UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            -------------------------

                                    FORM 10-Q


[X]      Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934 For the quarterly period ended August 31, 2003
                                         OR
[ ]      Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934 For the transition period from _____to ______

                         Commission file number: 1-5767

                            CIRCUIT CITY STORES, INC.
             (Exact name of registrant as specified in its charter)

                 Virginia                                    54-0493875
      (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                     Identification No.)

            9950 Mayland Drive
            Richmond, Virginia                                  23233
(Address of principal executive offices)                     (Zip Code)

                                 (804) 527- 4000
              (Registrant's telephone number, including area code)

                                       N/A
              (Former name, former address, and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes |X| No ___

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes |X| No ___

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

                Class                        Outstanding at September 30, 2003
     Common Stock, par value $0.50                        209,462,914


A Table of Contents is included on Page 2 and an Index for  Exhibits is included
on Page 34.




                   CIRCUIT CITY STORES, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS



                                                                                              Page
                                                                                               No.

PART I.  FINANCIAL INFORMATION

      Item 1.     Financial Statements:

                     Consolidated Statements of Operations -
                     Three Months and Six Months Ended August 31, 2003 and 2002                 3

                     Consolidated Balance Sheets -
                     August 31, 2003 and February 28, 2003                                      4

                     Consolidated Statements of Cash Flows -
                     Six Months Ended August 31, 2003 and 2002                                  5

                     Notes to Consolidated Financial Statements                                 6

      Item 2.     Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                                    17

      Item 3.     Quantitative and Qualitative Disclosures about Market Risk                   28

      Item 4.     Controls and Procedures                                                      29

PART II.          OTHER INFORMATION

      Item 4.     Submission of Matters to a Vote of Security Holders                          30

      Item 5.     Other Information                                                            30

      Item 6.     Exhibits and Reports on Form 8-K                                             31

SIGNATURES                                                                                     33

EXHIBIT INDEX                                                                                  34


                                  Page 2 of 34


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                   Circuit City Stores, Inc. and Subsidiaries
                Consolidated Statements of Operations (Unaudited)
                  (Amounts in thousands except per share data)

                                                                 Three Months Ended                 Six Months Ended
                                                                      August 31                        August 31
                                                               2003             2002              2003           2002
                                                             ----------      ----------        ----------     ----------
Net sales and operating revenues                             $2,155,700      $2,221,204        $4,089,020     $4,339,447
Cost of sales, buying and warehousing                         1,668,325       1,695,316         3,153,335      3,300,209
                                                             ----------      ----------        ----------     ----------
Gross profit                                                    487,375         525,888           935,685      1,039,238

Finance (loss) income [Notes 1, 4,10 and 13]                   (133,310)         25,970          (155,415)        46,389
Selling, general and administrative expenses                    547,176         569,349         1,043,795      1,105,143
Interest expense                                                    303             550             1,310            550
                                                             ----------      ----------        ----------     ----------
Loss from continuing operations
     before income taxes                                       (193,414)        (18,041)         (264,835)       (20,066)
Income tax benefit                                              (69,169)         (6,856)          (96,666)        (7,625)
                                                             ----------      ----------        ----------     ----------
Net loss from continuing operations                            (124,245)        (11,185)         (168,169)       (12,441)
Net earnings from discontinued operations                             -          31,714                 -         60,952
                                                             ----------      ----------        ----------     ----------
Net (loss) earnings                                          $ (124,245)     $   20,529        $ (168,169)    $   48,511
                                                             ==========      ==========        ==========     ==========
Net (loss) earnings from:
    Continuing operations                                    $ (124,245)     $  (11,185)       $ (168,169)    $  (12,441)
                                                             ==========      ==========        ==========     ==========
    Discontinued operations attributed to:
       Circuit City common stock                             $        -      $   20,298        $        -     $   39,020
                                                             ==========      ==========        ==========     ==========
       CarMax Group common stock                             $        -      $   11,416        $        -     $   21,932
                                                             ==========      ==========        ==========     ==========
Weighted average common shares:
    Circuit City:
       Basic                                                    206,177         207,202           206,003        206,956
                                                             ==========      ==========        ==========     ==========
       Diluted                                                  206,177         207,202           206,003        206,956
                                                             ==========      ==========        ==========     ==========
    CarMax Group:
       Basic                                                          -          37,065                 -         37,013
                                                             ==========      ==========        ==========     ==========
       Diluted                                                        -          38,618                 -         38,722
                                                             ==========      ==========        ==========     ==========
Net (loss) earnings per share:
    Basic:
       Continuing operations                                 $    (0.60)     $    (0.05)       $    (0.82)    $    (0.06)
       Discontinued operations attributed to
           Circuit City common stock                                  -            0.10                 -           0.19
                                                             ----------      ----------        ----------     ----------
                                                             $    (0.60)     $     0.04        $    (0.82)    $     0.13
                                                             ==========      ==========        ==========     ==========
       Discontinued operations attributed to
           CarMax Group common stock                         $        -      $     0.31        $        -     $     0.59
                                                             ==========      ==========        ==========     ==========
    Diluted:
       Continuing operations                                 $    (0.60)     $    (0.05)       $    (0.82)    $    (0.06)
       Discontinued operations attributed to
           Circuit City common stock                                  -            0.10                 -           0.19
                                                             ----------      ----------        ----------     ----------
                                                             $    (0.60)     $     0.04        $    (0.82)    $     0.13
                                                             ==========      ==========        ==========     ==========
       Discontinued operations attributed to
           CarMax Group common stock                         $        -      $     0.30        $        -     $     0.57
                                                             ==========      ==========        ==========     ==========
Cash dividends paid per share on
    Circuit City common stock                                $   0.0175      $   0.0175        $   0.0350     $   0.0350
                                                             ==========      ==========        ==========     ==========
See accompanying notes to consolidated financial statements.

                                  Page 3 of 34

                   Circuit City Stores, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                    (Amounts in thousands except share data)

                                                                                          Aug. 31, 2003      Feb. 28, 2003
                                                                                           ( Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                                                                   $  633,072        $  884,670
Accounts receivable, net of allowance for doubtful accounts
     of $1,058 and $1,075                                                                      168,450           215,125
Retained interests in securitized receivables                                                  617,860           560,214
Merchandise inventory                                                                        1,554,432         1,409,736
Prepaid expenses and other current assets                                                       60,179            33,165
                                                                                            ----------        ----------

Total current assets                                                                         3,033,993         3,102,910

Property and equipment, net                                                                    625,532           649,593
Deferred income taxes                                                                           25,435            22,362
Other assets                                                                                    35,477            24,252
                                                                                            ----------        ----------

TOTAL ASSETS                                                                                $3,720,437        $3,799,117
                                                                                            ==========        ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                                            $1,186,880        $  963,701
Accrued expenses and other current liabilities                                                 126,685           128,776
Accrued income taxes                                                                                 -            44,453
Deferred income taxes                                                                           68,962           141,729
Current installments of long-term debt                                                           1,366             1,410
                                                                                            ----------        ----------

Total current liabilities                                                                    1,383,893         1,280,069

Long-term debt, excluding current installments                                                  10,630            11,254
Accrued straight-line rent                                                                     101,242            97,427
Other liabilities                                                                               68,169            68,792
                                                                                            ----------        ----------

TOTAL LIABILITIES                                                                            1,563,934         1,457,542
                                                                                            ----------        ----------

Stockholders' equity:
Circuit City common stock, $0.50 par value; 525,000,000 shares authorized;
     209,467,002 shares issued and outstanding at August 31, 2003
     (209,954,840 at February 28, 2003)                                                        104,734           104,977
Capital in excess of par value                                                                 839,724           849,083
Retained earnings                                                                            1,212,045         1,387,515
                                                                                            ----------        ----------

TOTAL STOCKHOLDERS' EQUITY                                                                   2,156,503         2,341,575
                                                                                            ----------        ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                  $3,720,437        $3,799,117
                                                                                            ==========        ==========

See accompanying notes to consolidated financial statements.


                                  Page 4 of 34



                   Circuit City Stores, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows (Unaudited)
                             (Amounts in thousands)

                                                                                                  Six Months Ended
                                                                                                      August 31
                                                                                               2003              2002
                                                                                            ----------        ----------
Operating Activities:
Net (loss) earnings                                                                          $(168,169)       $   48,511
Adjustments to reconcile net (loss) earnings to net cash used in
    operating activities of continuing operations:
    Net earnings from discontinued operations                                                        -           (60,952)
    Depreciation and amortization                                                               97,719            76,546
    Amortization of restricted stock awards                                                      6,808             9,892
    (Gain) loss on dispositions of property and equipment                                          (14)            5,275
    Provision for deferred income taxes                                                        (75,840)          (12,768)
    Changes in operating assets and liabilities:
       Decrease (increase) in accounts receivable, net                                          46,675           (14,705)
       Increase in retained interests in securitized receivables                               (57,646)          (73,357)
       Increase in merchandise inventory                                                      (144,696)         (423,120)
       Increase in prepaid expenses and other current assets                                   (27,014)             (774)
       (Increase) decrease in other assets                                                     (11,225)            3,872
       Increase in accounts payable                                                            223,179           160,462
       Decrease in accrued expenses and other current liabilities
           and accrued income taxes                                                            (48,460)         (105,508)
       Increase in accrued straight-line rent and other liabilities                              3,192             7,176
                                                                                             ---------        ----------
Net cash used in operating activities of continuing operations                                (155,491)         (379,450)
                                                                                             ---------        ----------
Investing Activities:
Purchases of property and equipment                                                            (85,698)          (75,278)
Proceeds from sales of property and equipment, net                                              12,055            15,641
                                                                                             ---------        ----------
Net cash used in investing activities of continuing operations                                 (73,643)          (59,637)
                                                                                             ---------        ----------

Financing Activities:
Payments on short-term debt, net                                                                     -              (397)
Principal payments on long-term debt                                                              (668)          (24,227)
Repurchase and retirement of common stock                                                      (13,941)                -
Issuances of Circuit City common stock, net                                                       (555)            8,682
Issuances of CarMax Group common stock, net                                                          -               744
Dividends paid                                                                                  (7,300)           (7,330)
                                                                                             ---------        ----------
Net cash used in financing activities of continuing operations                                 (22,464)          (22,528)
                                                                                             ---------        ----------

Cash used in discontinued operations - CarMax                                                        -            (4,025)
Cash used in discontinued operations - Divx                                                          -           (10,500)
                                                                                             ---------        ----------
Decrease in cash and cash equivalents                                                         (251,598)         (476,140)
Cash and cash equivalents at beginning of year                                                 884,670         1,248,246
                                                                                             ---------        ----------
Cash and cash equivalents at end of period                                                   $ 633,072        $  772,106
                                                                                             =========        ==========

See accompanying notes to consolidated financial statements.


