Payless Sees Slight Q2 Comps and Sales Gains

Payless ShoeSource, Inc. saw comparable store sales increase 2.2% during the second quarter. Total sales for the quarter were $706.4 million, a 1.8% increase from $693.9 million during the second quarter 2005.

Sales were as follows (unaudited):

                SECOND QUARTER SALES (DOLLARS IN MILLIONS)
      Fiscal           Fiscal        Percent      Same-Store Sales**
      2006*            2005*         Increase     Percent Increase
     $706.4           $693.9           1.8%             2.2%

                 YEAR TO DATE SALES (DOLLARS IN BILLIONS)
       Fiscal           Fiscal       Percent       Same-Store Sales**
       2006*            2005*        Increase      Percent Increase
      $1.40            $1.39           0.9%             1.3%

    * The fiscal year for operations in the company's Latin American region
    and Japan is based on a December 31 year-end.  Operations in the company's
    Latin American region (178 stores) and Japan 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.
    Same-store-sales exclude stores in the company's Latin American region and
    Japan.

“Our results in the second quarter represent the sixth consecutive quarter that we have achieved positive comparable store sales results,” said Matthew E. Rubel, Chief Executive Officer and President. “Our customers responded particularly well to our assortments in women’s athletic and casual shoes, girl’s shoes, and men’s dress and casual shoes. Looking forward, continuing to implement the various components of our strategy will serve as a catalyst to reach new customers and increase our share of our current customers footwear purchases.”