Payless ShoeSource Reports Third Quarter Same-Store Sales Increased 5.2%

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Payless ShoeSource Reports Third Quarter Same-Store Sales Increased 5.2%
    TOPEKA, Kan., Nov. 2 /PRNewswire-FirstCall/ -- Payless ShoeSource, Inc.
(NYSE: PSS) today reported that same-store sales increased 5.2 percent
during the third quarter of fiscal 2006, the thirteen weeks ended October
28, 2006. All data in this press release relate to continuing operations.
    Total sales for the third quarter were $703.4 million, a 5.5 percent
increase from $666.5 million during the third quarter 2005.
     Sales were as follows (unaudited):

                     THIRD QUARTER SALES (DOLLARS IN MILLIONS)

     Fiscal                 Fiscal             Percent      Same-Store Sales**
     2006*                  2005*              Increase      Percent Increase
    $703.4                 $666.5               5.5%               5.2%


                      YEAR TO DATE SALES (DOLLARS IN BILLIONS)

     Fiscal                 Fiscal             Percent      Same-Store Sales**
     2006*                   2005*             Increase      Percent Increase
    $2.10                   $2.05               2.4%               2.6%


    * The fiscal year for operations in the company's Latin American region is
    based on a December 31 year-end.  Operations in the company's Latin
    American region (180 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.
    Same-store-sales exclude stores in the company's Latin American region.
    "We are very pleased with our sales results for the third quarter,"
said Matt Rubel, President and Chief Executive Officer of Payless
ShoeSource. "Footwear sales were strong across all segments of our women's
and children's categories."
    Based on third quarter results, the Company expects diluted earnings
per share from continuing operations for the third quarter to be in the
range of $0.43 to $0.46, which includes a favorable income tax impact of
approximately $0.02 to $0.03 per diluted share for changes in the effective
income tax rate. As part of this announcement, the Company said it will no
longer be issuing a quarterly sales release. Quarterly sales results,
including same-store sales results, will be reported as part of the
quarterly earnings release beginning in the fourth quarter of fiscal 2006.
    As previously announced, the Company exited retail operations in Japan
during the third quarter, closing its one test location. Total exit costs
are estimated to be approximately $2 million pre-tax and before minority
interest, with virtually all costs incurred in the third quarter of 2006.
Results of Japan retail operations for all periods will be reported as
discontinued operations.
    The Company intends to report earnings results for the third quarter on
Tuesday, November 21st, 2006. The release will be made after the market
closes, at approximately 4:05 p.m. ET. A conference call with management
will take place on the same day at 5 p.m. ET.
    Payless ShoeSource, Inc. is the largest specialty family footwear
retailer in the Western Hemisphere, dedicated to democratizing fashion and
design in footwear and accessories and inspiring fun, fashion possibilities
for the family at a great value. At the end of the third quarter 2006, the
Company operated a total of 4,574 stores. In addition, customers can buy
shoes over the Internet through Payless.com(R), at http://www.payless.com .
    This release contains forward-looking statements relating to
anticipated financial performance. A variety of known and unknown risks and
uncertainties and other factors could cause actual results to differ
materially from the anticipated results or expectations. Please refer to
the company's Annual Report on Form 10-K for the fiscal year ended January
28, 2006 and the Form 10-Q for the period ending July 29, 2006 for more
information on risk factors that could cause actual results to differ. The
company does not undertake any obligation to release publicly any revisions
to such forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
    For additional information regarding third quarter 2006 sales
performance, please call the Payless ShoeSource Investor Relations phone
line at 1-800-626-3204. Select submenu 1, option 2.
SOURCE Payless ShoeSource, Inc.
http://www.paylessinfo.com
http://www.prnewswire.com/comp/136152.html/
CONTACT:
Ron Cooperman of Payless ShoeSource,
+1-785-295-6026