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                      SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q
(Mark One)

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

For the quarterly period ended September 1, 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 date September 30, 2006, 36,095,427 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>
                                 September 1,                     September 2,
                                     2006          December 2,        2005
                                 (Unaudited)         2005         (Unaudited)
                                -------------    -------------  --------------

  Assets

  Current Assets:
     Cash and cash
<S>                                 <C>              <C>             <C>
       equivalents                  $24,346          $33,094         $92,281

     Accounts and notes
       receivable, net               91,967           63,368          70,440

     Inventories                    118,463          116,095          86,171

     Deferred income taxes           13,748           14,211          16,363

     Other current assets             7,462           25,918           7,067
                                    -------          -------         -------

     Total current assets           255,986          252,686         272,322

  Property and equipment, net        52,253           51,367          50,964

  Goodwill                           56,893           56,729             908

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

  Other assets, net                  17,354           19,482          11,441
                                    -------          -------         -------

     Total assets                  $441,076         $438,854        $337,325
                                   ========         ========        ========
</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>
                                    Sept. 1,                           Sept. 2,
                                      2006          December 2,         2005
                                  (Unaudited)          2005         (Unaudited)
                                ---------------  --------------  ---------------

  Liabilities and Stockholders' Equity

  Current Liabilities:
<S>                                     <C>             <C>           <C>
     Accounts payable                   $21,961         $24,186       $12,843
     Income taxes payable                 1,126          12,845        19,135
     Accrued expenses and other
       liabilities                       30,802          35,991        23,553
                                         ------          ------     ---------
     Total current liabilities           53,889          73,022        55,531

  Long term debt                         55,000          60,000             -
  Deferred income taxes                  23,156          23,980           303
  Pension obligation and other
       long-term liabilities             16,812          15,174        12,867

  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 -
        36,087,552 on
        September 1, 2006,
        36,499,403 on
        December 2, 2005 and
        36,247,259 on
        September 2, 2005                 9,022           9,125          9,062

     Capital in excess of par
       value                             21,771          18,434          9,212

    Retained earnings                   268,924         248,586        259,372
    Accumulated other
        comprehensive loss               (7,498)         (9,467)         (9,022)
                                        -------         -------        --------

     Total stockholders' equity         292,219         266,678        268,624
                                        -------         -------        -------

     Total liabilities and
       stockholders' equity            $441,076        $438,854       $337,325
                                       ========        ========       ========
</TABLE>

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


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION
<TABLE>
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
        For the periods ended September 1, 2006 and 2005September 2, 2005
                    (In thousands, except for per share data)

<CAPTION>
                          Three Months Ended            Nine Months Ended
                      ---------------------------   ---------------------------

                      Sept. 1,       Sept. 2,       Sept. 1,       Sept. 2,
                        2006           2005           2006           2005
                    -------------  ------------   ------------  -------------

<S>                   <C>            <C>            <C>           <C>
Net sales             $177,521       $146,237       $554,944      $456,469

Cost of sales          103,656         88,047        325,568       272,536
                      --------       --------       --------      --------

Gross profit            73,865         58,190        229,376       183,933

Selling and
  administrative
  expenses              58,901         47,136        178,102       141,615
                      --------       --------       --------      --------

Operating income        14,964         11,054         51,274        42,318


Investment income          474            441          1,294         1,120
Interest expense        (1,077)           (84)        (3,628)         (255)
Other (expense)
income                     (80)           338           (236)          200
                      ---------      --------       ---------     --------
                          (683)           695         (2,570)        1,065

Income before
  income taxes          14,281         11,749         48,704        43,383

Provision for
  income taxes           5,797          4,034         15,042        15,755
                      --------       --------       --------      --------

Net income              $8,484         $7,715        $33,662       $27,628
                      ========       ========       ========      ========

Net income per
  common share:
   Diluted              $  .23         $  .21        $   .90       $   .74
                      ========       ========       ========      ========
   Basic                $  .23         $  .21        $   .92       $   .76
                      ========       ========       ========      ========

Dividends per
  common share          $  .06         $  .06        $   .18       $   .17
                      ========       ========       ========      ========

Average common
  shares used in
  per share
  computations:
   Diluted              37,138         37,396         37,458        37,188
                      ========       ========       ========      ========
   Basic                36,261         36,292         36,504        36,158
                      ========       ========       ========      ========

</TABLE>


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


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION
<TABLE>
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
        For the nine months ended September 1, 2006 and September 2, 2005
                                 (In thousands)
<CAPTION>
                                                        2006             2005
                                                    --------------   -------------
Cash flows from operating activities:
<S>                                                   <C>              <C>
   Net income                                         $33,662          $27,628
   Adjustments to reconcile net income to net
     cash used  by operating activities:
   Depreciation and amortization                       11,411            9,481
   Deferred income taxes                                 (485)          (3,425)
   Compensation expense related to stock plans          2,199              568
   Gain related to long-term investments                    -              (61)
   Loss on disposals of property and equipment            436              152
   Changes in:
      Accounts and notes receivable                   (28,206)         (22,649)
      Inventories                                      (1,727)           1,633
      Other current assets                             10,344            8,307
      Other current liabilities                       (16,605)          (3,102)
      Other long-term assets                            1,939           (2,167)
      Other long-term liabilities                       1,579              (25)
   Contribution to pension plan                             -           (3,000)
                                                    ---------        ---------
      Net cash provided by operating activities        14,547           13,340
                                                    ---------        ---------

Cash flows from investing activities:
   Additions to property and equipment                (12,692)          (6,351)
   Purchase of minority interest in Saucony
     Canada, Inc.                                        (853)               -
   Investments in marketable securities
     available for sale                                     -          (29,325)
   Proceeds from sale of asset held for sale            7,504                -
   Proceeds from sale of marketable securities
     available for sale                                     -          100,175
   Distributions from long-term investments                 -               61
                                                    ---------        ---------
      Net cash (used in) provided from
        investing activities                           (6,041)          64,560
                                                    ----------       ---------

Cash flows from financing activities:
   Borrowings under revolving credit facility         107,300                -
   Payments under revolving credit facility          (112,300)               -
   Proceeds from sale of stock under stock plans        3,261            7,628
   Tax benefit in connection with exercise of
     stock options                                        740                 -
   Cash dividends paid                                 (6,590)          (5,772)
   Repurchase of common stock                         (10,850)          (7,771)
                                                    ----------       ----------
      Net cash used in financing activities           (18,439)          (5,915)
                                                    ----------       ----------

Effect of exchange rate changes on cash and
      cash equivalents                                  1,185              291
                                                    ---------        ---------

Net (decrease) increase in cash and cash
     equivalents                                       (8,748)          72,276

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

Cash and cash equivalents at end of the period        $24,346          $92,281
                                                    =========        =========
</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  September  1,  2006  and
September  2,  2005  is  unaudited,   however,  such  information  includes  all
adjustments  (including only and all normal recurring adjustments) which, in the
opinion of management,  are considered  necessary for a fair presentation of the
consolidated  results  for those  periods.  The  results of  operations  for the
periods  ended  September  1, 2006 and  September  2,  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
accounting  principles  generally accepted in the United States of America.  The
Company  previously  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.

     Certain  reclassifications  have  been made to the  condensed  consolidated
balance sheet at September 2, 2005 to conform with current  period and 2005 year
end presentation.

