8-K

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K

                             CURRENT REPORT PURSUANT
                          TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                                  June 17, 2003
                Date of Report (Date of earliest event reported)


                            PAYLESS SHOESOURCE, INC.
             (Exact Name of Registrant as Specified in its Charter)


                                    DELAWARE
                 (State or Other Jurisdiction of Incorporation)

         1-14770                                           43-1813160
(Commission File Number)                       (IRS Employer Identification No.)



                           3231 Southeast Sixth Avenue
                            Topeka, Kansas 66607-2207
               (Address of Principal Executive Office) (Zip Code)


                                 (785) 233-5171
              (Registrant's Telephone Number, Including Area Code)




Items 5.  Other Events and Regulation FD Disclosure


         On June 17, 2003, Payless ShoeSource, Inc., a Delaware corporation (the
"Company"), issued a press release discussing current business conditions. The
full text of the press release is attached hereto as Exhibit 99.1 and
incorporated by reference herein.


(c) Exhibits.

     99.1  Press Release, dated June 17, 2003.






                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                               PAYLESS SHOESOURCE, INC.


Date: June 17, 2003                        By: /s/ Ullrich E. Porzig
                                               ---------------------------------
                                               Ullrich E. Porzig
                                               Senior Vice President
                                               Chief Financial Officer and
                                               Treasurer






                                  EXHIBIT INDEX




       Exhibit No.         Exhibit
       -----------         -------
                        
          99.1             Press Release, dated June 17, 2003.

EX-99.1

                                                                    EXHIBIT 99.1

For Immediate Release                    Contact: Timothy J. Reid (785) 295-6695

PAYLESS SHOESOURCE COMMENTS ON BUSINESS CONDITIONS

     TOPEKA, Kan., June 17, 2003 -- Payless ShoeSource, Inc. (NYSE:PSS) today
reported that the disappointing sales trends seen in May have persisted through
the first two weeks of June. The unseasonably cold weather in many parts of the
country has depressed consumer demand for sandals, a traditionally important
product category for the company in its second quarter. As a result of the
weaker than anticipated sales, there is currently a large surplus of seasonal
inventory throughout the footwear market. The company expects the market to be
increasingly promotional as retailers act aggressively to clear their seasonal
product. Payless intends to defend its market share and clear spring and summer
merchandise through a series of promotions and more aggressive markdowns.

         Therefore, for the second quarter, the company now expects low
double-digit negative same-store sales, with considerable pressure on margins,
and net earnings of a nominal loss to a slight profit. The pressure on sales,
margins and earnings is likely to persist in the second half of the year.

         In a separate matter, the company said that its $600 million credit
facility, entered into in 2000, consisting of a $400 million term loan and a
line of credit of $200 million, requires the company to comply with various
financial and other covenants. As of May 3, 2003, the company is in compliance
with all of the covenants under the Credit Facility. However, based on current
expectations, at the end of the second quarter ending August 2, 2003, the
company would not meet the most restrictive of those covenants, which is the
maintenance of a fixed charge coverage ratio, as defined in the credit
agreement. The company intends to amend its fixed charge coverage ratio
requirement. In addition, the company is evaluating its capital structure.

         While there can be no assurances that the company will be successful in
these efforts, the company believes it will be able to amend the Credit Facility
based on its positive cash flow from operations, the company's history of paying
down borrowings faster than required and its ample coverage levels under the
other covenants.

         The company's outstanding indebtedness on its term loan declined to
$200.0 million as of May 3, 2003, from $293.3 million as of May 4, 2002. As of
May 3, 2003, no amounts were drawn against the company's $200.0 million line of
credit. The availability under the line of credit has been reduced, however, by
$13.4 million in outstanding letters of credit.

         Payless ShoeSource, Inc. is the largest family footwear retailer in the
Western Hemisphere. The company operates a total of 5,005 stores offering
quality family footwear and accessories at affordable prices. In addition,
customers can buy shoes over the Internet through Payless.comsm, at
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 and expectations to differ
materially from the anticipated results or expectations. Please refer to the
company's 2002 Annual Report, Form 10-K for the fiscal year ended February 1,
2003, and the press release of February 28, 2003 regarding full year 2002
results for more information on these and other risk factors that could cause
actual results to differ. In addition, severe acute respiratory syndrome (SARS)
or other illnesses could cause a disruption in the company's supply chain or
consumer purchasing patterns. 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.