Payless March Comps Rise 4.6%

Payless ShoeSource same-store sales increased 4.6% percent during the March reporting period, the five weeks ended April 3, 2004. Company sales totaled $284.6 million, a 5.0 percent increase from $270.9 million during fiscal March of last year.

Total sales for the first two months of fiscal 2004 were $456.4 million, a 2.3 percent increase from $446.2 million during the similar period in fiscal 2003.

Same-store sales increased 1.7 percent during the first two months of the fiscal year.

     Sales were as follows (unaudited):

                      MARCH SALES (DOLLARS IN MILLIONS)
            Fiscal       Fiscal       Percent       Same-Store Sales**
             2004*        2003        Increase/     Percent
                                     (Decrease)     Increase/(Decrease)
            $284.6       $270.9       5.0%          4.6%

                   YEAR-TO-DATE SALES (DOLLARS IN MILLIONS)
            Fiscal       Fiscal       Percent       Same-Store Sales**
             2004*        2003        Increase/     Percent
                                     (Decrease)     Increase/(Decrease)
            $456.4       $446.2       2.3%          1.7%

     *  Effective with the end of 2003, the fiscal year for operations in the
        company's Latin American region will be based on a December 31 year-
        end. Therefore, beginning in February 2004, stores in the company's
        Latin American region (211 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. Beginning in 2004, same-store-sales excludes stores in the
        company's Latin American region.

“We are encouraged by our sales performance in March. We achieved mid single-digit positive same-store sales with a lower level of markdowns than in recent months,” said Steven J. Douglass, Chairman and Chief Executive Officer of Payless. “This level of performance, if sustained, will help the company attain its goals of 30% gross margin and improved profitability in fiscal 2004.”

“Our year-to-date performance provides further confirmation that our strategy is appropriate and is working. We are beginning to achieve Merchandise Authority across a broader range of product categories.”