     Effective July 1, 2004, new  capitalization  rules under the  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 balance sheet as of September 2, 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
accounting   principles   generally  accepted  in  the  United  States  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  reporting  periods.  The Company's  significant
estimates included in these financial  statements  include valuation  allowances
and reserves for accounts receivable; sales returns allowances; markdowns (which
reduce revenues);  inventory valuation; 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 (the "ESPP").
Amending the ESPP,  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  are able to  authorize  the
Company to withhold up to 10% of their  earnings  during  consecutive  six month
payment periods for the purchase of shares. Effective at the commencement of the
January 1, 2006 withholding  period, the 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.  Prior to the  January  1,  2006  withholding  period,
associates could 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.  During the first nine months ended September 1, 2006, a
total of 76,054  shares were issued  under the Plan for an  aggregate  amount of
$935,911.  At September 1, 2006, a total of 5,936,212  shares had been purchased
under the Plan since inception and 203,788 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 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 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 September 1, 2006, the issuance of
130,742  shares has been deferred by  participating  directors.  At September 1,
2006, 132,283 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 June 2, 2006,  1,710,068  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. Stock awards, which are limited to 1,000,000 shares
in the Plan, generally vest over a four-year period.

<TABLE>
     A summary of the activity in share based  compensation  with respect to all
plans for the nine months ended September 1, 2006 are as follows:

<CAPTION>
                                             Number of
                                            Options and
                                            Restricted          Weighted Average
                                              Shares            Exercise Price
--------------------------------------------------------------------------------
<S>                                          <C>                      <C>
Outstanding at December 2, 2005              3,697,847                $ 8.98
Granted                                        974,228                 11.51
Exercised                                     (341,389)                 7.04
Canceled                                       (87,520)                12.23
                                             ----------               ------
Outstanding at September 1, 2006             4,243,166                $ 9.64
                                             =========                ======
</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 September 1, 2006:

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

<S>                 <C>          <C>           <C>    <C>
$5.00-$6.88         1,180,854    4.2 years     $ 5.93 $ 9,408,807
$7.38-$11.00        1,080,395    5.9 years       8.53   5,804,247
$11.01-$12.06       1,122,417    6.1 years      11.58   2,604,388
$12.13-$14.95         859,500    6.4 years      13.62     240,660
                    ---------    ---------     ------ -----------
                    4,243,166    5.6 years     $ 9.64 $18,058,102
                    =========    =========     ====== ===========
</TABLE>


<TABLE>
     The following table summarizes  information about stock options exercisable
at September 1, 2006:

<CAPTION>
                                Weighted
                                Average       Weighted
     Range of                   Remaining     Average    Aggregate
     Exercise        Number    Contractual    Exercise   Intrinsic
     Prices       Exercisable      Life        Price      Value
     --------     -----------  -----------    --------   ---------
<S>                 <C>          <C>           <C>    <C>
$5.00-$6.88         1,069,161    4.1 years     $ 6.55 $ 7,856,274
$7.38-$11.00        1,040,229    5.8 years       8.45   5,671,731
$11.01-$12.06         511,140    6.2 years      11.39   1,284,947
$12.13-$14.95          54,600    3.1 years      12.27      88,840
                    ---------    ---------     ------ -----------
                    2,675,130    5.2 years     $ 8.33 $14,901,792
                    =========    =========     ====== ===========
</TABLE>


     In December 2004, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No.  123(R),  "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 is recognized  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 are generally recognized to expense 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  (described  earlier in this footnote)  resulted in
the plan becoming non-compensatory under SFAS No. 123R.



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     Share-based  compensation costs were $639 thousand and $2.2 million for the
three and nine months  ended  September  1, 2006,  respectively.  The portion of
share-based  compensation  costs  included in cost of sales in the  accompanying
condensed consolidated statements of income for the three months and nine months
ended September 1, 2006 was $111 thousand and $339 thousand,  respectively.  The
portion of share-based compensation costs included in selling and administrative
expenses in the accompanying condensed consolidated statements of income for the
three  and nine  months  ended  September  1,  2006 was $528  thousand  and $1.9
million,   respectively.   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  and nine  months  ended  September  1,  2006 was $278
thousand and $928 thousand, respectively.

     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 and nine
months ended September 2, 2005:

<TABLE>
                                   Three          Nine
                                   Months        Months
                                   Ended          Ended

<CAPTION>
                                  Sept. 2,        Sept. 2,
                                    2005            2005
                                 -----------    -----------

<S>                               <C>           <C>
Net income, as reported           $7,715        $27,628

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

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

Pro forma net income              $7,190        $26,208
                                 =======        =======

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

   Diluted - as reported          $  .21        $   .74
                                 =======        =======
   Diluted - pro forma            $  .19        $   .70
                                 =======        =======
</TABLE>




<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     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 nine months  ended  September  1, 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 and the resulting weighted average fair value:



<TABLE>
                                       Nine Months Ended
                                       -----------------
<CAPTION>
                                        Sept. 1,   Sept. 2,
                                          2006       2005
                                          ----       ----

<S>                                        <C>       <C>
Risk-free interest rate                    4.36%     3.47%
Dividend yield                              1.8%      1.7%
Volatility factor                          30.6%     35.0%
Weighted average
   expected life of options (years)          4.8       4.9
Weighted average grant date fair
    value of options                       $3.88     $3.35
</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 both 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 the term of the expected life of the option 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.

     Total  unrecognized  share-based  compensation  costs related to non-vested
stock  options was  approximately  $5.4  million as of  September  1, 2006 which
related to  approximately  1.9 million shares with a per share weighted value of
$2.85.  This  unrecognized  cost is  expected to be  recognized  over a weighted
average  period of  approximately  3.0  years.  The  intrinsic  value of options
exercised  during  the  three  and  nine  months  ended  September  1,  2006 was
approximately $78 thousand and $1.8 million, respectively.



<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.

<TABLE>
     The  following is a  reconciliation  of the basic and diluted  earnings per
share computations based on the number of shares used in the calculations:

<CAPTION>
                                        Three Months             Nine Months
                                            Ended                   Ended
                                   -----------------------  --------------------
                                    Sept.1,      Sept.2,     Sept.1,    Sept.2,
                                      2006         2005        2006       2005
                                   -----------  ----------  ---------  ---------
                                     (In thousands, except for per share data)
<S>                                    <C>          <C>       <C>        <C>
Net income                             $8,484       $7,715    $33,662    $27,628


Weighted average common shares
outstanding (basic)                    36,261       36,292     36,504     36,158

Dilutive effect of stock options          877        1,104        954      1,030
                                       ------       ------     ------     ------

Weighted average common shares
  outstanding (diluted)                37,138       37,396     37,458     37,188
                                       ======       ======     ======     ======

Earnings per common share:
   Basic                                 $.23         $.21       $.92       $.76
                                       ======       ======     ======     ======

   Diluted                               $.23         $.21       $.90       $.74
                                       ======       ======     ======     ======
</TABLE>


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

                                                                  First Nine
<CAPTION>
                                          Third Quarter             Months
                                        -------------------  ------------------
                                           2006       2005      2006      2005
                                        --------  ---------  --------  --------
                                                    (In thousands)
Options to purchase shares of common
<S>                                       <C>           <C>    <C>           <C>
  stock                                   1,399          -     1,238         4

</TABLE>




<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - Comprehensive Income

<TABLE>
      Comprehensive income is as follows:

<CAPTION>
                                        Three Months             Nine Months
                                           Ended                    Ended
                                   -----------------------  --------------------
                                   Sept. 2,      Sept. 1,   Sept. 2,    Sept. 1,
                                     2005          2006       2005        2006
                                   ----------  -----------  ----------  --------
                                                   (In thousands)
<S>                                 <C>         <C>         <C>         <C>
Net income                          $7,715      $8,484      $27,628     $33,662

Other comprehensive income:
Foreign currency translation
adjustments                            201          89          376       1,969
                                   -------     -------      --- ---     -------

Total comprehensive income          $7,916      $8,573      $28,004     $35,631
                                   =======     =======      =======     =======
</TABLE>


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

<CAPTION>
                                    Sept. 1,         December 2,       Sept. 2,
                                      2006               2005            2005
                                 ---------------  ----------------  ------------
                                                  (In thousands)
Foreign currency  translation
<S>                               <C>                 <C>              <C>
   adjustments                    $ 1,916             $   (53)         $   211
Minimum pension liability
   adjustments, net of taxes       (9,414)             (9,414)          (9,233)
                                 ---------            --------         ---------
Accumulated other
   comprehensive loss             $(7,498)            $(9,467)         $(9,022)
                                 =========            ========         =========
</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  recorded  accruals
related  to 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.