                                  Page 5 of 34


                   CIRCUIT CITY STORES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1.   Basis of Presentation

     From February 7, 1997, to October 1, 2002, the common stock of Circuit City
     Stores,  Inc.  consisted of two common  stock series that were  intended to
     reflect the performance of the company's two  businesses.  The Circuit City
     Group common stock was intended to reflect the  performance  of the Circuit
     City consumer  electronics  stores and related operations and the shares of
     CarMax  Group  common  stock  reserved  for the  Circuit  City Group or for
     issuance to holders of Circuit  City Group common  stock.  The CarMax Group
     common  stock was  intended to reflect the  performance  of the CarMax auto
     superstores and related operations.

     Effective  October  1,  2002,  the  CarMax  auto  superstore  business  was
     separated  from the Circuit City consumer  electronics  business  through a
     tax-free  transaction  in which  CarMax,  Inc.,  formerly  a  wholly  owned
     subsidiary of Circuit City Stores, Inc., became an independent,  separately
     traded public  company.  Following the  separation,  the Circuit City Group
     common stock was renamed  Circuit  City common  stock.  All CarMax  results
     prior to the  separation  date are  presented as results from  discontinued
     operations. See Note 3 for an additional discussion of the separation.

     As of August 31, 2002,  65,923,200 shares of CarMax Group common stock were
     reserved  for the Circuit  City Group or for issuance to holders of Circuit
     City Group common  stock.  Excluding  shares  reserved for CarMax  employee
     stock incentive  plans,  the reserved CarMax Group shares  represented 64.0
     percent of the total outstanding and reserved shares of CarMax Group common
     stock at August 31, 2002.

     The company announced plans to sell its bankcard  operation in August 2003.
     The company has received bids for the bankcard  operation  from a number of
     interested  parties.  While the sales process is not final,  based on these
     bids,  the  company  expects  to incur a loss on the  sale of the  bankcard
     operation of approximately  $163 million,  approximately $105 million after
     income  taxes or 51 cents per  share.  Of the total  estimated  loss,  $148
     million,  approximately  $95 million after income taxes, has been reflected
     in the second quarter. The remaining $15 million, approximately $10 million
     after income taxes,  includes  anticipated  lease termination and severance
     costs.  The company expects the sale of the bankcard  operation to generate
     approximately  $295 million in cash and expects to complete the sale before
     the end of the  calendar  year.  Timing for  presentation  of the  bankcard
     business  as  a  discontinued   operation  on  the  company's  consolidated
     financial  statements  will be  affected  by the  extent  and  duration  of
     transition services required by a prospective purchaser.

     Due to the seasonal nature of the company's  business,  interim results are
     not  necessarily  indicative  of results for the entire  fiscal  year.  The
     company's  consolidated financial statements included herein should be read
     in conjunction with the notes to the audited financial  statements included
     in the company's fiscal 2003 Annual Report on Form 10-K.

2.   Accounting Policies

     The consolidated  financial statements of the company conform to accounting
     principles  generally accepted in the United States of America. The interim
     period  financial  statements  are  unaudited;  however,  in the opinion of
     management,  all  adjustments,  which  consist  only of  normal,  recurring
     adjustments,  necessary for a fair presentation of the interim consolidated
     financial  statements  have been included.  The February 28, 2003,  balance
     sheet data was derived from the audited  consolidated  financial statements
     included in the company's fiscal 2003 Annual Report on Form 10-K.

                                  Page 6 of 34

3.   Discontinued Operations

     Cash flows related to  discontinued  operations have been segregated on the
     consolidated statements of cash flows.

     (A)CarMax:

     On September 10, 2002, the company's  shareholders  approved the separation
     of the CarMax Group from Circuit City Stores,  Inc. and the company's board
     of directors authorized the redemption of the company's CarMax Group common
     stock and the  distribution  of  CarMax,  Inc.  common  stock to effect the
     separation.  On October 1, 2002,  the  separation was effective and CarMax,
     Inc.  became  an  independent,   separately  traded  public  company.  Each
     outstanding share of CarMax Group common stock was redeemed in exchange for
     one share of CarMax, Inc. common stock. In addition, each holder of Circuit
     City Group common stock received as a tax-free  distribution  0.313879 of a
     share of CarMax,  Inc.  common  stock for each share of Circuit  City Group
     common  stock  owned as of  September  16,  2002,  the record  date for the
     distribution. All CarMax results prior to the separation date are presented
     as results from  discontinued  operations.  The company recorded no gain or
     loss as a result of the separation.

     With the  separation,  CarMax paid a special  dividend of $28.4  million to
     Circuit  City  Stores,  Inc. in  recognition  of the  company's  continuing
     contingent  liability for leases related to 23 CarMax locations.  At August
     31, 2003,  the future  minimum fixed lease  obligations  on these 23 leases
     totaled approximately $466.4 million.

     The relationship between the company and CarMax is governed by a transition
     services  agreement,  under which the  company  provides  CarMax  services,
     including  human  resources,  administrative  services,  special  technical
     services,   payroll  processing,   benefits  administration,   payroll  tax
     services,  computer  center support and  telecommunication  services,  with
     initial  terms ranging from six to 24 months and varying  renewal  options.
     Under the agreement,  CarMax pays the company the allocable  portion of all
     direct and indirect  costs of  providing  these  services  plus 10 percent.
     Including  the 10 percent  markup,  the company  billed CarMax $2.2 million
     during the second  quarter of fiscal 2004 and $5.5  million  during the six
     months ended August 31, 2003, for services provided under the agreement.  A
     tax allocation  agreement,  which  generally  provides that  pre-separation
     taxes  attributable  to the  business of each party will be borne solely by
     that party, also was executed upon the separation.

     For the quarter ended August 31, 2002,  net earnings from the  discontinued
     CarMax  operations were $31.7 million.  For the six months ended August 31,
     2002,  net earnings  from the  discontinued  CarMax  operations  were $61.0
     million.

     (B)Divx:

     On June 16,  1999,  Digital  Video  Express  announced  that it would cease
     marketing the Divx home video system and discontinue operations.  At August
     31, 2003,  and at February 28, 2003,  current  liabilities  of $8.0 million
     related to the former Divx  operations  were reflected in accrued  expenses
     and other current liabilities on the consolidated balance sheets.  Payments
     of $10.5 million were made during the second quarter of fiscal 2003 and are
     reflected  on the  consolidated  statement of cash flows for the six months
     ended August 31, 2002.  For the three- and  six-month  periods ended August
     31, 2003 and 2002, the  discontinued  Divx  operations had no impact on the
     company's results of operations.

                                  Page 7 of 34

4.   Finance (Loss) Income

     For the three- and six-month  periods  ended August 31, 2003 and 2002,  the
     components of pretax finance (loss) income were as follows:



                                                            Three Months Ended                            Three Months Ended
                                                              August 31, 2003                               August 31, 2002
     (Amounts in millions)                     Private-Label      Bankcard       Total        Private-Label     Bankcard      Total
     --------------------------------------    ----------------------------------------       --------------------------------------
     Securitization income (loss)..........        $29.2           $(133.6)     $(104.4)          $30.8          $24.7        $55.5
     Less:   Payroll and fringe benefit
                 expenses..................          7.1               2.9         10.0             7.3            3.3         10.6
             Other direct expenses.........         13.1               5.8         18.9            10.3            8.6         18.9
                                               ----------------------------------------       --------------------------------------
     Finance income (loss).................        $ 9.0           $(142.3)     $(133.3)          $13.2          $12.8        $26.0
                                               ========================================       ======================================

                                                          Six Months Ended                                 Six Months Ended
                                                           August 31, 2003                                  August 31, 2002
     (Amounts in millions)                     Private-Label       Bankcard       Total        Private-Label    Bankcard      Total
     --------------------------------------    ----------------------------------------       --------------------------------------
     Securitization income (loss)..........        $57.6           $(148.9)     $ (91.3)           $59.9         $46.1        $106.0
     Less:   Payroll and fringe benefit
                 expenses..................         14.7               6.1         20.8             14.7           6.6          21.3
             Other direct expenses.........         26.2              17.1         43.3             20.4          17.9          38.3

     Finance income (loss).................        $16.7           $(172.1)     $(155.4)            $24.8        $21.6        $ 46.4
                                               ========================================       ======================================



     The securitization  loss for this year's second quarter includes the impact
     of pretax  charges of $148.0  million to reduce the  carrying  value of the
     company's  retained  interests  in the  bankcard  portfolio  to reflect the
     estimated net proceeds from the planned sale of the bankcard operation.

     Securitization  income  primarily  is  comprised of the gain on the sale of
     receivables  generated by the  company's  finance  operations,  income from
     retained  interests in the  receivables and income related to servicing the
     receivables,  as well as the impact of  increases  or decreases in the fair
     value of the retained interests. Finance (loss) income does not include any
     allocation of indirect costs or income. The company presents information on
     the performance of its finance operations on a direct basis to avoid making
     arbitrary  decisions regarding the periodic indirect benefits or costs that
     could be attributed  to these  operations.  Examples of indirect  costs not
     included are  corporate  expenses such as human  resources,  administrative
     services,  marketing,  information systems, accounting, legal, treasury and
     executive payroll, as well as retail store expenses.

5.   Stock-Based Compensation

     The company  accounts for stock options  granted to employees and directors
     using  the  intrinsic   value  method  of  accounting  in  accordance  with
     Accounting Principles Board Opinion No. 25, "Accounting For Stock Issued to
     Employees,"  and  related  interpretations.  As the  exercise  price of all
     options  granted  was equal to the market  price of the  underlying  common
     stock  on the  grant  date,  no  stock-based  compensation  cost  has  been
     recognized.  The  following  table  summarizes  the  effect  on net  (loss)
     earnings  and net (loss)  earnings per share if the company had applied the
     fair value  recognition  provisions  of Statement  of Financial  Accounting
     Standards No. 123, "Accounting for Stock-Based Compensation." The pro forma
     effect on the three- and  six-month  periods ended August 31, 2003 and 2002
     may not be  representative  of the pro forma effects on net (loss) earnings
     for future quarters.

