and preferences.
There are many competitors in our markets with  substantially  greater financial
resources,  production,  marketing  and product  development  capabilities.  Our
performance  may be  hurt by our  competitors'  product  development,  sourcing,
pricing,  innovation  and  marketing  strategies.  In  addition,  we expect  the
footwear  industry in the U.S. to continue  to  experience  substantial  foreign
competition.

      The fashion  industry and retail  industry is exposed to sudden  shifts in
consumer  trends and  consumer  spending,  on which our  results  are,  in part,
dependent.  Consumer  acceptance of our new products may fall below expectations
and the launch of new product lines may be delayed.  Our results are affected by
the buying plans of our customers in the wholesale business, which include large
department stores, as well as smaller retailers. Our wholesale customers may not
inform us of changes in their  buying  plans until it is too late for us to make
the necessary adjustments to our product lines and marketing  strategies.  While
we believe that  purchasing  decisions in many cases are made  independently  by
individual  stores  or  store  chains,  we  are  exposed  to a  decision  by the
controlling owner of a store chain, to decrease

                                      8


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                         THE STRIDE RITE CORPORATION

the amount of footwear products purchased from us. Moreover, the retail industry
periodically  experiences  consolidation.  We  face a risk  that  our  wholesale
customers  may  consolidate,  restructure,  reorganize  or realign in ways which
could  decrease the number of stores,  or the amount of shelf space,  that carry
our products. The impact that electronic commerce will have in the future on the
retail  industry is  uncertain,  but there is no assurance  that any such impact
will not adversely affect our business.

Inventory Obsolescence

      The fashion-oriented nature of our industry, the rapid changes in customer
preferences and the extended product  development and sourcing lead times,  also
leaves us vulnerable to an increased risk of inventory obsolesce.  While we have
in the past and believe we can in the future  successfully  manage this risk, if
we are unable to do so, our revenue and operating margins will suffer.

Retention of Major Brand License

      We have  derived  significant  revenues  and earnings in the past from our
exclusive licensing  arrangement with Tommy Hilfiger Licensing,  Inc. to produce
and sell Hilfiger  branded  footwear.  Our Hilfiger license expires December 31,
2001 and we have one  option to renew the  license  for an  addition  three-year
term.  Whether our license with  Hilfiger  will remain in effect  depends on our
achieving  certain  minimum sales levels for the licensed  products.  We believe
that our  relationship  with  Hilfiger is good and that we will be able to renew
the license at the end of the current term,  however,  there can be no assurance
that we will be able to do so. If we lose the  Hilfiger  license,  our  business
could be materially and adversely affected

Overseas Production and Raw Material Procurement

      We  purchase  substantially  all of our  product  lines and raw  materials
overseas  and  expect to do so for the  foreseeable  future.  Our  international
sourcing  subjects us to the risks of doing business abroad.  Such risks include
expropriation,  acts of war, political  disturbances,  political instability and
similar events,  including trade  sanctions,  loss of normalized trade relations
status, export duties, import controls,  quotas, and other trading restrictions,
as well as  fluctuations  in  currency  values.  Moreover,  we rely  heavily  on
independent third-party manufacturing facilities, primarily located in China, to
produce our products.  If trade  relations  between the U.S. and China, or other
countries in which we manufacture our products, deteriorate or are threatened by
instability,  our  business  may be adversely  impacted.  We cannot  predict the
effect that changes in the economic and political conditions in China could have
on the  economics  of doing  business  with Chinese  manufacturers.  Although we
believe that we could find  alternative  manufacturing  sources for our products
with independent third-party  manufacturing  facilities in other countries,  the
loss of a substantial portion of our Chinese manufacturing capacity could have a
material adverse effect on our business. Also, if we were required to relocate a
substantial  portion  of our  manufacturing  outside  of China,  there can be no
assurance  that we  could  obtain  as  favorable  economic  terms,  which  could
adversely affect our performance.