     Adjustments  to the  estimates  and  assumptions  used  in the  preliminary
purchase  price result in an offsetting  adjustment to acquired  goodwill in the
year  following  the  acquisition.  The  adjustment  to the  acquisition-related
severance   accrual   results  from  reductions   based  on  fewer   involuntary
terminations   and   modifications   to  the   original   estimates   based   on
actual-severance payments.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

<CAPTION>
                                              Acquisition    Acquisition
                                                Related        Related
(In thousands)                                 Severance      Exit Costs
-------------------------------------------   -------------  -------------
<S>             <C>                               <C>              <C>
Balance at June 2, 2006                           $  189           $361
Utilization                                         (182)          (192)
Adjustments                                           (7)             -
Foreign currency translation impact                    -              -
                                                  ------           ----
Balance at September 1, 2006                      $    -           $169
                                                  ======           ====
</TABLE>

     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 the  future  financial  condition  or  operating  results  of the
Company.

<TABLE>
                                        Pro forma             Pro forma
                                        ---------             ---------
<CAPTION>
                                   Three Months Ended     Nine Months Ended
                                     Sept. 2, 3005          Sept. 2, 2005
              In thousands             (Unaudited)            (Unaudited)
              ----------------------------------------------------------------
<S>                                       <C>                   <C>
              Revenue                     $186,403              $571,667

              Operating Income              13,865                49,925

              Net income                  $  8,796              $ 27,336
                                          ========              ========

              Earnings per
              common share:
              Basic                       $   0.24              $   0.76
                                          ========              ========
              Diluted                     $   0.24              $   0.74
                                          ========              ========
</TABLE>




<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The pro  forma  information  was  prepared  by  combining  Saucony,  Inc.'s
unaudited  condensed  consolidated  statements  of income for the  thirteen  and
thirty-nine  weeks  ended  July 1, 2005 and the  Company's  unaudited  condensed
consolidated  statements of income for the three and nine months ended September
2, 2005.  For the  purposes of  presenting  comparable  pro forma  results,  the
unaudited condensed  consolidated  statement of income for the thirty-nine weeks
ended July 1, 2005 was created by combining  the  unaudited  statement of income
for the  twenty-six  weeks  ending July 1, 2005 to the  unaudited  statement  of
income for the thirteen weeks ended December 31, 2004. Included in the unaudited
statement  of income for the thirteen  weeks  ending  December 31, 2004 were net
sales of $33.1 million,  gross profit of $13.5  million,  and a net loss of $316
thousand.  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 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 three and nine months ended September 1, 2006,  borrowings under
this Credit  Agreement  averaged $64.2 million and $76.8 million,  respectively,
with a maximum  amount  outstanding  of $101.0  million.  The  weighted  average
interest  rate on these  borrowings  during  the  three  and nine  months  ended
September 1, 2006 was 6.6% and 6.1%,  respectively.  On  September 1, 2006,  $55
million was  outstanding  under the revolver.  Cash interest  payments were $1.1
million  and $3.5  million,  respectively,  in the three  months and nine months
ended September 1, 2006. There were no borrowings outstanding at any time during
the third quarter of the prior fiscal year.  The Company was in compliance  with
its covenants as of September 1, 2006.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - Benefit Plans

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

<CAPTION>
                                     Three Months Ended     Six Months Ended
                                   ---------------------  ---------------------
                                      Sept.1,    Sept.2,    Sept.1,    Sept.2,
                                       2006        2005       2006       2005
                                     ----------  ---------  ---------  ----------
                                                   (In thousands)
<S>                                       <C>      <C>        <C>      <C>
Service cost                              $570     $506       $1,710   $1,566
Interest cost                            1,029      943        3,087    2,853
Expected return on assets              (1,143)   (1,117)     (3,429)   (3,357)
Net loss recognized                        510      476        1,530    1,486
Amortization of prior services cost          3        4            8       14
                                       -------   -------     -------   ------

Net periodic benefit cost                 $969     $812       $2,906   $2,562
                                       =======   =======     =======   ======
</TABLE>

     During the first nine months of fiscal 2006, no contributions  were made to
the Company's  defined  benefit pension plan. At this time, the Company does not
plan on making 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 the
Company's  business.  The Tommy  Hilfiger  footwear  sales are contingent on the
Company's licensing agreement with Tommy Hilfiger Licensing,  Inc. In July 2006,
the Company amended the terms of the current license  agreement,  which extended
the term of the agreement to expire in March 2008. Whether the Company's license
with  Tommy  Hilfiger  will  remain in  effect  depends  in part on the  Company
achieving  certain minimum sales levels for the licensed  products.  The Company
continues  to expect to meet the  minimum  sales  levels  required  by the Tommy
Hilfiger license agreement.  The Company believes that no provision is currently
required for costs related to the potential  loss of this license.  If the Tommy
Hilfiger  license  is lost,  the  Company's  business  would be  materially  and
adversely  affected.  Revenues  derived from our Tommy  Hilfiger  licenses  were
approximately  $21 million  and $73 million for the three and nine months  ended
September  1, 2006.  This  revenue is  included in the Tommy  Hilfiger  Footwear
segment,  the Other Wholesale  Footwear  segment  (specifically  the Stride Rite
International division), Stride Rite Children's Group - Retail Division, and the
Stride Rite Children's Group - Wholesale Division.

     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  2005.  The  liability  as of  September  1,  2006 is
$1,868,000 and is included as in accrued  expenses and other  liabilities 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


<PAGE>



PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

upon  available information  after consultation  with  environmental  engineers,
consultants   and  attorneys   assisting   the  Company  in   addressing   these
environmental issues.  Actual costs 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 third quarter of the fiscal
2006, there were $39 thousand of expenses charged against the reserve.

Note 8 - Income Taxes

     During the second  quarter of fiscal 2006, a state tax audit was  concluded
for which the Company had established  reserves in prior periods. The outcome of
the tax audit was favorable and resulted in a net tax benefit of $4.2 million of
prior  period tax reserve  reversals.  The  reversals  positively  impacted  the
effective income tax rate for the nine months ended September 1, 2006 by 8.5%.

Note 9 - Operating Segments and Related Information

     In  September  2005 the Company  acquired  Saucony,  Inc.  During the first
quarter of fiscal 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, which occurred 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 (15 stores as of
September 1, 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.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     As a result of the  adoption  of SFAS No. 123R at the  beginning  of fiscal
2006,  stock-based  compensation  costs of $0.6  million  and $2.2  million  are
included in the operating  loss of the  Unallocated  Corporate and Other segment
for the three and nine months ended September 1, 2006, respectively.  See Note 1
for further information.