                                  Page 8 of 34




                                                                       Three Months Ended            Six Months Ended
     (Amounts in thousands                                                 August 31                    August 31
     except per share data)                                            2003        2002            2003          2002
     -----------------------------------------------------------   ----------------------       ---------------------
     Net loss from continuing operations:
        As reported.............................................   $(124,245)    $(11,185)      $(168,169)   $(12,441)
        Less: fair value impact of employee
           stock compensation costs.............................       5,468        4,803           8,153       9,423
                                                                   ----------------------       ---------------------
        Pro forma...............................................   $(129,713)    $(15,988)      $(176,322)   $(21,864)
                                                                   ======================       =====================
     Net (loss) earnings attributed to Circuit City
        common stock:
        Continuing operations, as reported......................   $(124,245)    $(11,185)      $(168,169)   $(12,441)
        Discontinued operations, as reported....................           -       20,298               -      39,020
        Less: fair value impact of employee
           stock compensation costs.............................       5,468        4,803           8,153       9,423
                                                                   -----------------------      ---------------------
        Pro forma...............................................   $(129,713)    $  4,310       $(176,322)   $ 17,156
                                                                   ======================       =====================
     Net loss per share from continuing operations:
        Basic - as reported.....................................  $    (0.60)    $  (0.05)      $   (0.82)   $  (0.06)
        Basic - pro forma ......................................       (0.63)       (0.08)          (0.86)      (0.11)
        Diluted - as reported ..................................       (0.60)       (0.05)          (0.82)      (0.06)
        Diluted - pro forma ....................................       (0.63)       (0.08)          (0.86)      (0.11)
     Net (loss) earnings per share attributed to
        Circuit City common stock:
        Basic - as reported.....................................   $   (0.60)    $   0.04       $   (0.82)   $   0.13
        Basic - pro forma.......................................       (0.63)        0.02           (0.86)       0.08
        Diluted - as reported ..................................       (0.60)        0.04           (0.82)       0.13
        Diluted - pro forma.....................................       (0.63)        0.02           (0.86)       0.08


     For the purpose of computing the pro forma  amounts  indicated  above,  the
     fair  value of each  option  on the date of grant was  estimated  using the
     Black-Scholes  option-pricing  model. The weighted average assumptions used
     in the model were as follows:

 

                                                             Three Months Ended                    Six Months Ended
                                                                  August 31                            August 31
                                                             2003             2002               2003             2002
                                                           ------------------------            -------------------------
     Expected dividend yield..........................       1.0%            0.3%                1.1%             0.3%
     Expected stock volatility........................      75.7%           69.8%               75.8%            69.8%
     Risk-free interest rates.........................       2.2%            4.7%                2.5%             4.7%
     Expected lives (in years)........................       4.7             4.6                 4.6              4.6


     Using these  assumptions in the  Black-Scholes  model, the weighted average
     fair  value  of  options  granted  was $4 per  option  for the  three-  and
     six-month  periods ended August 31, 2003, and $13 per option for the three-
     and six-month periods ended August 31, 2002.

6.   Income Taxes

     The  effective  income tax rate was 35.8 percent for the three months ended
     August 31, 2003, and 36.5 percent for the six months ended August 31, 2003,
     compared  with 38.0  percent  for the three- and  six-month  periods  ended
     August 31, 2002. The decrease is attributed to lower state and local income
     taxes.

7.   Net (Loss) Earnings per Share

     The company reported a loss from continuing operations for the three- and
     six-month periods ended August 31, 2003 and 2002. The diluted net loss per
     share is the same as the basic net loss per share for

                                  Page 9 of 34

     those periods because including any potentially  dilutive  securities would
     be antidilutive to the net loss per share from continuing operations.

     For the three- and  six-month  periods ended August 31, 2003, no options or
     restricted  stock were included in the  computation of diluted net loss per
     share  because  the  company  reported a loss from  continuing  operations.
     Options to purchase  20.2 million  shares of Circuit City common stock with
     exercise prices ranging from $5.61 to $27.21 and restricted stock amounting
     to 3.6 million  shares were  outstanding at August 31, 2003. For the three-
     and six-month periods ended August 31, 2002, no options or restricted stock
     were included in the  computation of diluted net loss per share because the
     company  reported a loss from  continuing  operations.  Options to purchase
     12.0  million  shares of Circuit  City common  stock with  exercise  prices
     ranging from $9.94 to $40.81 per share and  restricted  stock  amounting to
     2.6 million shares were outstanding at August 31, 2002.

     Basic net earnings per share from  discontinued  operations  attributed  to
     CarMax  Group  common  stock is  computed  by dividing  net  earnings  from
     discontinued  operations  attributed  to CarMax  Group  common stock by the
     weighted average number of shares of CarMax Group common stock outstanding.
     Diluted net earnings per share from discontinued  operations  attributed to
     CarMax  Group  common  stock is  computed  by dividing  net  earnings  from
     discontinued  operations attributed to CarMax Group common stock by the sum
     of the  weighted  average  number of shares of CarMax  Group  common  stock
     outstanding and the dilutive  potential  CarMax Group common stock.  CarMax
     became an independent, separately traded public company on October 1, 2002.
     All CarMax  results prior to the  separation  date are presented as results
     from discontinued operations.

     Reconciliations  of the numerator and  denominator of the basic and diluted
     net earnings  per share  calculations  for the CarMax  Group are  presented
     below.



     (Amounts in thousands                                              Three Months Ended              Six Months Ended
     except per share data)                                               August 31, 2002                August 31, 2002
     -----------------------------------------------------------      ----------------------          --------------------
     Weighted average common shares.............................               37,065                          37,013
     Dilutive potential common shares:
        Options.................................................                1,548                           1,697
        Restricted stock........................................                    5                              12
                                                                               ------                          ------
     Weighted average common shares and
        dilutive potential common shares........................               38,618                          38,722
                                                                               ======                          ======

     Net earnings available to common shareholders..............              $11,416                         $21,932
     Basic net earnings per share...............................              $  0.31                         $  0.59
     Diluted net earnings per share.............................              $  0.30                         $  0.57


8.   Restricted Cash

     Cash and cash equivalents held by the company's regulated  subsidiaries and
     not available for general corporate  purposes were $102.1 million at August
     31, 2003, and $48.8 million at February 28, 2003.

9.   Common Stock Repurchased

     In January 2003, the company's board of directors authorized the repurchase
     of up to $200 million of common stock.  As of August 31, 2003,  the company
     had  repurchased  and retired  approximately  2.7 million  shares of common
     stock at a cost of $13.9  million.  Based on the market value of the common
     stock at August 31, 2003,  the remaining  $186.1 million  authorized  would
     allow the company to repurchase up to  approximately 9 percent of the 209.5
     million shares then outstanding.

                                 Page 10 of 34

10.  Securitizations

     The company enters into securitization  transactions to finance credit card
     receivables  originated by its finance operations.  The company has created
     two  special  purpose   subsidiaries  to  facilitate  these  securitization
     transactions in accordance  with the isolation  provisions of SFAS No. 140.
     The finance  operations sell credit card receivables to the special purpose
     subsidiaries,  which,  in turn,  sell these  receivables to  securitization
     master trusts. At the time of these sales, the company  recognizes gains or
     losses as a component  of finance  income.  See Note 4.  Private-label  and
     co-branded  Visa  credit  card  receivables,  collectively  referred  to as
     private-label  receivables,  are securitized  through one master trust, and
     MasterCard and Visa credit card  receivables,  collectively  referred to as
     bankcard receivables, are securitized through a separate master trust.

     The  company  has  plans to sell its  bankcard  operation  and  expects  to
     complete  the sale  before the end of the  calendar  year.  The company may
     continue  to  provide   transition   services  required  by  a  prospective
     purchaser.

     Each master trust periodically  issues securities backed by the receivables
     in that master trust.  Each master trust has issued multiple series of term
     asset-backed   securities  having  fixed  initial  principal  amounts.   In
     addition,  each  master  trust  has  issued a series  of  variable  funding
     asset-backed  securities having a variable  principal amount.  Investors in
     the variable  funding  asset-backed  securities  are generally  entitled to
     receive monthly interest payments and have committed to acquire  additional
     variable funding  interests up to a stated amount until a stated commitment
     termination date.  Neither master trust agreement  provides for recourse to
     the company for credit losses on the securitized receivables.  However, the
     fair value of the company's retained  interests in securitized  receivables
     will  be  directly   affected  by  credit   losses  on  those   securitized
     receivables.  The finance  operations  continue to service the  securitized
     receivables for a fee.

     Circuit  City  retains  the  rights to receive  the  excess of the  finance
     charges and fees generated by the securitized  receivables over the related
     interest paid to investors,  servicing costs and credit losses. The company
     also holds various  subordinated  asset-backed  securities,  which serve as
     credit  enhancement  for the  asset-backed  securities  held by third-party
     investors.

     The  securitization  agreements  require  that  the  aggregate  outstanding
     principal balance of the securitized  receivables exceed a specified amount
     and that the yield on the securitized  receivables  exceed specified rates.
     In addition,  the variable funding  securitization  agreements require that
     the company meet financial  tests  relating to minimum  tangible net worth,
     current  ratios  and  debt-to-capital   ratios  and  that  the  securitized
     receivables meet specified performance levels relating to delinquency rates
     and principal payment rates. If these financial tests or performance levels
     are not met, or if certain other events occur, it would constitute an early
     amortization  event, in which case the principal payment dates for the term
     series  would  be  accelerated,  the  variable  funding  commitments  would
     terminate and the variable funding investors would begin to receive monthly
     principal  payments  until paid in full.  The company  and the  securitized
     receivables  were in compliance  with these financial tests and performance
     levels at August 31, 2003.

     The finance  operations  receive  annual  servicing  fees  approximating  2
     percent  of  the   outstanding   principal   balance  of  the   securitized
     receivables.  The servicing fees specified in the securitization agreements
     adequately  compensate the finance operations for servicing the securitized
     receivables.   Accordingly,  no  servicing  asset  or  liability  has  been
     recorded.

                                 Page 11 of 34



     (A)Private-Label:
                                                                                          At August 31         At February 28
     (Dollar amounts in millions)                                                             2003                  2003
     -------------------------------------------------------------------------------     -------------         ---------------
     Total principal amount of credit card receivables managed......................       $1,595.5               $1,636.1
     Principal amount of receivables securitized....................................       $1,569.2               $1,592.2
     Principal amount of receivables held for sale..................................       $   26.3               $   43.9
     Unused capacity of the private-label variable funding program..................       $   90.9               $   29.5
     Aggregate receivables 31 days or more delinquent...............................       $   88.6               $   72.1
     Aggregate receivables 31 days or more delinquent as a percent
        of total principal amount of credit card receivables managed................            5.6%                   4.4%


     The principal  amount of defaults net of  recoveries  was $25.1 million for
     the  three-month  period ended August 31, 2003,  and $16.7  million for the
     three-month period ended August 31, 2002. For the three months ended August
     31, 2003,  serviced  receivables  averaged $1,559.7 million,  compared with
     $1,289.2 million for the same period last fiscal year. The principal amount
     of defaults net of recoveries as an annualized  percent of average serviced
     receivables  was 6.4 percent for the  three-month  period  ended August 31,
     2003, and 5.2 percent for the three-month period ended August 31, 2002.

     The principal  amount of defaults net of  recoveries  was $47.6 million for
     the  six-month  period  ended August 31,  2003,  and $34.2  million for the
     six-month period ended August 31, 2002. For the six months ended August 31,
     2003,  serviced  receivables  averaged  $1,564.2  million,   compared  with
     $1,292.9 million for the same period last fiscal year. The principal amount
     of defaults net of recoveries as an annualized  percent of average serviced
     receivables was 6.1 percent for the six-month period ended August 31, 2003,
     and 5.3 percent for the six-month period ended August 31, 2002.