                                      9


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                         THE STRIDE RITE CORPORATION

Dependence on Logistical System

      Our business  operations  are dependent on our  logistical  system,  which
includes our computerized warehouse network, enabling us to procure our footwear
products from overseas manufacturers,  transport it to our warehouses,  store it
and  deliver it to our  customers  on time,  in the correct  size and styles.  A
disruption to the  logistical  system could  adversely  impact our business.  In
addition,  to improve overall efficiency,  we are in the process of changing the
computer  software  system that controls our order entry and  inventory  control
system.  While we expect that the implementation of the new software system will
go  smoothly,  if we  experience  problems  with such  implementation,  we could
experience  disruptions to our business that could have an adverse effect on our
business.

Intellectual Property Risk

      We believe that our patents and  trademarks  are important to our business
and are generally  sufficient to permit us to carry on our business as presently
conducted. We cannot, however, know whether we will be able to secure patents or
trademark  protection  for  our  intellectual  property  in the  future  or that
protection will be adequate for future  products.  Further,  we face the risk of
ineffective protection of intellectual property rights in the countries where we
source  and  distribute  our  products.  Finally,  we  cannot  be sure  that our
activities  will not  infringe on the  proprietary  rights of others.  If we are
compelled to prosecute infringing parties,  defend our intellectual property, or
defend ourselves from  intellectual  property claims made by others, we may face
significant expenses and liability.

Year 2000 Exposure

      Statements  of our  expectations  regarding  the current  status,  date of
completion and costs of our Year 2000  compliance  programs and the  anticipated
compliance of our major customers and suppliers are forward-looking  statements.
These  statements  are  our  best  estimates  based  on  information   currently
available.  Therefore,  they are inherently  subject to risks and  uncertainties
which could cause actual results to differ and which may have a material adverse
effect on our business,  financial position, results of operations or capital or
liquidity needs.














                                      10


<PAGE>



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

Results of Operations

      The following  table  summarizes the Company's  performance  for the third
quarter  and first nine months of fiscal 1999 as compared to the results for the
same periods in fiscal 1998:

<TABLE>
<CAPTION>
Increase (Decrease) Percent vs. 1998 Results:

                                                  Third Quarter   Nine Months

<S>                                                   <C>              <C>
Net sales                                             (7.5%)           6.7%
Gross profit                                          (7.9%)           7.9%
Selling and administrative expenses                   (8.1%)           5.9%
Operating income before nonrecurring charges          (7.5%)          14.1%
Operating income                                     (23.9%)           5.7%
Income before income taxes                           (19.4%)          (0.9%)
Net income                                           (20.8%)          (2.8%)
</TABLE>

Operating Ratios as a Percentage to Net Sales:

<TABLE>
<CAPTION>
                                              Third Quarter      Nine Months
                                              1999      1998    1999      1998

<S>                                            <C>      <C>      <C>      <C>
Gross profit                                   37.1%    37.2%    36.9%    36.5%
Selling and administrative expenses            25.3%    25.5%    27.5%    27.7%
Operating income before nonrecurring charges   11.7%    11.7%     9.4%     8.8%
Operating income                                9.6%    11.7%     8.7%     8.8%
Income before income taxes                     10.5%    12.1%     8.9%     9.6%
Net income                                      6.5%     7.6%     5.5%     6.1%
</TABLE>


Net Sales

      Net sales in the third quarter of fiscal 1999  decreased  $12.6 million or
7.5% versus the net sales level for the same period of fiscal 1998. In the third
quarter of fiscal 1999, revenues of the Company's wholesale businesses decreased
9.7%, while retail sales increased 6.3% from the same period in fiscal 1998. For
the first nine months of fiscal 1999, consolidated net sales were above the same
period of fiscal  1998 by $29.7  million or 6.7%.  Revenues  from the  Company's
wholesale businesses increased 6.5% during the first nine months of fiscal 1999.
Retail also increased, up 8% in the first nine months of 1999 as compared to the
same period in 1998.  With respect to the  wholesale  businesses of the Company,
unit shipments of current line merchandise  during the first nine months of 1999
were slightly higher than the comparable period in fiscal 1998. During the first
nine months of fiscal 1999, sales of discontinued  products were 12% higher than
the comparable period in fiscal 1998.