<TABLE>
     The following  table  summarizes  the results of the  Company's  reportable
segments for the three months ended  September 1, 2006 and September 2, 2005 and
identifiable assets as of September 1, 2006 and September 2, 2005:

<CAPTION>
              Stride      Stride
              Rite        Rite
Three months  Children's  Children's  Tommy     Other     Unallocated
ended Sept.   Group -     Group -     Hilfiger  Wholesale Corporate
1, 2006       Retail      Wholesale   Footwear  Footwear   & Other  Consolidated
              -------------------------------------------------------------

Sales          $56,545    $27,311     $11,565   $86,465         -   $181,886

Intercompany
sales                -        (43)       (818)   (3,504)        -     (4,365)

Net sales to
external
customers      $56,545    $27,268     $10,747   $82,961         -   $177,521
              ==============================================================
Operating
income
<S>             <C>        <C>          <C>      <C>      <C>        <C>
  (loss)        $6,097     $5,654       $(599)   $6,380   $(2,568)   $14,964

Interest and
other,
net                  -          -           -         -      (683)      (683)
              ---------------------------------------------------------------

Income
(loss)before
income
taxes           $6,097     $5,654       $(599)   $6,380   $(3,251)   $14,281
              ==============================================================

Total assets   $46,574    $59,550     $14,530  $269,920   $50,502   $441,076
              ==============================================================

</TABLE>


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
              Stride      Stride
              Rite        Rite
Three months  Children's  Children's  Tommy     Other     Unallocated
ended Sept.   Group -     Group -     Hilfiger  Wholesale Corporate
2, 2005       Retail      Wholesale   Footwear  Footwear   & Other  Consolidated
              -------------------------------------------------------------

Sales         $48,193     $29,169     $18,186   $53,511         -   $149,059

Intercompany
sales               -         (26)     (1,207)   (1,589)        -     (2,822)
              --------------------------------------------------------------

Net sales to
external
customers     $48,193     $29,143     $16,979   $51,922         -   $146,237
              ==============================================================

Operating
income
<S>            <C>         <C>          <C>      <C>      <C>        <C>
(loss)         $4,883      $5,560       $(478)   $3,873   $(2,784)   $11,054

Interest and
other,
net                 -           -           -         -       695        695
              --------------------------------------------------------------

Income
(loss)
before
income
taxes          $4,883      $5,560       $(478)   $3,873   $(2,089)   $11,749
              ==============================================================

Total assets  $41,802    $139,881     $19,607   $79,993   $59,359   $340,642
              ==============================================================

</TABLE>


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
     The following  table  summarizes  the results of the  company's  reportable
segments for the nine months ended September 1, 2006 and September 2, 2005:

<CAPTION>
              Stride      Stride
              Rite        Rite
              Children's  Children's  Tommy     Other    Unallocated
Nine months   Group -     Group -     Hilfiger  Wholesale Corporate
ended Sept.   Retail      Wholesale   Footwear  Footwear  & Other   Consolidated
1, 2006
-------       ------------------------------------------------------------------

Sales         $150,258    $66,758     $41,081  $307,666        -    $565,763

Intercompany
sales                -        (97)     (2,220)   (8,502)       -     (10,819)
              ----------------------------------------------------------------

Net sales to
external
customers     $150,258    $66,661     $38,861  $299,164        -    $554,944
              ===============================================================

Operating
income
<S>            <C>         <C>        <C>       <C>      <C>         <C>
(loss)         $12,255     $9,906     $(1,697)  $40,521  $(9,711)    $51,274

Interest and
other,
net                  -          -           -         -   (2,570)     (2,570)
              ----------------------------------------------------------------

Income
(loss)
before
income
taxes          $12,255     $9,906     $(1,697)  $40,521 $(12,281)    $48,704
              ===============================================================


              Stride      Stride
              Rite        Rite
Nine months   Children's  Children's  Tommy     Other     Unallocated
ended Sept.   Group -     Group -     Hilfiger  Wholesale  Corporate
2, 2005       Retail      Wholesale   Footwear  Footwear   & Other Consolidated
-----------   ---------------------------------------------------------------

Sales         $129,615    $74,247     $60,864  $200,246        -    $464,972

Intercompany
sales                -        (77)     (3,001)   (5,425)       -      (8,503)
              ---------------------------------------------------------------

Net sales to
external
customers     $129,615    $74,170     $57,863  $194,821        -    $456,469
              ===============================================================

Operating
income
(loss)          $9,985    $11,379     $(1,149)  $29,500  $(7,397)    $42,318

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

Income
(loss)
before
income
taxes           $9,985    $11,379     $(1,149)  $29,500  $(6,332)    $43,383
              ===============================================================

</TABLE>


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 10 - Recent Accounting Pronouncements

     In  March  2005,  FASB  issued  FASB   Interpretation   No.  47("FIN  47"),
"Accounting for Conditional Asset Retirement Obligations",  an interpretation of
SFAS No. 143,  "Accounting for Asset Retirement  Obligations"  ("SFAS No. 143").
FIN 47 clarifies that a "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 flows.

     In September  2006,  the Securities  and Exchange  Commission  issued Staff
Accounting Bulletin ("SAB") No. 108 which provides interpretations regarding the
process of quantifying  prior year  financial  statement  misstatements  for the
purposes of a  materiality  assessment.  SAB No. 108 provides  guidance that the
following  two  methodologies  should  be used to  quantify  prior  year  income
statement  misstatements:  i) the error is quantified as the amount by which the
income  statement is misstated and ii) the error is quantified as the cumulative
amount by which  the  current  year  balance  sheet is  misstated.  SAB No.  108
concludes that a Company  should  evaluate  whether a  misstatement  is material
using  both  of  these  methodologies.   The  interpretation  is  effective  for
evaluations made on or after November 15, 2006.

Note 11 - Subsequent Event

     On September 5, 2006, the Company  purchased all of the outstanding  shares
of three  holding  companies  that,  together  with their  direct  and  indirect
subsidiaries,  constitute  the Robeez Group  ("Robeez")  for a purchase price of
approximately  $27.5  million.  The  Company  financed  the  acquisition  with a
combination  of cash on hand and  existing  credit  facilities.  The  results of
Robeez'  operations  will be included in the  Company's  consolidated  financial
statements  from the date of  acquisition.  Robeez is based in Burnaby,  British
Columbia,  Canada and is the world's leading manufacturer of soft-soled footwear
for newborns to children age four.


<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
Section 27A of the  Securities  Act of 1933, as amended,  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 identify forward-looking statements.  Investors are
cautioned that  forward-looking  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  possible  failure  to retain the Tommy  Hilfiger  footwear
license;  increased  leverage  from the  financing  of our recent  acquisitions;
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


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

to  secure  and protect  trademarks,  patents  and other  intellectual property;
performance and reliability of products;  customer service;  adverse  publicity;
the loss of significant  suppliers or customers,  such as department  stores and
specialty  retailers,  the  consolidation  or  restructuring  of such customers,
including  large chain and  department  stores,  which may result in  unexpected
store closings; the Company's reliance on independent manufacturers in China and
potential  disruptions in such manufacturing  caused by difficulties  associated
with  political  instability in China,  the occurrence of a natural  disaster or
outbreak of a pandemic  disease in China or labor  shortages or work  stoppages;
the ability to secure raw materials;  delays and increased  costs of freight and
transportation  to meet  delivery  deadlines;  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 set forth above 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 refer to our annual reports on Form 10-K and our quarterly
reports on Form 10-Q for future  periods and current  reports on Form 8-K as the
Company files them with the SEC, and to other  materials the Company may furnish
to the public from time to time through Forms 8-K or otherwise.

     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 has  previously  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.


<PAGE>



PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

Critical Accounting Policies and Estimates

     The  preparation  of  financial   statements  and  related  disclosures  in
conformity with accounting principles generally accepted in the United States of
America  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.