     No new  private-label  credit card receivable  securitization  transactions
     were  completed  during the  second  quarter of fiscal  2004.  The  company
     completed   a   $500   million   private-label   credit   card   receivable
     securitization  transaction  during  the first  quarter  of fiscal  2004 to
     replace maturing term securitizations. In addition, the company renewed its
     private-label variable funding program, which the company also refers to as
     a warehouse  conduit,  during the first quarter of fiscal 2004. The company
     completed   a   $300   million   private-label   credit   card   receivable
     securitization  transaction  during  the first  quarter  of fiscal  2003 to
     replace maturing term securitizations.

     The following  table  summarizes  cash flows  received from and paid to the
     securitization trust.



                                                                   Three Months Ended      Six Months Ended
                                                                      August 31               August 31
     (Amounts in millions)                                         2003        2002        2003        2002
     -----------------------------------------------------------   ------------------     ------------------
     Proceeds from new securitizations..........................   $ 52.5     $192.0*     $ 88.1     $422.0*
     Proceeds from collections reinvested
         in previous credit card securitizations................   $543.8     $257.0*     $870.7     $420.3*
     Servicing fees received....................................   $  7.7     $  5.7      $ 15.1     $ 11.4
     Other cash flows received on
         retained interests**...................................   $ 30.8     $ 19.8      $ 61.9     $ 46.0


     *To be  consistent  with the fiscal  2004  presentation,  the  fiscal  2003
     amounts reflect changes in the presentation of securitization cash flows.

     **This amount represents cash flows received from retained  interests other
     than servicing fees,  including cash flows from the interest-only strip and
     cash above the minimum required level in cash collateral accounts.

     In  accordance  with the allocated  carrying  value method as prescribed by
     SFAS No.  140,  gains on sales of  receivables  sold to the  securitization
     trusts were $12.9 million for the quarter ended August 31, 2003,  and $19.5
     million  for  the  quarter  ended  August  31,  2002.  Gains  on  sales  of
     receivables  sold to the  securitization  trusts were $21.9 million for the
     six months  ended  August 31,  2003,  and $33.0  million for the six months
     ended August 31, 2002.

                                 Page 12 of 34

     The sum of the  excess  cash flows  from  receivables  that are sold to the
     securitization  trust  is  referred  to as an  interest-only  strip  and is
     carried at fair value based on estimates  of these future cash flows.  When
     determining  the  fair  value  of  the  interest-only  strip,  the  company
     estimates  future cash flows using  estimates  of key  assumptions  such as
     finance charge income; charge-offs,  net of recoveries;  payment rates; and
     discount rates appropriate for the type of asset and risk.  Expected future
     cash  flows  also are based  upon the  market's  expectation  about  future
     movements in interest rates as reflected in forward interest rate curves.

     Retained interests in securitized  private-label  receivables are comprised
     of the following components.



     (Amounts in millions)                                          At August 31, 2003         At February 28, 2003
     ------------------------------------------------------        --------------------       ----------------------
     Interest-only strip...................................               $ 90.9                      $ 79.1
     Subordinated securities...............................                276.9                       160.1
                                                                          ------                      ------
     Retained interests in securitized
        private-label receivables..........................               $367.8                      $239.2
                                                                          ======                      ======


     At August 31, 2003, the weighted-average  life of the retained interests in
     securitized receivables ranged from 0.3 years to 1.6 years. At February 28,
     2003, the  weighted-average  life of the retained  interests in securitized
     receivables ranged from 0.5 years to 2.2 years.

     The following tables present the key economic assumptions used in measuring
     the fair value of private-label  retained interests at August 31, 2003, and
     February 28, 2003,  and a  sensitivity  analysis  showing the  hypothetical
     effect on the fair  value of those  interests  when  there are  unfavorable
     variations from the assumptions  used. Key valuation  assumptions at August
     31, 2003,  and February 28, 2003,  are based on portfolio  performance  and
     market conditions.  The discount rates are used to calculate the fair value
     of the subordinated  asset-backed  securities and the interest-only  strip.
     The  subordinated  asset-backed  securities  were valued  primarily using a
     discount rate of 9 percent.  The  interest-only  strip was valued with a 15
     percent discount rate. The default rates used in valuing the  interest-only
     strip  are  forecasted  for  future  months  and  represent  a  loss  curve
     associated  with a static pool of  receivables.  The ranges provided in the
     tables  below  reflect  the high and low  months  on the  loss  curve.  The
     weighted  average  default  rates are weighted by the  relative  receivable
     balance for each month and incorporate an adjustment for net present value.
     These  sensitivities  are hypothetical and should be used with caution.  In
     the following tables, the effect of a variation in a particular  assumption
     on the fair value of the  private-label  retained  interests is  calculated
     without changing any other assumption; in actual circumstances,  changes in
     one  factor  may  result in changes  in  another,  which  might  magnify or
     counteract the sensitivities.



                                                                               At August 31, 2003
                                                                                         Impact on Fair            Impact on Fair
                                               Assumptions     Weighted-Average            Value of 10%             Value of 20%
     (Dollar amounts in millions)                 Used              Assumptions           Adverse Change           Adverse Change
     ----------------------------------     -------------------------------------------------------------------------------------
     Monthly payment rate..............           11.3%              11.3%                    $4.9                      $ 9.8
     Annual default rate...............        7.1%-13.3%             9.5%                    $7.4                      $14.6
     Annual discount rate..............        5.1%-15.0%             9.8%                    $3.4                      $ 6.7

                                                                              At February 28, 2003
                                                                                         Impact on Fair            Impact on Fair
                                               Assumptions     Weighted-Average            Value of 10%             Value of 20%
     (Dollar amounts in millions)                 Used              Assumptions           Adverse Change           Adverse Change
     ----------------------------------     -------------------------------------------------------------------------------------
     Monthly payment rate..............            10.9%             10.9%                    $6.1                      $10.7
     Annual default rate...............        7.1%-12.9%             8.9%                    $7.1                      $14.2
     Annual discount rate..............        8.3%-15.0%            10.7%                    $1.6                      $ 3.2



                                 Page 13 of 34



     (B)Bankcard:
                                                                                            At August 31            At February 28
     (Dollar amounts in millions)                                                               2003                     2003
     --------------------------------------------------------------------------------     ----------------        ------------------
     Total principal amount of credit card receivables managed.......................         $1,420.6                 $1,537.8
     Principal amount of receivables securitized.....................................         $1,380.6                 $1,527.0
     Principal amount of receivables held for sale...................................         $   40.1                 $   10.7
     Unused capacity of the bankcard variable funding program........................         $  129.1                 $  166.8
     Aggregate receivables 31 days or more delinquent................................         $  120.2                 $  127.9
     Aggregate receivables 31 days or more delinquent as a percent of
        total principal amount of credit card receivables managed....................              8.5%                     8.3%


     The principal  amount of defaults net of  recoveries  was $54.4 million for
     the  three-month  period ended August 31, 2003,  and $46.2  million for the
     three-month period ended August 31, 2002. For the three months ended August
     31, 2003,  serviced  receivables  averaged $1,451.0 million,  compared with
     $1,490.5 million for the same period last fiscal year. The principal amount
     of defaults net of recoveries as an annualized  percent of average serviced
     receivables  was 15.0 percent for the  three-month  period ended August 31,
     2003, and 12.4 percent for the three-month period ended August 31, 2002.

     The principal  amount of defaults net of recoveries  was $110.9 million for
     the  six-month  period  ended August 31,  2003,  and $99.6  million for the
     six-month period ended August 31, 2002. For the six months ended August 31,
     2003,  serviced  receivables  averaged  $1,477.0  million,   compared  with
     $1,493.0 million for the same period last fiscal year. The principal amount
     of defaults net of recoveries as an annualized  percent of average serviced
     receivables  was 15.0  percent for the  six-month  period  ended August 31,
     2003, and 13.3 percent for the six-month period ended August 31, 2002.

     No new  bankcard  receivable  securitization  transactions  were  completed
     during the second  quarter of fiscal  2004.  The  company  completed a $550
     million bankcard  receivable  securitization  transaction  during the first
     quarter  of  fiscal  2004 to  replace  maturing  term  securitizations.  In
     addition,  the company renewed its bankcard variable funding program, which
     the company also refers to as a warehouse conduit, during the first quarter
     of fiscal 2004. The company  completed a $470 million  bankcard  receivable
     securitization  transaction  during  the second  quarter of fiscal  2003 to
     replace maturing term securitizations.

     The following  table  summarizes  cash flows  received from and paid to the
     securitization trust.



                                                                     Three Months Ended            Six Months Ended
                                                                         August 31                    August 31
     (Amounts in millions)                                           2003         2002           2003           2002
     -----------------------------------------------------------  ---------------------        -----------------------
     Proceeds from new securitizations..........................    $    -      $155.2*         $ 56.7        $285.2*
     Proceeds from collections reinvested
         in previous credit card securitizations................    $262.1      $147.8*         $385.5        $310.7*
     Servicing fees received....................................    $  6.8      $   6.7         $ 14.0        $ 13.9
     Other cash flows received on
         retained interests**...................................    $  7.4      $  23.8         $ 18.8        $ 48.2


     *To be  consistent  with the fiscal  2004  presentation,  the  fiscal  2003
     amounts reflect changes in the presentation of securitization cash flows.

     **This amount represents cash flows received from retained  interests other
     than servicing fees,  including cash flows from the interest-only strip and
     cash above the minimum required level in cash collateral accounts.

     In  accordance  with the allocated  carrying  value method as prescribed by
     SFAS No. 140,  losses on sales of  receivables  sold to the  securitization
     trusts were $2.4 million for the quarter  ended  August 31, 2003,  compared
     with gains on sales of  receivables  of $1.6 million for the quarter  ended
     August 31, 2002. Losses on sales of receivables sold to the  securitization
     trusts were $4.4 million for the six months ended August 31, 2003, compared
     with gains on sales of receivables of $6.3 million for the six months ended
     August 31, 2002.

                                 Page 14 of 34

     At August 31, 2003, the fair value of the retained interests in securitized
     bankcard  receivables  was $250.0  million.  The fair value of the retained
     interests in the bankcard  portfolio  at August 31,  2003,  was  determined
     based on the  estimated  net proceeds from the planned sale of the bankcard
     operation.  At February 28, 2003, the fair value of the retained  interests
     in securitized  bankcard  receivables was $321.0 million. The fair value of
     the retained  interests in the bankcard portfolio at February 28, 2003, was
     determined based on the present value of expected future cash flows.