                                      11


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                        THE STRIDE RITE CORPORATION

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

     Keds sales in the third  quarter of fiscal 1999  decreased 20% from 1998 as
last year's sales had benefited from the strong sell-in of Keds updated  basics,
the Ready to Wear(R) and Relaxed Fit(R)  product lines.  In the third quarter of
1998,  Keds  sales  had  increased  49%  from  the  prior  year.  Sales  of Keds
Stretch(TM)  products,  which were introduced  during the third quarter of 1999,
generally  exceeded  retailer  expectations,  but the new line  could  not fully
offset  the lower  sales of the  updated  basics.  In  addition,  the Keds basic
Champion(R) style has continued to decline.  During the third quarter,  reorders
were weaker than last year as consumer  trends  appeared to be favoring  fashion
product  and open toe  footwear.  For the  first  nine  months,  Keds net  sales
decreased 1% compared to the same period in 1998, with the sales of current line
merchandise  down by 3% from 1998.  Sales of Keds women's  products  declined 8%
from the prior year, while children's product sales increased 9% from 1998.

     Sales of the Stride Rite  Children's  Group in the third  quarter of fiscal
1999 were flat with the third  quarter of 1998 as a 6% increase in retail  sales
was offset by a 5% decrease in sales to independent  accounts.  During the third
quarter of 1999, sales at comparable  company-owned retail stores increased 1.9%
from 1998.  For the first nine months of fiscal  1999,  sales of the Stride Rite
Children's  Group  increased  1% from the same  period  in 1998,  with  sales to
independent accounts down 5% and sales at company-owned retail stores up 8% from
the 1998 period. Sales at comparable  company-owned retail stores increased 5.2%
during the first nine months of 1999.  At the end of the third quarter of fiscal
1999, the Company operated 205 stores, up 5% from the 196 stores open at the end
of the third quarter in fiscal 1998.

     Sales of Tommy Hilfiger products in the third quarter of 1999 increased 20%
as  compared  to the same  period in 1998.  Sales for the first  nine  months of
fiscal 1999 for the Tommy  Hilfiger  division  increased  59% as compared to the
same period in 1998 as revenues  associated with the Tommy Hilfiger women's line
offset lower sales of Tommy  Hilfiger men's  products.  The lower men's revenues
were  predominantly  caused  by a 50%  reduction  in the  sales of  discontinued
styles.  Additionally,  product line changes away from higher priced  basketball
styles and more  competitive  market  conditions  resulted in an average selling
price in 1999 which was 6% lower than the first nine months of 1998.

     Compared to the same period in fiscal 1998,  sales of the Sperry  Top-Sider
division  increased  9% in the third  quarter  of fiscal  1999.  Sales of Sperry
products increased 11% for the first nine months of fiscal 1999 as the brand has
achieved success with newly introduced styles for the office casual market.  For
the  nine-month  period,  Sperry sales in 1999 were above 1998 levels across all
shoe categories, with sales of current line merchandise up 13%, and offsetting a
33% decrease in discontinued styles. International revenues in the third quarter
of 1999 were below the comparable period of 1998





                                      12


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                        THE STRIDE RITE CORPORATION

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

by $2.2 million or 26%, which was principally  the result of a restructuring  of
the Company's international operations that converted distribution  arrangements
to license agreements in certain  countries.  For the first nine months of 1999,
international  revenues  declined $3.7 million or 15% from the comparable period
of fiscal 1998.

      During the third quarter of fiscal 1998, the Company began shipping Levi's
men's and boys' products under a license agreement with Levi Strauss & Co. Sales
of Levi's  footwear  for the third  quarter of 1998 were $4 million.  In October
1998,  after  evaluating  the initial  retail  results and assessing the general
strength  of the Levi's  brand and  competitive  conditions  in the young  men's
footwear  market,  the  Company  and  Levi  Strauss  & Co.  mutually  agreed  to
discontinue  Levi's  footwear  at the end of the Fall 1998  season.  The Company
recorded a one-time, pre-tax charge of approximately $5 million ($.07 per share)
in the fourth quarter of fiscal 1998 to cover  estimated  losses on the disposal
of inventory and severance costs associated with this decision.