     At the  beginning  of the 2006  fiscal year the  Company  adopted  SFAS No.
123(R),  Share-Based  Payment,  ("SFAS  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
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 both 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  assumptions were based on the United States  Treasury's  constant
maturity's  rate for the term of the expected life of the option 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  weighing  each  of the  inputs.  These
assumptions are evaluated and revised, as necessary,  based on changes in market
conditions and historical experience.



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

     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.


Contingencies

     The sale of Tommy Hilfiger branded footwear is a significant portion of the
Company's  business.  The Tommy  Hilfiger  footwear  sales are contingent on the
Company's licensing agreement with Tommy Hilfiger Licensing,  Inc. In July 2006,
the Company amended the terms of the current license  agreement,  which extended
the term of the agreement to expire in March 2008. Whether the Company's license
with  Tommy  Hilfiger  will  remain in  effect  depends  in part on the  Company
achieving  certain minimum sales levels for the licensed  products.  The Company
continues  to expect to meet the  minimum  sales  levels  required  by the Tommy
Hilfiger license agreement.  The Company believes that no provision is currently
required for costs related to the potential  loss of this license.  If the Tommy
Hilfiger  license  is lost,  the  Company's  business  would be  materially  and
adversely  affected.  Revenues  derived from our Tommy  Hilfiger  licenses  were
approximately  $21 million  and $73 million for the three and nine months  ended
September  1, 2006.  This  revenue is  included in the Tommy  Hilfiger  Footwear
segment,  the Other Wholesale  Footwear  segment  (specifically  the Stride Rite
International division), Stride Rite Children's Group - Retail Division, and the
Stride Rite Children's Group - Wholesale Division.

Results of Operations

<TABLE>
     The following table summarizes the Company's performance for the third
quarter of fiscal 2006 as compared to the results for the same period in fiscal
2005:

<CAPTION>
                                                    Percentage Increase
                                                    -------------------
                                            Third Quarter      Nine Months
                                            -------------      -----------

<S>                                             <C>               <C>
 Net sales                                      21.4%             21.6%
 Gross profit                                   26.9%             24.7%
 Selling and administrative expenses            25.0%             25.8%
 Operating income                               35.4%             21.2%
 Income before income taxes                     21.6%             12.3%
 Net income                                     10.0%             21.8%
</TABLE>



<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

<TABLE>
                                               Percentage of Net Sales
                                               -----------------------
<CAPTION>
                                         Third Quarter       Nine Months
                                       --------------------------------------
                                         2006      2005     2006      2005
                                       --------- ------- ---------- --------

<S>                                       <C>       <C>       <C>      <C>
 Gross profit                             41.6%     39.8%     41.3%    40.3%
 Selling and administrative expenses      33.2%     32.2%     32.1%    31.0%
 Operating income                          8.4%      7.6%      9.2%     9.3%
 Income before income taxes                8.0%      8.0%      8.8%     9.5%
 Net income                                4.8%      5.3%      6.1%     6.1%
</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

Third Quarter of 2006 Compared to the Third Quarter of 2005
-----------------------------------------------------------

Net Sales
---------

<TABLE>
      The third quarter breakdown of net sales is as follows:
                                                                         Percent
                                                                          Change
                                                                        2006 vs.
<CAPTION>
                                              2006          2005         2005
                                           ------------  ------------  ---------
(In millions, except percentages)
<S>                                           <C>          <C>           <C>
Stride Rite Children's Group - Wholesale      $27.3        $29.2         (6.5)%
Stride Rite Children's Group - Retail          56.6         48.2         17.4%
                                           ------------  ------------  ---------
Stride Rite Children's Group                   83.9         77.4          8.4%

Keds                                           22.1         25.1        (12.0)%
Sperry Top-Sider                               20.9         18.0         16.1%
Stride Rite International                      22.3         10.2        118.6%
Saucony                                        21.2            -          N/A
                                           ------------  ------------  ---------
Other Wholesale Footwear                       86.5         53.3         61.5%

Tommy Hilfiger Footwear                        11.6         18.3         36.6%

Elimination of intercompany sales              (4.5)        (2.8)         N/A
                                           ------------  ------------  ---------

Total net sales                              $177.5       $146.2         21.4%
                                           ============  ============  =========
</TABLE>

     During the third quarter of fiscal 2006,  consolidated  net sales increased
$31.3 million to $177.5 million,  or 21.4% above the sales level achieved in the
third  quarter of fiscal 2005.  Wholesale net sales  increased  $21.9 million or
22.5% for the third quarter of 2006,  and overall  retail  sales,  including the
e-commerce  sites,  increased  $9.4  million or 19.1% when  compared to the same
period in the prior year.  Unit  shipments  of first  quality  footwear  for the
wholesale  brands during the second quarter were 8.6% higher than the comparable
period in 2005.  The Company's  average first  quality  wholesale  selling price
increased  17.5% from the third  quarter of 2005 which was  primarily due to the
addition of Saucony.

     First quality  wholesale  net sales  increased by $27.5  million,  or 32.3%
above the  wholesale  net sales level  achieved  in the third  quarter of fiscal
2005. This includes the negative  impact of a $0.8 million  increase in combined
discounts,  returns and allowances.  Sales of closeout  products  decreased $4.7
million from the comparable period in the 2005 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

Gross Profit

     During the third  quarter of fiscal  2006,  the  Company's  gross profit of
$73.9 million  increased $15.7 million or 26.9% above the amount recorded during
fiscal 2005's third  quarter.  The gross profit  percentage  rate for the fiscal
2006 third quarter  increased 1.8 percentage  points to 41.6%,  versus the 39.8%
rate  achieved  in the prior  year's  third  quarter.  The higher  gross  profit
percentage was largely attributable to the significant increase in first quality
sales and lower  closeout  sales in the third quarter of fiscal 2006 as compared
to the third quarter of fiscal 2005.

Operating Costs

     During  the  third  quarter  of fiscal  2006,  selling  and  administrative
expenses were $58.9  million,  an increase of $11.8 million or 25.0% as compared
to the third quarter of fiscal 2005. This increase was principally the result of
the  inclusion  of  Saucony   which  added  $10.5  million  in  expenses.   Also
contributing  to the higher  expense  levels in the third quarter of fiscal 2006
was $2.5 million in added costs  associated with the increased  number of Stride
Rite Children's Group retail stores including  Saucony's  factory outlet stores.
In  addition,  the third  quarter  of 2006  included  $0.7  million  of  Saucony
integration  expenses  and $0.5  million of  expenses  relating  to  share-based
compensation  from the  adoption  of SFAS No.  123(R).  As a  percent  of sales,
operating costs were 33.2% in the third quarter of fiscal 2006 compared to 32.2%
in the third quarter of fiscal 2005.

Other Income and Taxes

     Interest  expense,  which relates to borrowings  under the revolving credit
agreement,  increased  by $1.0  million in the third  quarter of fiscal  2006 as
compared to the third quarter of fiscal 2005 as no  borrowings  were made during
the third quarter of fiscal 2005.

