Payless March Comp Store Sales Decreased 10.6%

Payless ShoeSource, Inc. reported that same-store sales decreased 10.6 percent during the March reporting period, the five weeks ended April 5, 2003. The decrease was due principally to the shift in Easter from March 2002 to late April 2003. In addition, sales were impacted in the latter part of the month by unseasonable winter storms in the Northeast and Midwest.

Company sales totaled $270.9 million, a 9.2 percent decrease from $298.2 million during fiscal March of last year.

Total sales for the first two months of fiscal 2003 were $446.2 million, a 5.6 percent decrease from $472.8 million during the similar period in fiscal 2002.

Same-store sales decreased 7.0 percent during the first two months of the fiscal year.

Sales were as follows:

MARCH SALES (DOLLARS IN MILLIONS)

                                                          Same-Store Sales*
    Fiscal                Fiscal               Percent             Percent
    2003                   2002               Increase/           Increase/
                                              (Decrease)         (Decrease)
    $270.9                $298.2                (9.2)%            (10.6)%

                     YEAR-TO-DATE SALES (DOLLARS IN MILLIONS)

                                                          Same-Store Sales*
    Fiscal                Fiscal                 Percent          Percent
    2003                   2002                 Increase/        Increase/
                                               (Decrease)        (Decrease)
    $446.2                $472.8                (5.6)%             (7.0)%

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

Payless completed a 3:1 split of the company’s common stock in the form of a stock dividend paid on March 27, 2003 to shareowners of record as of March 13, 2003. All share and per-share amounts presented in this press release are calculated on a post-split basis.

The company expects low single-digit positive same-store sales in April 2003. For the first quarter 2003 Payless anticipates low single-digit negative same-store sales, and diluted earnings per share in the range of $0.25 – $0.30. This is a reduction from previous guidance of $0.38 – $0.42, reflecting the lower than anticipated sales in March and the continued uncertainty regarding the impact on consumer behavior of the war in Iraq and the potential for continued unseasonable winter weather during the Easter selling season. The company recorded earnings per diluted share of $0.35 in the first quarter 2002.