11.  Financial Derivatives

     The company enters into interest rate cap agreements in connection with its
     private-label receivable securitization transactions.  During the first six
     months of fiscal  2004,  the company did not  purchase or sell any interest
     rate caps. The total notional amount of interest rate caps  outstanding was
     $512.9  million at August 31, 2003,  and at February  28,  2003.  Purchased
     interest  rate  caps  are  included  in  net  accounts  receivable  on  the
     consolidated  balance sheets and had a fair value of $5.6 million at August
     31, 2003, and $4.2 million at February 28, 2003. Written interest rate caps
     are included in accounts payable on the consolidated balance sheets and had
     a fair  value of $5.6  million  at August  31,  2003,  and $4.2  million at
     February 28, 2003.

     The market and credit risks  associated with interest rate caps are similar
     to those relating to other types of financial  instruments.  Market risk is
     the exposure  created by potential  fluctuations  in interest  rates and is
     directly  related to the  product  type,  agreement  terms and  transaction
     volume. The company has entered into offsetting interest rate cap positions
     and,  therefore,  does not anticipate  significant market risk arising from
     interest  rate caps.  Credit  risk is the  exposure  to  nonperformance  of
     another party to an agreement. The company mitigates credit risk by dealing
     with highly rated bank counterparties.

12.  Recent Accounting Pronouncements

     In November 2002, the Financial  Accounting Standards Board issued Emerging
     Issues Task Force No.  00-21,  "Accounting  for Revenue  Arrangements  with
     Multiple   Deliverables."   EITF  No.  00-21  addresses  when  and  how  an
     arrangement involving multiple deliverables should be divided into separate
     units of accounting, as well as how the arrangement consideration should be
     measured  and  allocated  to  the  separate  units  of  accounting  in  the
     arrangement.  The  provisions  of EITF No. 00-21 will be effective  for the
     company's  third  quarter of fiscal  2004.  The company does not expect the
     adoption  of this  standard  to have a  material  impact  on the  company's
     financial position, results of operations or cash flows.

     In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation
     of  Variable  Interest  Entities."  FIN No. 46  addresses  how to  identify
     variable  interest  entities and provides  guidance as to how a company may
     assess its interests in a variable interest entity for purposes of deciding
     whether  consolidation of that entity is required.  Effective  September 1,
     2003, the company adopted FIN No. 46. The adoption of this standard did not
     have a material  impact on the  company's  financial  position,  results of
     operations or cash flows.

13.  Segment Information

     Due to changes in the management  reporting  structure that occurred during
     the first  quarter of fiscal 2004,  the company has  identified  its retail
     operation and its finance  operations as reportable  segments in accordance
     with the provisions of SFAS No. 131,  "Segment  Reporting."  These segments
     are identified and managed by the company based on the company's management
     reporting  structure and on the nature of the products and services offered
     by each segment. The retail operation segment is engaged in the business of
     selling   brand-name   consumer   electronics,   personal   computers   and
     entertainment  software.  The finance operations issue and service bankcard
     and  private-label  credit cards,  including a co-branded Visa credit card.
     The finance  operations  are conducted  through the company's  wholly owned
     subsidiary First North American  National Bank, which is a  limited-purpose
     credit card bank.  FNANB sells its credit card  receivables to consolidated
     special purpose subsidiaries wholly owned by the company, which, in

                                 Page 15 of 34

     turn,  sell these  receivables  to  securitization  master  trusts that are
     off-balance-sheet  qualifying special purpose entities. See Note 4 and Note
     10 for additional discussion of the finance operations.

     The company's  finance  operations  segment is evaluated by management on a
     pretax basis.  The company  includes  substantially  all  depreciation  and
     amortization and interest expense within the retail operation segment.  The
     accounting policies of the segments are the same as those set forth in Note
     2 to the company's audited consolidated  financial statements  incorporated
     by reference in the company's fiscal 2003 Annual Report on Form 10-K.

     Revenue by reportable  segment and the  reconciliation  to the consolidated
     statements of operations were as follows:



                                                                  Three Months Ended             Six Months Ended
                                                                      August 31                     August 31
     (Amounts in millions)                                         2003        2002              2003           2002
     ----------------------------------------------------------  --------------------        ------------------------
     Retail operation..........................................  $2,155.7    $2,221.2        $4,089.0        $4,339.4
     Finance operations........................................    (104.4)       55.5           (91.3)          106.0
                                                                 --------------------        ------------------------
     Total revenue.............................................   2,051.3     2,276.7         3,997.7         4,445.4
     Less:  finance operations revenue not included
          in net sales and operating revenues*.................    (104.4)       55.5           (91.3)          106.0
                                                                 --------------------        ------------------------
     Net sales and operating revenues .........................  $2,155.7    $2,221.2        $4,089.0        $4,339.4
                                                                 ====================        ========================


     *Finance operations revenue is included in finance (loss) income,  which is
     reported separately on the statements of operations.


     (Loss)  earnings  from  continuing   operations   before  income  taxes  by
     reportable segment and the reconciliation to the consolidated statements of
     operations were as follows:



                                                                     Three Months Ended              Six Months Ended
                                                                          August 31                     August 31
     (Amounts in millions)                                           2003           2002            2003            2002
     ----------------------------------------------------------   ------------------------        ----------------------
     Retail operation*.........................................    $ (60.1)         $(44.0)        $(109.4)       $(66.5)
     Finance operations........................................     (133.3)           26.0          (155.4)         46.4
                                                                  ------------------------        ----------------------
     Loss from continuing operations before income
         taxes.................................................    $(193.4)         $(18.0)        $(264.8)       $(20.1)
                                                                  ========================        ======================


     *All corporate expenses are included in the retail operation.

     Total  assets  by  reportable   segment  and  the   reconciliation  to  the
     consolidated balance sheets were as follows:



                                                                  At August 31         At February 28
     (Amounts in millions)                                            2003                 2003
     ---------------------------------------------------------   -------------        ----------------
     Retail operation.........................................      $4,542.8              $4,439.7
     Finance operations.......................................       1,318.5                 762.4
                                                                    --------              --------
     Total assets before intercompany eliminations............       5,861.3               5,202.1
     Less:  intercompany eliminations.........................       2,140.9               1,403.0
                                                                    --------              --------
     Total assets.............................................      $3,720.4              $3,799.1
                                                                    ========              ========


14.  Reclassifications

     Certain prior year amounts have been reclassified to conform to the current
     presentation.

                                 Page 16 of 34

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

From  February 7, 1997,  to October 1, 2002,  the common  stock of Circuit  City
Stores,  Inc. consisted of two common stock series that were intended to reflect
the performance of our two  businesses.  The Circuit City Group common stock was
intended to reflect the  performance  of the Circuit City  consumer  electronics
stores and  related  operations  and the  shares of CarMax  Group  common  stock
reserved  for the Circuit  City Group or for issuance to holders of Circuit City
Group  common  stock.  The CarMax Group common stock was intended to reflect the
performance of the CarMax auto superstores and related operations.

Effective  October 1, 2002,  the CarMax auto  superstore  business was separated
from  the  Circuit  City  consumer   electronics  business  through  a  tax-free
transaction in which CarMax, Inc., formerly a wholly owned subsidiary of Circuit
City Stores,  Inc.,  became an  independent,  separately  traded public company.
Following  the  separation,  the  Circuit  City Group  common  stock was renamed
Circuit City common stock.  All CarMax results prior to the separation  date are
presented as results from discontinued operations.  See Note 3 for an additional
discussion of the separation.

As of August 31,  2002,  65,923,200  shares of CarMax  Group  common  stock were
reserved  for the Circuit  City Group or for issuance to holders of Circuit City
Group  common  stock.  Excluding  shares  reserved  for  CarMax  employee  stock
incentive  plans,  the reserved CarMax Group shares  represented 64.0 percent of
the total outstanding and reserved shares of CarMax Group common stock at August
31, 2002.

We  announced  plans to sell our  bankcard  operation  in August  2003.  We have
received bids for the bankcard  operation  from a number of interested  parties.
While the sales process is not final,  based on these bids, we expect to incur a
loss on the  sale of the  bankcard  operation  of  approximately  $163  million,
approximately  $105 million  after  income  taxes or 51 cents per share.  Of the
total  estimated  loss,  $148  million,  approximately  $95 million after income
taxes,  has been  reflected in the second  quarter.  The  remaining $15 million,
approximately  $10  million  after  income  taxes,  includes  anticipated  lease
termination and severance costs. We expect the sale of the bankcard operation to
generate  approximately  $295  million in cash.  We expect to complete  the sale
before the end of the calendar  year.  Timing for  presentation  of the bankcard
business as a discontinued  operation on our consolidated  financial  statements
may be affected by the extent and duration of transition  services required by a
prospective purchaser.

CRITICAL ACCOUNTING POLICIES

See the discussion of critical accounting policies under Management's Discussion
and Analysis of Results of Operations and Financial  Condition  incorporated  by
reference in our fiscal 2003 Annual Report on Form 10-K.  These policies  relate
to  the  calculation  of the  value  of  retained  interests  in  securitization
transactions,  the  calculation  of the liability for lease  termination  costs,
accounting  for  pension  liabilities  and  accounting  for  cash  consideration
received from vendors.  The fair value of the retained  interests in securitized
private-label  receivables  at August 31, 2003,  and at February  28, 2003,  was
based on the present value of expected future cash flows.  The fair value of the
retained  interests in  securitized  bankcard  receivables at February 28, 2003,
also was based on the present  value of expected  future cash flows.  Due to our
decision  to sell  the  bankcard  operation,  the  fair  value  of the  retained
interests in securitized  bankcard  receivables at August 31, 2003, was based on
the estimated net proceeds from the planned sale of the bankcard operation.

RESULTS OF OPERATIONS

Our  operations,  in common  with other  retailers  in  general,  are subject to
seasonal  influences.  Historically,  we have realized more of our net sales and
net earnings in the fourth  quarter,  which includes the majority of the holiday
selling  season,  than in any other  fiscal  quarter.  The net  earnings  of any
quarter are seasonally  disproportionate  to net sales since  administrative and
certain  operating   expenses  remain  relatively   constant  during  the  year.
Therefore, quarterly results should not be relied upon as necessarily indicative
of results for the entire fiscal year.

                                 Page 17 of 34

Non-GAAP Financial Measures

In this  Management's  Discussion  and  Analysis,  we present  information  that
includes and excludes individual cost items to provide greater  understanding of
the  effects  of  these  items on our  operating  performance.  These  operating
performance  measures  provide a basis for investors to evaluate our performance
and financial  position.  Our method of computing these measures may differ from
the methods used by other companies. In addition,  these measures do not replace
financial measures computed in accordance with accounting  principles  generally
accepted  in the  United  States of  America  as a  measure  of our  results  of
operations and financial condition.

