Payless January Comps Down 0.3%

Payless ShoeSource same-store sales decreased 0.3 percent during the January reporting period, the four weeks ended Saturday, January 31, 2004…

Same-store sales decreased by 1.0% in the fourth quarter. Same-store
sales decreased 3.9 percent during fiscal year 2003. Total sales for fiscal
2003 were $2.78 billion, compared with $2.88 billion during fiscal 2002.

     Sales were as follows (unaudited):


                        JANUARY SALES (DOLLARS IN MILLIONS)
    Fiscal                        Fiscal                  Same-Store Sales**
    2003                          2002                    Percent
                                                          Increase/(Decrease)
    $134.1*                       $141.4                  (0.3)%


                     4th QUARTER SALES (DOLLARS IN MILLIONS)
    Fiscal                        Fiscal                  Same-Store Sales**
    2003                          2002                    Percent
                                                          Increase/(Decrease)
    $644.4*                       $650.5                  (1.0)%


                     YEAR-TO-DATE SALES (DOLLARS IN BILLIONS)
    Fiscal                        Fiscal                  Same-Store Sales**
    2003                          2002                    Percent
                                                          Increase/(Decrease)
    $2.78*                        $2.88                   (3.9)%

     * Total sales in the 2003 periods exclude sales in Latin America in
     January 2004 (207 stores).  Effective with the end of 2003, the fiscal
     year for Latin America will be based on a December 31 year-end.
     Therefore, beginning in February 2004, Latin America will be included in
     total company results on a one-month lag relative to results from other
     regions.  This is consistent with the practice of many other retailers in
     order to assure timely reporting.  The financial results of Latin America
     for the month of January 2004 are not material to the consolidated
     financial results of the company.

     ** Same-store sales represent sales of those stores open during both
     periods, excluding stores in Latin America in January of both years.

The persistent, aggressive promotional environment, and the company's
strategy to compete in this environment, put intense pressure on financial
results throughout the second half of the year. Consequently, the company
expects to report a loss for the full fiscal year ended January 31, 2004.

The company has managed its inventories, working capital and debt position
to maintain a strong financial condition. Long-term debt was reduced in 2003
and the company had no borrowings on its Revolving Credit Facility at
year-end. In addition, based on initial estimates, the level of inventory at
fiscal year-end 2003 was on track for a 5% to 10% reduction compared with
fiscal year-end 2002. This is consistent with management's merchandising
strategy to position the company for improved financial performance in fiscal
2004.