Gross Profit

     During the first nine months of fiscal 1999,  gross profit  increased $12.7
million,  a gain of 7.9% compared to the net sales increase of 6.7% for the same
period.  The consolidated gross profit percent for the first nine months of 1999
increased 0.4 percentage points, finishing at 36.9% in 1999 compared to 36.5% in
1998.  The gross profit  performance  in the third  quarter of 1999 was slightly
lower than the same period in fiscal  1998,  37.1% in 1999  compared to 37.2% in
the 1998  third  quarter.  In  1999,  the  Company's  gross  profit  performance
benefited  from a lower  inventory  obsolescence  provision.  In 1998, the gross
profit  performance  in the first nine months had been  impacted  negatively  by
increased  inventory  obsolescence  charges,  particularly in the Tommy Hilfiger
division,  and by sales allowances  related to the disappointing  Levi's product
line.  The  Company's  nine  month  gross  profit  performance  in 1998 was also
negatively  affected by $1.7 million in start-up  costs  related to new licensed
product  lines,  all of which began  shipping in the third quarter of 1998.  The
Company's LIFO provision had an unfavorable  impact on gross profit  comparisons
for the first nine months of 1999,  with LIFO  increasing  gross  profit by only
$0.1 million in 1999 compared to an increase of $2.7 million (0.6% of net sales)
in the  comparable  period of 1998.  In the third  quarter,  the LIFO  provision
increased  gross profit by $0.9 million  (0.6% of net sales) in 1999 compared to
an increase of $1.2 million (0.7% of net sales) in 1998.









                                      13


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                        THE STRIDE RITE CORPORATION

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

Operating Costs

     Selling and administrative expenses in the first nine months of fiscal 1999
were above the comparable  period of the prior year,  increasing $7.2 million or
5.9% as compared  to the  overall  increase in net sales of 6.7% during the same
period. Operating costs as a percentage of sales decreased from last year by 0.2
percentage  points in the first nine months  (27.5% in 1999 compared to 27.7% in
1998). In the third quarter of 1999,  operating  expenses decreased $3.5 million
or 8.1% from 1998 compared to the sales decline of 7.5%. In the third quarter of
1999, selling and administrative  expenses as a percent to net sales declined by
0.1 percentage  points as compared to the comparable  period of 1998.  Increased
spending in information  technology  continued in the third  quarter,  primarily
related to the costs of  installing  enhanced  systems and  achieving  year 2000
(Y2K)  compliance.  These efforts  resulted in additional  costs of $2.2 million
compared to 1998.  Operating costs in the first nine months of 1998 had included
$3 million of product  development  and other selling and  administrative  costs
related to the launch of the Levi's,  Tommy Hilfiger  women's and Nine West Kids
product  lines which began  shipping in the third  quarter of 1998.  Advertising
costs  increased by $3.2 million or 11% in the first nine months of fiscal 1999.
As a percentage of net sales,  advertising  expense represented 6.6% of sales in
the first nine months of 1999,  which was higher than the spending  rate of 6.3%
of sales in the comparable period in 1998. This higher spending level was due to
the increased  advertising  related to the Tommy Hilfiger  women's product line.
The increased costs in the 1999 nine-month  period were partially  offset by the
elimination of certain International division overhead costs of $2.3 million and
various other administrative expense decreases.

Nonrecurring Charges

     A nonrecurring charge of $3.2 million related to a realignment of corporate
and divisional operations was recorded in the third quarter of 1999, in order to
competitively   position  the  Company  for  future   expansion   and  increased
profitability.  The actions, which should be completed during the fourth quarter
of 1999,  include  the  consolidation  of  certain  merchandising,  finance  and
operations  functions,   resulting  in  the  elimination  of  approximately  125
positions from the Company's administrative staff.