Net Sales and Operating Revenues

Total sales for the second  quarter of fiscal 2004  decreased 3 percent to $2.16
billion from $2.22  billion in last fiscal  year's  second  quarter.  Comparable
store sales  decreased 5 percent for the second  quarter of fiscal  2004.  Total
sales for the first six  months of  fiscal  2004  decreased  6 percent  to $4.09
billion  from  $4.34  billion  for the first six  months  of last  fiscal  year.
Comparable  store  sales  decreased 7 percent for the first six months of fiscal
2004.  A store is  included in  comparable  store sales after the store has been
open  for a  full  year.  Relocated  stores  are  included  immediately  in  the
comparable store base.

Our sales pace during the first two months of the quarter reflected  significant
drops in average retail prices as well as slight declines in store traffic.  The
sales pace improved in virtually all categories during the month of August, when
we  produced a  comparable  store sales  increase of 1 percent  against a strong
prior year increase of 12 percent.  Throughout the quarter,  we generated strong
sales growth in new video  technologies,  including digital  big-screens and LCD
and plasma  thin-screen  products;  digital imaging;  and DVD movie titles.  The
strengthening   during  the  month  of  August  was  especially   pronounced  in
back-to-school  products such as personal computer  hardware and software,  game
software, wireless communications, portable audio and portable video. We believe
that  these  categories  all  benefited  from a new  back-to-school  advertising
program,  including  both  print  and  television,  that  helped  drive  traffic
increases.  At the end of the quarter, we successfully  completed our transition
to two new wireless carriers - Verizon Wireless and T-Mobile USA.

The percent of merchandise  sales represented by each major product category for
the three- and six-month periods ended August 31, 2003 and 2002 was as follows:



                                                                 Three Months Ended             Six Months Ended
                                                                      August 31                    August 31
                                                                2003            2002           2003           2002
                                                              ----------------------          ----------------------
Video.....................................................      39%              39%            39%            39%
Audio.....................................................      14               14             14             15
Information technology....................................      36               36             35             35
Entertainment.............................................      11               11             12             11
                                                              ----------------------          ----------------------
Total.....................................................     100%             100%           100%           100%
                                                              ======================          ======================


We sell extended warranty programs on behalf of unrelated third parties that are
the primary obligors.  Under these  third-party  warranty  programs,  we have no
contractual  liability to the  customer.  The total  extended  warranty  revenue
included  in total  sales was $77.8  million,  or 3.6  percent of sales,  in the
second quarter of fiscal 2004,  compared with $84.0  million,  or 3.8 percent of
sales, in last fiscal year's second quarter. The total extended warranty revenue
included in total  sales was $150.2  million,  or 3.7  percent of sales,  in the
first half of fiscal  2004,  compared  with  $171.9  million,  or 4.0 percent of
sales,  in last fiscal  year's  second half.  The  decrease  primarily is due to
declines in average retail prices, which result in consumers purchasing warranty
contracts on fewer products.

                                 Page 18 of 34

The following table provides details on our retail units:



                                                         Aug. 31, 2003        Feb. 28, 2003        Aug. 31, 2002
                                                         -------------        -------------        -------------
Superstores.......................................            612                  611                  606
Mall-based Express stores.........................             13                   15                   17
                                                              ---                  ---                  ---
Total.............................................            625                  626                  623
                                                              ===                  ===                  ===


We expect to open approximately 10 Superstores and relocate 15 Superstores to 18
Superstores in the current fiscal year. In the second quarter of fiscal 2004, we
opened  one  Superstore,   relocated  one  Superstore,   fully  remodeled  three
Superstores  and closed two  mall-based  Express  stores.  For the first half of
fiscal  2004,  we opened  one  Superstore,  relocated  four  Superstores,  fully
remodeled four Superstores and closed two mall-based Express stores.

The following table provides details on our fiscal 2004 new, relocated and fully
remodeled Superstores.



                                           First Quarter      Second Quarter      Third Quarter     Fourth Quarter      Fiscal 2004
                                              Actual            Actual              Estimated          Estimated         Estimated
--------------------------------------   ------------------------------------------------------------------------------------------
New Superstores.......................           -                1                     6                 3                 10
Relocated Superstores.................           3                1                     6               5 - 8            15 - 18
Fully remodeled Superstores...........           1                3                     -                 -                  4
                                         ------------------------------------------------------------------------------------------
Total.................................           4                5                    12               8 - 11            29 - 32
                                         ==========================================================================================



Cost of Sales, Buying and Warehousing

The gross  profit  margin was 22.6  percent  of sales in the  second  quarter of
fiscal 2004, compared with 23.7 percent in the same period last fiscal year. For
the first six months of fiscal 2004, the gross profit margin was 22.9 percent of
sales,  compared  with 23.9  percent for the same period last fiscal  year.  The
lower  gross  profit  margin  reflects  competitive  pricing  and  shifts in the
merchandise mix within the major product categories;  increased inventory shrink
as we move more  product  onto the sales  floor;  and the  reduction in extended
warranty sales, which carry above average gross profit margins.

Finance (Loss) Income

Our finance  operations are conducted  through our wholly owned subsidiary First
North American National Bank, which is a limited-purpose credit card bank. FNANB
sells its credit card receivables to consolidated, special purpose, wholly owned
subsidiaries  which, in turn, sell these  receivables to  securitization  master
trusts  that are  off-balance-sheet  qualifying  special  purpose  entities.  We
collectively  refer to the  private-label  and the  co-branded  Visa credit card
programs  as  the  private-label  program,  and  we  collectively  refer  to the
MasterCard and Visa credit card programs as the bankcard program.  We have plans
to sell our bankcard operation and expect to complete the sale before the end of
the calendar year.

We securitize the private-label credit card receivables through one master trust
and the bankcard  receivables  through a separate  master  trust.  At August 31,
2003,  approximately  58 percent of the total principal  amount of private-label
receivables  outstanding  had been created under the co-branded Visa credit card
program.  At February 28, 2003,  approximately 47 percent of the total principal
amount of  private-label  receivables  outstanding  had been  created  under the
co-branded  Visa  credit card  program.  We expect  that  principal  receivables
created under the co-branded Visa credit card program will continue to represent
a greater percentage of the private-label principal receivables.

Securitizations  are  accounted  for as sales in  accordance  with  Statement of
Financial Accounting Standards No. 140, and securitization  income is recognized
at the  time the  receivables  are  securitized.  Gains  or  losses  on sales of
receivables  primarily reflect the difference between the carrying amount of the
receivables sold and the sum of the cash proceeds received and the fair value of
the retained  interests in the  securitized  receivables.  When  receivables are
sold, we receive cash, retain subordinated securities and retain rights to

                                 Page 19 of 34

receive the excess cash flows,  referred to as  interest-only  strips,  that the
receivables  will produce during their life. The excess cash flows represent the
excess of the finance charges and fees generated by the securitized  receivables
over the related interest paid to investors,  servicing costs and credit losses.
We continue to service the securitized receivables for a fee. For the three- and
six-month  periods  ended August 31, 2003,  serviced  private-label  receivables
averaged  $1.56  billion,  compared with $1.29 billion for the same periods last
fiscal year. Serviced bankcard  receivables averaged $1.45 billion for the three
months ended August 31, 2003,  compared  with $1.49  billion for the same period
last fiscal year.  For the six months ended August 31, 2003,  serviced  bankcard
receivables  averaged  $1.48  billion,  compared  with $1.49 billion for the six
months ended August 31, 2002.

The finance  operations  produced a pretax loss of $133.3 million in this year's
second quarter,  compared with pretax income of $26.0 million in the same period
last fiscal year. This year's second quarter loss includes pretax income of $9.0
million  from the  private-label  credit card  operation,  compared  with pretax
income of $13.2  million in last fiscal  year's  second  quarter.  Private-label
securitization  income was reduced by increased  charge-offs,  which were partly
offset by increased  finance charge  collections in this year's second  quarter.
Other direct expenses increased as the number of active  private-label  accounts
increased.

This year's  second  quarter  finance loss also includes a pretax loss of $142.3
million  from the  bankcard  operation,  compared  with  pretax  income of $12.8
million in the same period last fiscal year.  This year's second  quarter pretax
loss from the bankcard  operation  includes  pretax charges of $148.0 million to
reduce the carrying value of our retained interests in the bankcard portfolio to
reflect  the  estimated  net  proceeds  from the  planned  sale of the  bankcard
operation.  In connection  with the planned sale, we expect to incur  additional
pretax   charges,   including  lease   termination   and  severance   costs,  of
approximately $15 million.

The fair value of the private-label interest-only strip totaled $90.9 million at
August 31, 2003,  and $79.1  million at February  28, 2003.  The increase in the
fair value of the  interest-only  strip was  primarily due to an increase in the
amount  of   receivables   in  the  master  trust  that  were  impacted  by  the
implementation of discounting. We began to sell private-label receivables to the
master  trust at a discount  in  December  2002.  As a result,  2 percent of the
principal  amount of receivables  sold on or after December 1, 2002, are treated
as finance charge  receivables in the  securitization  trust and  collections of
those  receivables are treated as finance charge  collections,  thereby boosting
yield to the securitization  trust. This causes an increase in the fair value of
the interest-only strip and a corresponding decrease in proceeds received on the
sale of receivables.

When  determining the fair value of the  private-label  interest-only  strip, we
estimate future cash flows using  estimates of key  assumptions  such as finance
charge income; charge-offs, net of recoveries; payment rates; and discount rates
appropriate for the type of asset and risk.  Expected future cash flows also are
based upon the market's  expectation about future movements in interest rates as
reflected  in  forward  interest  rate  curves.  We review the  assumptions  and
estimates used in determining the fair value of the private-label  interest-only
strip on a quarterly  basis.  If the  assumptions  change or the actual  results
differ from the projected results, securitization income will be affected.

Finance income is reduced by payroll,  fringe  benefits and other costs directly
associated with the management and securitization of the credit card portfolios.
Payroll and fringe benefit  expenses  generally vary with the amount of serviced
receivables.  Other direct expenses  include  third-party  data processing fees,
rent,  credit promotion  expenses,  Visa and MasterCard fees and other operating
expenses.  Finance  income does not include any  allocation of indirect costs or
income.  Examples of indirect costs not included are corporate  expenses such as
human  resources,   administrative  services,  marketing,  information  systems,
accounting,  legal,  treasury  and  executive  payroll,  as well as retail store
expenses.  See Note 1, Note 4, Note 10 and Note 13 to the consolidated financial
statements  in  this  report  for  additional   information  about  our  finance
operations.

Selling, General and Administrative Expenses

The selling,  general and administrative expense ratio was 25.4 percent of sales
in the second  quarter of fiscal 2004,  compared  with 25.6 percent for the same
period last fiscal year. For the first six months of both fiscal

                                 Page 20 of 34

2004 and  fiscal  2003,  the ratio was 25.5  percent of sales.  Interest  income
recorded as a reduction to selling, general and administrative expenses was $1.7
million for the  three-month  period ended August 31, 2003,  compared  with $2.2
million for the same period last fiscal  year.  For the six months  ended August
31, 2003,  interest income was $4.1 million,  compared with $5.0 million for the
same period last fiscal year.