     The provision for income taxes  increased $1.8 million in the third quarter
of fiscal 2006 as compared to the similar  period in fiscal 2005.  This increase
was primarily  attributable to higher pre-tax income and a higher  effective tax
rate as the result of a decrease in the amount of prior period reserves reversed
in the third  quarter of fiscal  2006 when  compared  to the same  period in the
prior 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

Net Income

     Net  income  for the third  quarter  of fiscal  2006 was $8.5  million,  an
increase of $0.8 million,  or 10.0%, as compared to the same period in the prior
year.  The higher net sales and resulting  gross profit,  due to the addition of
Saucony and  increased  net sales of Stride  Rite  Children's  Group-Retail  and
Sperry Top-Sider,  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 were
as follows:  the Stride Rite Children's Group - Retail Division now includes the
Saucony  factory  outlet  stores (15 stores as of September 1, 2006);  Saucony's
international  operations  are now  included  in the Stride  Rite  International
division,  which  is  aggregated  in the  Other  Wholesale  Footwear  reportable
segment,  and the Saucony domestic  footwear  division,  which includes the Hind
unit, is also 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  segment
increased  $8.4  million or 17.4% in the third  quarter as  compared to the same
quarter in the prior year.  Sales at comparable  Children's  Group retail stores
(stores  open for 52 weeks in each  fiscal  year)  increased  4.1% for the third
fiscal  quarter of 2006.  At the end of the third  quarter of fiscal  2006,  the
Stride Rite  Children's  Group - Retail operated 296 Stride Rite children's shoe
stores and outlets. This is a net increase of 25 stores, or 9.2% from the end of
the prior fiscal year. In addition Stride Rite Children's  Group-Retail operated
15 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 third
quarter of 2006 the Company opened 8 new stores.

     The Stride Rite Children's Group - Retail operating income increased versus
last year primarily due to increased sales as a result of the success of certain
back-to-school promotional events.

Stride Rite Children's Group - Wholesale

     Sales  decreased  $1.9 million or 6.5% during the third  quarter of 2006 as
compared to the same quarter last year. This decrease in sales was  attributable
to the  decline in  Children's  Tommy  Hilfiger  sales in the  department  store
channel  including  the  effect  of  the  consolidation  of  May  and  Federated
department stores.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

     Operating income for the Stride Rite Children's Group - Wholesale  remained
flat versus the  comparable  period in the prior year. The lower sales level was
positively impacted by a more profitable product mix.

Tommy Hilfiger Footwear, Inc.

     The decrease in sales of Tommy Hilfiger  footwear products during the third
quarter of fiscal 2006 versus the comparable  period in the prior year was based
on  declines  in all  retail  channels.  The  fourth  quarter  should see a less
significant decline than the first nine months.

     The increase of the Tommy  Hilfiger  operating  loss versus the  comparable
period  in the  prior  year  was  attributable  to the  decrease  in net  sales.
Operating  expenses  were  significantly  reduced  which  lessened the operating
income impact from the net sales decline in the third quarter as compared to the
same period last year.

Other Wholesale Footwear

     The overall  increase in net sales versus last year 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.

     Saucony's  domestic  sales  added  $21.2  million of net sales in the third
quarter  of 2006.  The  strength  of  Saucony's  net  sales  continues  to be in
technical products in the specialty run retail channel.

     The  Sperry  Top-Sider  net sales  increase  was  largely  attributable  to
continued strong sales of their men's and women's product lines. The significant
growth in the Sperry  Top-Sider  product sales in 2006  resulted from  continued
increases in the premier family and outdoor shoe retail channels.  This trend is
expected to continue in the fourth quarter of fiscal 2006.

     The Stride  Rite  International  division's  net sales  growth in the third
quarter of fiscal 2006 was primarily the result of Saucony  product sales in the
United Kingdom,  Netherlands,  Canada, Australia, and Korea. In addition, Stride
Rite sales increased in the Middle East,  Sperry  Top-Sider's sales increased in
Latin America, and Keds sales increased in Canada.



<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 the third quarter of fiscal 2006 versus the same
period last year was partially due to weak  performance  from certain core basic
product.  The stronger sell-in to the specialty  premier retail channel based on
the more  youthful  silhouette  strategy  was not  able to  offset  these  sales
declines. The consolidation of May Company into Federated Department Stores 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 the comparable  period in the 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 which offset
the profit impact of weaker Keds sales.

First Nine Months of 2006 Compared to the First Nine Months of 2005

Net Sales

<TABLE>
      The first nine months breakdown of net sales is as follows:
                                                                         Percent
                                                                          Change
                                                                        2006 vs.
<CAPTION>
                                              2006          2005         2005
                                           ------------  ------------  ---------
(In millions, except percentages)
<S>                                              <C>           <C>      <C>
Stride Rite Children's Group - Wholesale         $66.8         $74.3    (10.0)%
Stride Rite Children's Group - Retail            150.3         129.6     16.0%
                                           ------------  ------------  ---------
Stride Rite Children's Group                     217.1         203.9      6.5%

Keds                                              99.0         112.8    (12.2)%
Sperry Top-Sider                                  73.0          60.6     20.5%
Stride Rite International                         64.3          26.9    139.0%
Saucony                                           71.3             -      N/A
                                           ------------  ------------  ---------
Other Wholesale Footwear                         307.6         200.3     53.6%

Tommy Hilfiger Footwear                           41.1          60.9    (32.5)%

Elimination of intercompany sales               (10.9)         (8.6)      N/A
                                           ------------  ------------  ---------

Total net sales                                 $554.9        $456.5     21.6%
                                           ============  ============  =========
</TABLE>

     During  the  first  nine  months  of fiscal  2006,  consolidated  net sales
increased  $98.4  million  to $554.9  million,  or 21.6%  above the sales  level
achieved in the first nine months of fiscal 2005.  Wholesale net sales increased
$76.2  million or 23.9% for the first nine months of 2006,  and  overall  retail
sales,  including the e-commerce  sites,  increased  $22.3 million or 16.8% when
compared to the same period in the prior year.  Unit  shipments of first quality
merchandise  for the  wholesale  brands  during the first nine  months were 4.0%
higher  than the  comparable  period  in 2005 and the  Company's  average  first
quality  wholesale  selling price  increased 19.0% from the first nine months of
2005. The addition of Saucony was largely responsible for these increases.
<PAGE>

PART I - FINANCIAL INFORMATION (Continued)

                           THE STRIDE RITE CORPORATION

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

     First quality  wholesale  net sales  increased by $80.7  million,  or 27.3%
above the wholesale net sales level  achieved in the first nine months of fiscal
2005. This includes the negative  impact of a $3.5 million  increase in combined
discounts,  returns and  allowances.  The  increases in 2006 were  primarily the
result of Saucony.  Sales of closeout  products  decreased $2.9 million from the
comparable period in the 2005 fiscal year.

Gross Profit

     During the first nine months of fiscal 2006, the Company's  gross profit of
$229.4 million increased $45.5 million or 24.7% above the amount recorded during
the first nine months of fiscal 2005. The gross profit  percentage  rate for the
first nine months of fiscal 2006 improved 1.0 percentage point to 41.3%,  versus
the 40.3% rate  achieved in the same period in the prior fiscal year.  The gross
profit percentage was adversely affected by the additional first quarter 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 of this item on the gross profit percentage was
offset by significantly  higher first quality  wholesale sales in the first nine
months of fiscal 2006.

Operating Costs

     During the first nine months of fiscal  2006,  selling  and  administrative
expenses were $178.1 million,  an increase of $36.5 million or 25.8% as compared
to the first nine months of fiscal  2005.  This  increase  was  principally  the
result of the inclusion of Saucony  which added $31.5 million in expenses.  Also
contributing  to the higher  expense  levels in the first nine  months of fiscal
2006 was the $7.4 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 nine months of fiscal 2006 included $2.8
million of Saucony integration expenses and $2.2 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  nine  months of fiscal  2006
compared to 31.0% in the first nine months of fiscal 2005.