                                     14


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                        THE STRIDE RITE CORPORATION

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

Other Income and Taxes

     Other  income  (expense)  increased  pre-tax  income by $1.0 million in the
first nine months of fiscal 1999  compared to an increase of $3.6 million in the
comparable period of 1998. In the first nine months of fiscal 1998, other income
included a pre-tax  gain of $3.8 million from the March 1998 sale of real estate
formerly  used  as  a  distribution   center  for  the  Company's   wholly-owned
subsidiary, Stride Rite Children's Group, Inc. Interest income in 1999 increased
$0.8 million for the first nine months of 1999 versus the  comparable  period in
1998.  Interest  expense  in the first  nine  months of 1999  increased  to $1.7
million compared to $1.5 million in 1998. Average  short-term  borrowings in the
first nine months of 1999 were $37.2 million,  up from the average borrowings of
$30.8 million in the comparable period of 1998.

     The  provision  for income taxes  increased  $0.4 million in the first nine
months of fiscal 1999 as compared to the similar period in fiscal 1998 primarily
due to a higher  effective  income tax rate,  38.0%  compared  to 36.8% in 1998.
Reduced tax savings related to a company-owned life insurance program caused the
higher effective tax rate in 1999.

Net Income

     Excluding one-time items in each year, net income for the nine-month period
increased 15%, $28 million in 1999 compared to $24.3 million in 1998. Net income
for the first nine  months of fiscal  1999 was  negatively  impacted by the $3.2
million (pre-tax)  nonrecurring  charge, while the comparable period of 1998 was
favorably  impacted  by the  one-time  gain from the sale of real estate of $3.8
million (pre-tax). Net income for the first nine months of fiscal 1999 decreased
$0.7  million,  down 2.8% from the  income  earned in the  comparable  period of
fiscal  1998.  The  Company's  after-tax  return on net sales in the first  nine
months of fiscal 1999 decreased by 0.6 percentage  points (5.5% of sales in 1999
compared to 6.1% in 1998).















                                      15


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                        THE STRIDE RITE CORPORATION

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

Liquidity and Capital Resources

     At August 27, 1999, the Company's balance sheet reflects a current ratio of
3.3 to 1 with no long-term  debt. The Company's cash and short-term  investments
totaled $44.6 million at the end of the latest quarter,  significantly above the
cash and  investments  total of $22.2 million at the end of the third quarter of
fiscal 1998. In 1999, other assets also included $10.8 million of investments in
intermediate-term,  fixed income instruments, even with the level of investments
at the end of third  quarter  1998.  During the first nine  months of 1999,  the
Company's  operations  generated  $30.1 million of cash,  compared to a negative
cash flow from operations of $8.6 million in the comparable period in 1998.

     At August  27,  1999,  receivables  and  inventory  levels  totaled  $184.7
million,  a decrease of $26 million or 12% from the $210.7  million asset amount
at the end of the first nine months of fiscal 1998. Accounts receivable of $86.2
million at the end of the third  quarter of 1999  decreased  15.4% from the 1998
amount,  a level of  decrease  above the sales  decline of 7.5% in the  quarter.
Inventories  at the end of the first nine months of 1999 were also  lower,  down
$10.3 million or 9.5% from the 1998 level.

     Additions to property and equipment totaled $15.8 million in the first nine
months of fiscal 1999 compared to $13 million in the same period of fiscal 1998.
A large portion of the Company's  capital  expenditures  over the last two years
has been related to upgrading  its  information  systems in order to prepare for
the Year 2000 transition.  Capital expenditures in the first nine months of 1998
had included $3.2 million in expenditures  related to the Company's  purchase of
its Huntington, Indiana distribution facility.