Reductions in payroll and fringe  benefits were the largest  contributors to the
second  quarter  expense  reduction.  The second  quarter  expense  savings also
reflect a shift in advertising expenditures from the lower volume periods of the
year,  which included the first two months of the second quarter,  to the higher
volume back-to-school and holiday periods. Savings from payroll, fringe benefits
and advertising were partly offset by higher rent and occupancy expenses related
to new  and  relocated  stores  and  costs  associated  with  new  merchandising
displays. Improvement in the expense ratio was limited by the sales decline.

The fiscal 2004 second quarter expenses  included $18.2 million of remodel costs
and $4.0  million of  relocation  costs,  and the  fiscal  2003  second  quarter
expenses  included $21.3 million of remodel costs and $4.5 million of relocation
costs.  Remodeling  and  relocation  costs for the second quarter of fiscal 2004
included  accelerated  depreciation on assets planned to be taken out of service
as a result of the store  remodeling  and relocation  program.  As of August 31,
2003, we had relocated one  Superstore in each of the St. Louis,  Mo.;  Chicago,
Ill.;  Fort Myers,  Fla.; and  Harrisonburg,  Va.  markets,  fully remodeled one
Superstore  in each of the  Los  Angeles,  Calif.;  and San  Francisco,  Calif.,
markets and two Superstores in the Washington,  D.C.  market,  and completed the
refixturing  of 217  Superstores.  Pre-opening  expenses,  including  marketing,
payroll,  and building  maintenance  and utility  costs,  for new and  relocated
stores were $1.4 million for the three  months  ended August 31, 2003,  and $3.1
million for the six months ended August 31, 2003.  As of August 31, 2002, we had
relocated two  Superstores,  completed  more than 225 of the  approximately  300
video department  remodels  planned for fiscal 2003 and completed  substantially
all  of  the  approximately  300  full-store  lighting  upgrades  scheduled  for
completion during fiscal 2003. Pre-opening expenses for new and relocated stores
were $2.1 million for the three  months ended August 31, 2002,  and $2.8 million
for the six months ended August 31, 2002.

Excluding   remodel  and   relocation   expenses,   the  selling,   general  and
administrative  expense  ratio for the second  quarter was 24.4 percent of sales
this year, compared with 24.5 percent in last fiscal year's second quarter.  For
these same periods,  selling,  general and  administrative  expenses,  excluding
remodel and relocation  costs,  declined $18.5  million,  or 3 percent.  For the
first half of fiscal  2004,  the  selling,  general and  administrative  expense
ratio,  excluding remodel and relocation  expenses,  was 24.6 percent,  compared
with 24.7 percent in the first half of fiscal 2003.

The impact of remodel and relocation  costs on the expense ratio is presented in
the following tables.



                                                                                        Three Months Ended
                                                                                            August 31
(Amounts in millions)                                                            2003                       2002
------------------------------------------------------------------        --------------------------------------------
Before remodel and relocation expenses............................        $525.0      24.4%          $543.5     24.5%
Remodel expenses..................................................          18.2       0.8             21.3      0.9
Relocation expenses...............................................           4.0       0.2              4.5      0.2
                                                                          --------------------------------------------
Selling, general and administrative expenses......................        $547.2      25.4%          $569.3     25.6%
                                                                          ============================================

                                                                                        Six Months Ended
                                                                                            August 31
(Amounts in millions)                                                             2003                     2002
------------------------------------------------------------------      ------------------------------------------------
Before remodel and relocation expenses............................      $1,005.1      24.6%        $1,071.3     24.7%
Remodel expenses..................................................          29.5       0.7             27.8      0.7
Relocation expenses...............................................           9.2       0.2              6.0      0.1
                                                                        ------------------------------------------------
Selling, general and administrative expenses......................      $1,043.8      25.5%        $1,105.1     25.5%
                                                                        ================================================



                                Page 21 of 34

Interest Expense

Interest  expense was $0.3  million for the three  months ended August 31, 2003,
and $1.3 million for the six months ended August 31, 2003.  Interest expense was
$0.6 million for both the three- and  six-month  periods  ended August 31, 2002.
The  increase in  interest  expense for the six months  ended  August 31,  2003,
reflects  interest paid as a result of completed audits of prior year income tax
returns.

Income Taxes

The effective income tax rate was 35.8 percent for the three months ended August
31, 2003,  and 36.5  percent for the six months ended August 31, 2003,  compared
with 38.0 percent for the three- and  six-month  periods  ended August 31, 2002.
The decrease is attributed to lower state and local income taxes.

Net (Loss) Earnings from Continuing Operations

The net loss from  continuing  operations  was $124.2  million,  or 60 cents per
share,  in the second quarter ended August 31, 2003,  compared with the net loss
from continuing operations of $11.2 million, or 5 cents per share, in the second
quarter of last fiscal year. For the six-month period ended August 31, 2003, the
net loss from continuing  operations was $168.2 million,  or 82 cents per share,
compared with the net loss from  continuing  operations of $12.4  million,  or 6
cents per share, for the same period last fiscal year.

The net loss from continuing  operations in this year's second quarter  includes
the impact of pretax  charges of $148.0  million to reduce the carrying value of
our retained  interests in the bankcard  portfolio to reflect the  estimated net
proceeds  from the planned sale of the bankcard  operation,  pretax  expenses of
$18.2 million related to the full remodeling of three stores and the refixturing
of 208 stores and $4.0 million in pretax  relocation  expenses.  The  relocation
expenses include  accelerated  depreciation on assets planned to be taken out of
service  as a result  of  future  relocations.  Excluding  valuation  reductions
related  to the  bankcard  portfolio,  the net loss per  share  from  continuing
operations would have been 14 cents in this year's second quarter, compared with
4 cents in the same period  last fiscal  year.  Second  quarter  fiscal 2004 and
second  quarter  fiscal 2003 remodel and  relocation  costs  totaled 7 cents per
share.  Excluding valuation  reductions and the remodel and relocation expenses,
the net loss per share  from  continuing  operations  would have been 7 cents in
this year's second  quarter,  compared with net earnings per share of 3 cents in
last fiscal year's second quarter.

The net loss from continuing  operations for the first six months of this fiscal
year includes the impact of the pretax  valuation  reductions of $177.9  million
related to the bankcard  portfolio,  pretax expenses of $29.5 million related to
the full  remodeling of four stores and the  refixturing  of 217 stores and $9.2
million in pretax relocation expenses. Excluding valuation reductions related to
the bankcard portfolio,  the net loss per share from continuing operations would
have been 27 cents in this year's first half,  compared with 4 cents in the same
period last fiscal year.  For the first six months of fiscal  2004,  remodel and
relocation  costs  totaled 12 cents per share,  compared with 10 cents per share
for the first six months of fiscal 2003.  Excluding valuation reductions and the
remodel  and  relocation  expenses,  the net  loss  per  share  from  continuing
operations would have been 15 cents in this year's first half, compared with net
earnings per share of 6 cents in last fiscal year's first half.

                                 Page 22 of 34

The impact of the bankcard  valuation  reductions and the remodel and relocation
costs on the net loss per share from  continuing  operations is presented in the
following table.



                                                               Three Months Ended             Six Months Ended
                                                                     August 31                    August 31
                                                               2003            2002         2003           2002
                                                            -----------------------       ----------------------
Net (loss) earnings per share before bankcard
     valuation reductions, remodel and
     relocation expenses.................................    $(0.07)         $ 0.03       $(0.15)         $ 0.06
Remodel expenses..........................................    (0.06)          (0.06)        0.09)          (0.08)
Relocation expenses.......................................    (0.01)          (0.01)       (0.03)          (0.02)
                                                            -----------------------       ----------------------
Net loss per share before bankcard valuation
     reductions...........................................    (0.14)          (0.04)       (0.27)          (0.04)
Bankcard valuation reductions*............................    (0.46)          (0.01)       (0.55)          (0.02)
                                                              ----------------------      ----------------------
Net loss per share from continuing operations.............   $(0.60)         $(0.05)      $(0.82)         $(0.06)
                                                             ======================       ======================


* The  bankcard  valuation  reductions  for the periods  ended  August 31, 2003,
reflect the  expected  net cash  proceeds  from the planned sale of the bankcard
portfolio.  The bankcard  valuation  reductions for the periods ended August 31,
2002, reflect projected cash flows from the bankcard portfolio.

Net Earnings from Discontinued Operations

On October 1, 2002,  we completed the  separation of the CarMax auto  superstore
business from the Circuit City consumer  electronics business through a tax-free
transaction in which CarMax, Inc., formerly a wholly owned subsidiary of Circuit
City Stores, Inc., became an independent,  separately traded public company. All
CarMax results for periods prior to the separation date are presented as results
from  discontinued  operations.  For the  quarter  ended  August 31,  2002,  net
earnings from the discontinued CarMax operations were $31.7 million. For the six
months  ended  August  31,  2002,  net  earnings  from the  discontinued  CarMax
operations were $61.0 million.

Operations Outlook

In August 2003, we announced plans to sell the bankcard operation. Based on bids
received  from a number of interested  parties,  we expect to incur an after-tax
loss of approximately $105 million,  or 51 cents per share, $95 million of which
we  recognized  in the  second  quarter.  The  remaining  $10  million  includes
anticipated  lease  termination  and severance  costs. We expect the sale of the
bankcard operation to generate  approximately $295 million in cash. We expect to
complete  the sale of the bankcard  operation  by the end of the calendar  year,
enabling us to further  focus our  attention on the core retail  business and to
eliminate  a source  of  earnings  volatility  from  our  business.  Timing  for
presentation  of  the  bankcard  business  as a  discontinued  operation  on our
consolidated financial statements will be affected by the extent and duration of
transition  services  required by a  prospective  purchaser.  Our  private-label
finance operation plays a strategic role in our operations,  and therefore,  any
analysis of options for the private-label  operation,  including a possible sale
or outsourcing arrangement, must reflect that role.

Our  store  revitalization  program  reflects  the  importance  that we place on
improving  sales as a means to drive  earnings  growth.  While we are focused on
reducing  our cost  structure,  we believe  that the gross  profit  earned  from
incremental sales combined with the fixed expense leverage resulting from higher
sales will also  contribute  to an increase in earnings.  Our efforts to provide
superior  consumer  electronics  solutions  through the improved store base will
continue into fiscal 2005 and beyond.

At August 31, 2003, 111 Superstores,  or 18 percent of our 612 Superstores,  had
been newly  constructed,  relocated or fully  remodeled  since the  beginning of
fiscal 2001. We expect that percentage to reach  approximately 20 percent by the
end of the current fiscal year and  approximately  30 percent by the end of next
fiscal year.

