Payless May Comps Increase 3.9%

Payless ShoeSource same-store sales increased 3.9% during the May reporting period, the four weeks ended May 29, 2004. Company sales totaled $246.7 million, a 4.3 percent increase from $236.5 million during fiscal May of last year.

Same-store sales increased 3.0 percent during the first four months of the fiscal year.

   Sales were as follows (unaudited):


                        MAY SALES (DOLLARS IN MILLIONS)

         Fiscal             Fiscal           Percent    Same-Store Sales**
         2004*               2003           Increase/         Percent
                                           (Decrease)  Increase/(Decrease)
        $246.7             $236.5            4.3%               3.9%

                   YEAR-TO-DATE SALES (DOLLARS IN MILLIONS)

         Fiscal             Fiscal           Percent    Same-Store Sales**
         2004*              2003           Increase/         Percent
                                           (Decrease)  Increase/(Decrease)
        $968.7             $934.2            3.7%               3.0%


  *  Effective with the end of 2003, the fiscal year for operations in the
     company's Latin American region is based on a December 31 year-end.
     Stores in the company's Latin American region (210 stores) are included
     in total company results on a one-month lag relative to results from
     other regions.

  ** Same-store sales represent sales of those stores in the United States,
     Canada, Puerto Rico, Guam and Saipan that were open during both
     periods.  Same-store-sales exclude stores in the company's Latin
     American region.

The company continues to strive towards its stated financial goals of 30% gross margin and improved profitability in fiscal 2004. Specific initiatives to improve performance for the remainder of 2004 include:

  -- Continued commitment to executing the company's Merchandise Authority
     strategy;
  -- Tight control of inventory, reacting quickly to changes in consumer
     demand, to minimize the need for markdowns;
  -- Focused marketing with complete alignment of messages -- using the
     company's stores as the lead marketing communication vehicle; and,
  -- Educating store associates to use key service behaviors, identified to
     impact conversion, in their interactions with customers.