Other Income and Taxes

     Investment  income related to the Company's cash equivalents and marketable
securities  was $1.3  million in the first  nine  months of fiscal  2006,  which
increased $0.2 million versus the same period in fiscal 2005.  Interest expense,
which relates to borrowings under the revolving credit  agreement,  increased by
$3.4  million in the first nine  months of fiscal  2006 as compared to the first
nine  months of fiscal  2005 as no  borrowings  were made  during the first nine
months of fiscal 2005.


<PAGE>


PART I - FINANCIAL INFORMATION (Continued)


                           THE STRIDE RITE CORPORATION

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

     The  provision  for income taxes  decreased  $0.7 million in the first nine
months of fiscal  2006 as  compared  to the same  period  in fiscal  2005.  This
decrease was  primarily  attributable  to the  favorable  outcome of a state tax
audit in the second  quarter of fiscal 2006 which  resulted in a net tax benefit
of $4.2 million. The reversals positively impacted the effective income tax rate
for the nine months ending September 1, 2006 by 8.5%. Our effective tax rate was
30.9% in the first nine  months of fiscal 2006 as compared to 36.3% in the first
nine months of fiscal 2005.

Net Income

     Net income for the first nine months of fiscal 2006 was $33.7  million,  an
increase of $6.0  million,  or 21.8% as compared to the same period in the prior
fiscal  year.  The  higher  net sales and  resulting  gross  profit,  due to the
addition  of  Saucony  and higher net sales of Stride  Rite  Children's  Group -
Retail and Sperry Top-Sider,  were able to offset the corresponding increases in
operating expenses and interest expense. Also contributing to the increase was a
lower tax provision  resulting from the third quarter  reversal of certain prior
period  reserves for income tax exposures  that are no longer  required based on
the favorable outcome of a state tax audit.


<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, during the first quarter of fiscal 2006,
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 were as follows:  the Stride Rite  Children's
Group - Retail Division includes the Saucony factory outlet stores (15 stores as
of September 1, 2006);  Saucony's  international  operations are included in the
Stride Rite International  division,  which is aggregated in the Other Wholesale
Footwear  reportable segment and 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  division
increased  $20.7  million or 16.0% in the first nine  months as  compared to the
same period in the prior  fiscal  year.  Sales at  comparable  Children's  Group
retail stores (stores open for 52 weeks in each fiscal year)  increased 3.7% for
the first nine  months of fiscal  2006.  At the end of the first nine  months of
fiscal 2006, the Stride Rite Children's  Group - Retail operated 296 Stride Rite
children's shoe stores and outlets. This is a net increase of 25 stores, or 9.2%
from the end of the prior fiscal year. In addition Stride Rite Children's  Group
- Retail  operated 15 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 nine months of 2006 the  Company  opened 25 new stores
and closed 3 underperforming Saucony outlet store locations.

     The  Stride  Rite  Children's  Group - Retail  operating  income  increased
primarily due to increased net sales and a slightly improved gross profit margin
generating  more  profits  which  offset  higher  operating  expenses due to the
increased number of stores.

Stride Rite Children's Group - Wholesale

     Sales  decreased $7.5 million or 10.0% during the first nine months of 2006
as compared to the same period last year.  The decrease in the net sales for the
first nine months of fiscal 2006 were  affected by the merger of May Company and
Federated  Department Stores,  changes in the product flow of certain department
stores,  value  channel  buying  patterns  and  a  decline  in  certain  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
the first nine months of fiscal 2006 compared to the same period in fiscal 2005.

Tommy Hilfiger Footwear, Inc.

     The decrease in sales of Tommy Hilfiger  footwear products during the first
nine months of fiscal 2006 was across all retail channels.

     The  increase of the Tommy  Hilfiger  operating  loss versus prior year was
primarily  attributable to the decrease in net sales. The majority of the impact
of the operating loss was offset by significant  decreases in operating expenses
and an  improved  gross  profit  rate in the first nine months of fiscal 2006 as
compared to the same period in the prior fiscal 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.

     Saucony's  domestic sales added $71.3 million to net sales on the continued
strength of the technical running products in the specialty run retail channel.

     The Sperry Top-Sider  increase was largely  attributable to strong sales of
the men's and women's  product  lines,  particularly  in the premier  family and
outdoor shoe channels.

     The Stride Rite International division's net sales growth in the first nine
months of fiscal  2006 was  primarily  the  result  of strong  sales of  Saucony
products in Canada and Europe.  In addition,  Tommy Hilfiger sales  increased in
Canada and Latin America, Keds sales increased in Canada, and Sperry Top-Sider's
sales also increased in Europe.



<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  during the first nine months of fiscal 2006 versus
the same  period  last year was  partially  attributable  to a  decrease  in the
department store and value sales channels. The consolidation of May Company into
Federated Department Stores has negatively impacted Keds sales in the first nine
months and is  expected to  continue  to do so for the  remainder  of the fiscal
year. These decreases were partially offset by stronger sell-in to the specialty
premium retail channel.

     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 in the first  quarter of 2006
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 third fiscal quarter of 2006, our balance sheet reflected
a current ratio of 4.8 to 1.0 with $55.0 million in long term debt. Our cash and
cash equivalents totaled $24.3 million at September 1, 2006, a decrease of $67.9
million from the total cash and cash equivalents at the end of the third 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 and second  quarters of our fiscal year.  During the first nine
months  of  fiscal  2006,  the  Company  provided  $14.5  million  of cash  from
operations as compared to $13.3 million provided by operations in the first nine
months of fiscal 2005.  Inventory  levels at the end of the first nine months of
fiscal 2005 increased  $32.3 million,  or 37.5% from the levels  recorded at the
end of the prior  year's  third  quarter.  The  increase  in  inventory  related
primarily to the addition of Saucony product.  Accounts  receivable at September
1, 2006 were $21.5  million or 30.6%  higher  than the amount at the end of last
year's  third  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 43 days at the end of the third fiscal quarter of 2006 and is an
increase  when compared to the DSO of 40 days at the end of the same period last
year.  The  increase in DSO from the same period in the prior year is related to
the addition of Saucony,  which generally offers somewhat longer credit terms to
their  customers.  Accounts  payable,  at the end of the third quarter of fiscal
2006,  increased  $9.1 million  from the level  recorded at the end of the prior
year's third quarter. The increase was primarily due to the addition of Saucony.
During the third 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 $12.7 million in the first nine
months of fiscal  2006,  an increase  compared to the $6.3  million in the first
nine months of fiscal 2005.  The increase in capital  purchases  compared to the
same period in fiscal 2005 related  primarily to the continued  retail expansion
efforts  during  the third  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.

     On June 16, 2006, the Company sold the former  Saucony,  Inc.  headquarters
facility  located in Peabody,  Massachusetts  for $7.5 million,  net of costs to
sell.

     At the end of the third  quarter of fiscal  2006,  there was $55.0  million
outstanding  under the Company's  $275.0 million  revolving  credit  facility of
which $200.0  million is currently  committed.  The facility was entered into in
September 2005 as part of the Saucony  acquisition and to also provide funds for
working capital and general corporate purposes. As of September 1, 2006, letters
of  credit  totaling  $29.8  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 nine months of fiscal 2006 we  returned  $17.4  million to
shareholders  through  share  repurchases  and cash  dividends.  We spent  $10.9
million to repurchase 814,300 common shares under our share repurchase  program.
As of September 1, 2006 we have  approximately  3.1 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.

     On September 5, 2006, the Company  purchased all of the outstanding  shares
of three  holding  companies  that,  together  with their  direct  and  indirect
subsidiaries,  constitute  the Robeez Group  ("Robeez")  for a purchase price of
approximately  $27.5  million.  The  Company  financed  the  acquisition  with a
combination of cash on hand and existing credit facilities.



