July Comps Rise 2.8% for Payless

Payless ShoeSource today reported that same-store sales increased 2.8 percent during the July reporting period, the four weeks ended August 2, 2003.

Company sales totaled $203.6 million, a 3.0 % increase from $197.6 million during fiscal July of last year.

Sales for the second quarter were $731.5 million, a 5.8 % decrease from $776.2 million in the second quarter 2002. Same-store sales decreased 6.4 % during the second quarter.

Total sales for the first six months of fiscal 2003 were $1.43 billion, a 5.6 % decrease from $1.51 billion during the similar period in fiscal 2002. Same-store sales decreased 6.3 % during the first six months of the fiscal year.

Sales were as follows:

                         JULY SALES (DOLLARS IN MILLIONS)
     Fiscal            Fiscal           Percent         Same-Store Sales*
      2003              2002           Increase/        Percent Increase/
                                       (Decrease)          (Decrease)
     $203.6            $197.6             3.0%                 2.8%

                     2nd QUARTER SALES (DOLLARS IN MILLIONS)
     Fiscal            Fiscal           Percent         Same-Store Sales*
      2003              2002           Increase/        Percent Increase/
                                       (Decrease)          (Decrease)
     $731.5            $776.2            (5.8)%               (6.4)%

                     YEAR-TO-DATE SALES (DOLLARS IN BILLIONS)
     Fiscal            Fiscal           Percent         Same-Store Sales*
      2003              2002           Increase/        Percent Increase/
                                       (Decrease)          (Decrease)
      $1.43             $1.51            (5.6)%               (6.3)%

     *Same-store sales represent sales of those stores open during both
      periods.

July sales reflected more seasonable weather and favorable customer response to the company's stepped-up promotional events.

Consistent with previous statements by the company, the aggressive promotional environment put pressure on margins and earnings throughout the second quarter. The company expects to achieve a small profit for the second quarter, ended August 2, 2003. The company intends to report results for the second quarter on Wednesday, August 13, 2003.