     On August  10,  1999,  the  Company's  Board of  Directors  authorized  the
repurchase of an  additional  two million  shares of common  stock.  This action
brought the  authorized  total to  2,242,000  shares  during  fiscal 1999 as the
Company  had  repurchased  1,758,000  shares  under a prior  two  million  share
authorization.  Through  October 5, 1999,  the Company has  repurchased  450,000
shares under these authorizations at an aggregate cost of $3.3 million,  leaving
1,792,000 shares authorized for future repurchases.













                                      16


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                        THE STRIDE RITE CORPORATION

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

Other Matters

      During the quarter, the Company continued its efforts to minimize the risk
of disruption from the "Year 2000 (`Y2K')  problem." This problem is a result of
computer  programs  having been written  using two digits  (rather than four) to
define the  applicable  year.  The  Company's  overall  plan to address  the Y2K
problem is described  more fully in its 1998 Annual Report on Form 10-K, and the
following is an update of the information included therein.

      Information Technology ("IT") Systems:

      Remediation efforts (including testing and certification) continued during
the first nine months of fiscal 1999 with  respect to the  Company's  previously
identified  "critical" and "important" IT business systems.  The majority of the
Company's systems have now been tested and are certified as Y2K compliant.

      Non-IT and Partner Systems:

      During the first nine months of 1999, the Company  continued its inventory
of  third  party  and   internal   embedded,   or  "non-IT"   systems.   Company
representatives  have  met  with  significant  sourcing  vendors  to  ensure  an
uninterrupted  supply of product  in the year 2000.  The  Company  has  compiled
detailed  information  regarding all of its significant  business  partners.  In
appropriate  cases,  the  Company has been  relying  upon  vendors'  testing and
certification  documents to validate that the related systems are Y2K compliant.
Where the Company does not have adequate  assurance that remediation  efforts by
third parties are on schedule, contingency plans are being developed to minimize
potential  disruption  from Y2K failures  experienced by our business  partners.
These plans include  avoidance of those partners who may present an unacceptable
level of risk. Validation efforts are expected to continue through October 1999.

      Contingency Planning:

      Contingency  planning  has  been  developed  on a case by case  basis  and
includes  encouraging  customers  to  place  orders  before  potential  business
disruptions,  manual intervention of processes or finding alternative suppliers.
There  are,   however,   many  variables  and   uncertainties   surrounding  the
effectiveness  of  contingency  planning.  Thus,  there is no certainty that the
Company's  contingency plans will be adequate to mitigate the materially adverse
effect related to a large scale Y2K failure.

                                      17


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                         THE STRIDE RITE CORPORATION

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

      Costs:

      Total anticipated expenditures related to the Y2K project are estimated at
approximately  $26.5 million,  of which  approximately $20 million is related to
new systems which are being capitalized. Total Y2K project costs expended during
the first nine months of 1999 amounted to approximately $9 million.







































                                      18


<PAGE>



Part II - OTHER INFORMATION

                        THE STRIDE RITE CORPORATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

        (a)   Exhibits                  Description of Exhibit
                     Exhibit No.
                         27             Financial Data Schedule

        (b)   Reports on Form 8-K
              On July 9, 1999, the Company filed a report on Form 8-K describing
              the  resignation  of James  A.  Eskridge  as  chairman  and  Chief
              Executive  officer of the Company.  The Board of  Directors  named
              Myles  J.  Slosberg  as  interim  Chairman  and  CEO  pending  the
              successful  search and  selection  of a new  Chairman and CEO. For
              additional information, reference is made to the Form 8-K filed on
              July 9, 1999.
































                                     19



<PAGE>


                        THE STRIDE RITE CORPORATION

                                 SIGNATURES


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

                                    THE STRIDE RITE CORPORATION
                                            (Registrant)

Date:  October 8, 1999              By:   /s/ John M. Kelliher
                                          --------------------
                                          John M. Kelliher
                                          Chief Financial Officer





































                                     20


<PAGE>


                        THE STRIDE RITE CORPORATION

                             INDEX TO EXHIBITS

Exhibit No.

                                                      Sequential Page No.
     27      Financial Data Schedule                        Page 22














































                                     21


<PAGE>