<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.

(i) Changes in internal controls over financial reporting.

     There  was no change  in the  Company's  internal  control  over  financial
reporting  (as  defined  in Rules  13a-15(f)  and  15d-15(f)  of the  Securities
Exchange Act of 1934, as amended)  during our third quarter that has  materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial  reporting.  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 1A. RISK FACTORS

In  addition  to the  other  information  set forth  in this report,  you should
carefully  consider the factors  discussed in Part I, "Item 1A. Risk Factors" in
our Annual Report on Form 10-K for the year ended December 2, 2005,  which could
materially affect our business, financial condition or future results. The risks
described  in our Annual  Report on Form 10-K are not the only risks  facing our
Company. Additional risks and uncertainties not currently known to us or that we
currently  deem to be  immaterial  also  may  materially  adversely  affect  our
business, financial condition and/or operating results.

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

<TABLE>
     Our  repurchases of equity  securities for the third 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
                                        Shares     Per      Announced  Under the
Period                                  Purchased  Share    Plan       Plan
--------------------------------------------------------------------------------

June 4, 2006 - June 30, 2006                  -        -          -   3,458,694

<S>                                     <C>       <C>       <C>       <C>
July 1, 2006 - August 4, 2006           332,600   $12.31    332,600   3,126,094

August 5, 2006 - September 1, 2006       33,400   $12.48     33,400   3,092,694
</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

    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.

   10.1           Fifth Amendment to the Amended and Restated License
                  Agreement dated July 28, 2006 between Tommy Hilfiger
                  Licensing, Inc. and the Company.

  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:  October 10, 2006             /s/ Frank A. Caruso
                                    ------------------------
                                      Frank A. Caruso
                                      Chief Financial Officer



<PAGE>


                                                                    Exhibit 31.1
I, David M. Chamberlain, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q for the period ending
      September 1, 2006 of The Stride Rite Corporation;

2.    Based on my knowledge, this report does not contain any untrue
      statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances
      under which such statements were made, not misleading with respect
      to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this report, fairly present in all material
      respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in
      this report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
      control over financial reporting (as defined in Exchange Act Rules
      13a-15(f) and 15d - 15(f)) for the registrant and have:

      (a)   designed such disclosure controls and procedures, or caused such
            disclosure controls and procedures to be designed under our
            supervision, to ensure that material information relating to the
            registrant, including its consolidated subsidiaries, is made known
            to us by others within those entities, particularly during the
            period in which this quarterly report is being prepared;
      (b)   designed such internal control over financial reporting, or caused
            such internal control over financial reporting to be designed under
            our supervision, to provide reasonable assurance regarding the
            reliability of financial reporting and the preparation of financial
            statements for external purposes in accordance with generally
            accepted accounting principles;
      (c)   evaluated the effectiveness of the registrant's disclosure controls
            and procedures and presented in this report our conclusions about
            the effectiveness of the disclosure controls and procedures, as of
            the end of the period covered by this report based on such
            evaluation; and
      (d)   disclosed in this report any change in the registrant's internal
            control over financial reporting that occurred during the
            registrant's most recent fiscal quarter (the registrant's fourth
            fiscal quarter in the case of an annual report) that has materially
            affected, or is reasonably likely to materially affect, the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying officers and I have disclosed,
      based on our most recent evaluation of internal control over
      financial reporting, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing
      the equivalent functions):

      (a)   all significant deficiencies and material weaknesses in the design
            or operation of internal controls over financial reporting which are
            reasonably likely to adversely affect the registrant's ability to
            record, process, summarize and report financial information; and
<PAGE>

      (b)   any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal control over financial reporting.

Date:  October 10, 2006                  /s/ David M. Chamberlain
       ------------------                ---------------------------------------
                                         David M. Chamberlain,
                                         Chairman and CEO



<PAGE>


                                                                    Exhibit 31.2
I, Frank A. Caruso, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q for the period ending
      September 1, 2006 of The Stride Rite Corporation;

2.    Based on my knowledge, this report does not contain any untrue
      statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances
      under which such statements were made, not misleading with respect
      to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this report, fairly present in all material
      respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in
      this report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
      control over financial reporting (as defined in Exchange Act Rules
      13a-15(f) and 15d - 15(f)) for the registrant and have:

      (a)   designed such disclosure controls and procedures, or caused such
            disclosure controls and procedures to be designed under our
            supervision, to ensure that material information relating to the
            registrant, including its consolidated subsidiaries, is made known
            to us by others within those entities, particularly during the
            period in which this quarterly report is being prepared;
      (b)   designed such internal control over financial reporting, or caused
            such internal control over financial reporting to be designed under
            our supervision, to provide reasonable assurance regarding the
            reliability of financial reporting and the preparation of financial
            statements for external purposes in accordance with generally
            accepted accounting principles;
      (c)   evaluated the effectiveness of the registrant's disclosure controls
            and procedures and presented in this report our conclusions about
            the effectiveness of the disclosure controls and procedures, as of
            the end of the period covered by this report based on such
            evaluation; and
      (d)   disclosed in this report any change in the registrant's internal
            control over financial reporting that occurred during the
            registrant's most recent fiscal quarter (the registrant's fourth
            fiscal quarter in the case of an annual report) that has materially
            affected, or is reasonably likely to materially affect, the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying officers and I have disclosed,
      based on our most recent evaluation of internal control over
      financial reporting, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing
      the equivalent functions):

      (a)   all significant deficiencies and material weaknesses in the design
            or operation of internal controls over financial reporting which are
            reasonably likely to adversely affect the registrant's ability to
            record, process, summarize and report financial information; and
<PAGE>

      (b)   any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal control over financial reporting.

Date:  October 10, 2006                  /s/ Frank A. Caruso
       -------------------               --------------------------------------
                                         Frank A. Caruso,
                                         Chief Financial Officer



<PAGE>


                                                                    Exhibit 32.1

     The  undersigned  officer of The Stride Rite  Corporation  (the  "Company")
hereby  certifies  that the  Company's  quarterly  report  on Form  10-Q for the
quarterly  period  ended  September  1, 2006 (the  "Report"),  as filed with the
Securities and Exchange  Commission of the date hereof,  fully complies with the
requirements  of  Section  13(a) or  15(d),  as  applicable,  of the  Securities
Exchange  Act of 1934,  as amended,  and that the  information  contained in the
Report fairly presents,  in all material respects,  the financial  condition and
results of  operations of the Company.  This  certification  is provided  solely
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002,  and shall not be deemed to be a part of the Report
or "filed" for any purpose whatsoever.



Date: October 10, 2006                   Name:   /s/ David M. Chamberlain
      ----------------                           -----------------------
                                         Title:  Chairman and CEO







<PAGE>


                                                                    Exhibit 32.2

     The  undersigned  officer of The Stride Rite  Corporation  (the  "Company")
hereby  certifies  that the  Company's  quarterly  report  on Form  10-Q for the
quarterly  period  ended  September  1, 2006 (the  "Report"),  as filed with the
Securities and Exchange  Commission of the date hereof,  fully complies with the
requirements  of  Section  13(a) or  15(d),  as  applicable,  of the  Securities
Exchange  Act of 1934,  as amended,  and that the  information  contained in the
Report fairly presents,  in all material respects,  the financial  condition and
results of  operations of the Company.  This  certification  is provided  solely
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002,  and shall not be deemed to be a part of the Report
or "filed" for any purpose whatsoever.



Date: October 10, 2006                  Name:   /s/ Frank A. Caruso
      ------------------                        -------------------
                                        Title:  Chief Financial Officer