Payless December Comps Up 1.8%

Payless ShoeSource same-store sales increased 1.8 percent during the December reporting period, the five weeks ended Saturday, January 3, 2004.

Company sales totaled $301.8 million, a 3.3 percent increase from
$292.0 million during fiscal December of last year.

Total sales for the first eleven months of fiscal 2003 were $2.65 billion,
a 3.2 percent decrease from $2.74 billion during the similar period in fiscal
2002. Same-store sales decreased 4.0 percent during the first eleven months
of the fiscal year.

    Sales were as follows:

                     DECEMBER SALES (DOLLARS IN MILLIONS)

     Fiscal      Fiscal        Percent             Same-Store Sales*
     2003        2002          Increase/           Percent
                               (Decrease)          Increase/(Decrease)

     $301.8      $292.0        3.3%                1.8%


               4th QUARTER SALES TO-DATE (DOLLARS IN MILLIONS)

     Fiscal      Fiscal        Percent             Same-Store Sales*
     2003        2002          Increase/           Percent
                               (Decrease)          Increase/(Decrease)

     $510.3      $509.2        0.2%                (1.2)%


                   YEAR-TO-DATE SALES (DOLLARS IN BILLIONS)

     Fiscal      Fiscal        Percent            Same-Store Sales*
     2003        2002          Increase/          Percent
                               (Decrease)         Increase/(Decrease)

     $2.65       $2.74         (3.2)%             (4.0)%

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

The sales results in December were achieved with a significant increase in
markdowns compared with the same period last year. The aggressive promotional
environment that has persisted for several months is putting intense pressure
on financial results for the fourth quarter and the full fiscal year ending
January 31, 2004.