                                 Page 23 of 34

We have  identified  approximately  100 trade  areas that are  suitable  for new
stores.  We have not  announced a plan to build new stores in these trade areas,
but they  represent  potential  for  geographic  expansion.  We  expect  to open
approximately 10 new stores in the current fiscal year.

We now have 18 relocated stores that have been open for more than six months. In
the first full six months  following grand opening,  these 18 stores produced an
average  sales lift that was 28  percentage  points higher than the remainder of
the store base in the same time period and  produced an internal  rate of return
of approximately 20 percent.  Based on these strong results,  we accelerated our
relocation  program to include 15 Superstores to 18 Superstores this fiscal year
and a target of 50 Superstores in the next fiscal year,  primarily  depending on
real estate  availability.  We anticipate  that the results from our  relocation
program may moderate as we relocate additional stores.

In  addition  to new  construction,  relocations  and full  remodels,  our store
revitalization  program also  involves  changes to existing  store  fixtures and
operations.  During  the  first  half of this  fiscal  year,  we  completed  the
refixturing of 217 Superstores.  We plan to complete the refixturing  program in
the final five stores in the third quarter of the current  fiscal year.  The new
fixtures  make  virtually  all products  available on the sales floor and create
better product adjacencies.  In February 2003, we simplified our store operating
model to reduce compensation costs and create a staffing model that supports the
way customers prefer to shop today.

We expect net cash  expenditures  and non-cash  expenses  related to remodeling,
relocations and refixturings to total  approximately $140 million in this fiscal
year.  We  anticipate  that  approximately  $80  million of that  amount will be
capitalized and approximately $60 million will be expensed, reducing fiscal 2004
earnings per share by an estimated 21 cents. The capital expenditures are net of
landlord  reimbursements for property  improvement  expenditures.  The estimated
expense  amount  includes  approximately  $50 million of non-cash  expenses  for
leasehold  impairment  reserves  on stores we plan to relocate  and  accelerated
depreciation  on  assets  we plan to take  out of  service  as a  result  of our
remodelings and  relocations.  As we continue to relocate  stores,  we expect to
incur  additional  leasehold   termination  costs,  with  the  amount  primarily
dependent on the length of remaining lease terms and sublease opportunities.

Recent Accounting Pronouncements

In November  2002,  the Financial  Accounting  Standards  Board issued  Emerging
Issues Task Force No. 00-21,  "Accounting for Revenue Arrangements with Multiple
Deliverables."  EITF No. 00-21  addresses when and how an arrangement  involving
multiple  deliverables  should be divided into separate units of accounting,  as
well as how the  arrangement  consideration  should be measured and allocated to
the separate units of accounting in the arrangement.  The provisions of EITF No.
00-21 will be effective  for our third  quarter of fiscal 2004. We do not expect
the  adoption  of this  standard  to have a  material  impact  on our  financial
position, results of operations or cash flows.

In January 2003, the FASB issued FASB  Interpretation No. 46,  "Consolidation of
Variable  Interest  Entities."  FIN No. 46  addresses  how to identify  variable
interest  entities  and  provides  guidance  as to how a company  may assess its
interests  in a  variable  interest  entity for  purposes  of  deciding  whether
consolidation  of that  entity is  required.  Effective  September  1, 2003,  we
adopted FIN No. 46. The adoption of this standard did not have a material impact
on our financial position, results of operations or cash flows.

FINANCIAL CONDITION

Liquidity and Capital Resources

At August 31, 2003, we had cash and cash equivalents of $633.1 million, compared
with $884.7  million at February  28,  2003.  The lower cash  balance  primarily
reflects the merchandise  inventory  increase  related to anticipated  increased
sales during the back-to-school and holiday seasons.

Operating Activities. In the six months ended August 31, 2003, Circuit City used
net cash of $155.5  million in operating  activities,  compared with net cash of
$379.5 million used in the six months ended August 31, 2002.

                                 Page 24 of 34

The net cash used of  $155.5  million  is  primarily  due to the net  loss,  the
increase in  merchandise  inventory  and the  increase in retained  interests in
securitized receivables, partially offset by the increase in accounts payable.

Merchandise inventory increased $144.7 million in the first six months of fiscal
2004, compared with an increase of $423.1 million in the same period last fiscal
year. The $278.4 million difference primarily reflects the fiscal 2003 inventory
build  occurring  earlier  than in the current  fiscal  year.  Accounts  payable
increased  by $223.2  million in the first six months of fiscal  2004,  compared
with an increase of $160.5  million in the first six months of last fiscal year.
The $62.7  million  difference  also relates to the earlier  inventory  build in
fiscal 2003.

Retained interests in securitized  receivables increased by $57.6 million in the
first six months of this fiscal year, compared with an increase of $73.4 million
in the first six months of last  fiscal  year.  The  current  year  increase  in
retained interests in securitized  receivables  reflects the new securitizations
entered into during the first quarter of this fiscal year,  partly offset by the
$148.0 million of pretax valuation reductions related to the planned sale of the
bankcard   operation.   We   completed  a  $550  million   bankcard   receivable
securitization   transaction  and  a  $500  million  private-label  credit  card
receivable securitization transaction during the first quarter of fiscal 2004 to
replace  maturing  term  securitizations.   We  also  renewed  variable  funding
asset-backed  securities  programs,  which we refer  to as  warehouse  conduits,
during the first  quarter of fiscal 2004.  We completed a $470 million  bankcard
receivable  securitization  transaction and a $300 million  private-label credit
card receivable securitization  transaction during the first half of fiscal 2003
to replace maturing term securitizations.

Investing Activities. Net cash used in investing activities was $73.6 million in
the six months ended August 31, 2003,  compared  with net cash of $59.6  million
used in  investing  activities  in the first six  months  of last  fiscal  year.
Capital  expenditures  increased  to $85.7  million  in the first six  months of
fiscal  2004 from $75.3  million in the  comparable  period  last  fiscal  year.
Capital  spending  in the first six  months of  fiscal  2004  includes  spending
related  to  the  opening  of  one  new  Superstore,   the  relocation  of  four
Superstores,  the  remodeling of four  Superstores  and the  refixturing  of the
merchandise  areas in 217  Superstores.  Capital  spending  in the first half of
fiscal 2003 includes  spending  related to the opening of three new Superstores,
four relocated  Superstores,  video department  remodeling in approximately  225
Superstores and full-store lighting upgrades in approximately 300 Superstores.

Financing Activities. Net cash used in financing activities was $22.5 million in
the first six months of both fiscal 2004 and fiscal 2003. In January  2003,  our
board of directors  authorized  the  repurchase  of up to $200 million of common
stock.  As of August 31, 2003, we had repurchased and retired 2.7 million shares
of common  stock at a cost of $13.9  million.  Based on the market  value of the
common stock at August 31, 2003, the remaining  $186.1 million  authorized would
allow for the repurchase of up to  approximately  9 percent of the 209.5 million
shares then outstanding.

On June 27, 2003, we entered into a $500  million,  four-year  revolving  credit
facility  secured by inventory and certain accounts  receivables.  This facility
will be used to support  letters of credit as well as for  short-term  borrowing
needs and generally  will bear interest at a spread over LIBOR or at prime.  The
facility  is  scheduled  to mature in June  2007 and  provides  for an option to
extend the facility by one year. The maximum credit extensions,  including loans
and  outstanding  letters of credit,  permitted under the credit facility on any
date will be determined using a borrowing base calculated as a percentage of our
eligible  inventory  and accounts  receivable  as of that date. If the remaining
borrowing  availability  under the  facility  falls  below  $100  million,  cash
dividends  and stock  repurchases  are limited to an aggregate of $75 million in
any fiscal year. In addition,  if the difference  between the borrowing base and
the outstanding credit extensions under the facility falls below $50 million for
five consecutive  business days, all proceeds from the sale of inventory must be
applied on a daily  basis to payment of  amounts  owed under the  facility.  The
facility has customary  representations and warranties,  covenants and events of
default.  This credit facility  replaced the $210 million in committed  seasonal
lines, which were terminated on the same date. At August 31, 2003, there were no
short-term borrowings on this facility. At August 31, 2003,  outstanding letters
of credit  related to this facility were $43.6  million,  leaving $456.4 million
available for borrowing.

                                 Page 25 of 34

At August 31, 2003, the aggregate  principal  amount of securitized  credit card
receivables  totaled  $1.60 billion  under the  private-label  program and $1.42
billion under the bankcard  program.  At August 31, 2003, the unused capacity of
the  private-label  variable  funding  program was $90.9  million and the unused
capacity  of the  bankcard  variable  funding  program was $129.1  million.  Our
securitization  agreements  do not  provide  recourse  to the company for credit
losses on securitized receivables.

During the second quarter, our private-label finance operation began selectively
extending  18-month,  interest-free  promotional  financing.  In the  past,  our
private-label  finance operation had generally limited promotional  financing to
12-month  terms.  Depending  on the  financial  success  of the  promotion,  our
private-label  receivables may increase  significantly.  This potential increase
could require  additional  financing,  which could include  additional or larger
public or private securitizations during the current fiscal year.

We  anticipate  that we will be able to expand or enter into new  securitization
agreements to meet the future needs of our finance operations.  However, adverse
changes in the  performance  of our  credit  card  portfolios  or changes in the
asset-backed  securities  market  could  result  in our  having  to hold  larger
retained  interests in future  securitizations.  The  private-label and bankcard
securitization  agreements  require that the aggregate  principal balance of the
securitized  receivables  exceed a  specified  amount  and that the yield on the
securitized  receivables  exceed  specified  rates.  In  addition,  the variable
funding securitization  agreements require that we meet financial tests relating
to minimum  tangible net worth,  current ratios and  debt-to-capital  ratios and
that the securitized  receivables meet specified  performance levels relating to
delinquency  rates and principal  payment  rates.  If these  financial  tests or
performance  levels are not met,  or if certain  other  events  occur,  it would
constitute an early  amortization  event,  in which case the  principal  payment
dates for the term series would be accelerated, the variable funding commitments
would  terminate  and the  variable  funding  investors  would  begin to receive
monthly principal payments until paid in full.

We expect that  available  cash  resources,  credit  facilities,  sale-leaseback
transactions,  landlord  reimbursements and cash generated by operations will be
sufficient to fund capital  expenditures and working capital for the foreseeable
future.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements,  which are subject to risks and
uncertainties. The provisions of the Private Securities Litigation Reform Act of
1995  provide  companies  with  a  "safe  harbor"  when  making  forward-looking
statements.  This "safe  harbor"  encourages  companies  to provide  prospective
information  about their companies  without fear of litigation.  We wish to take
advantage of the "safe harbor"  provisions of the Act. Our  statements  that are
not historical facts,  including statements about management's  expectations for
fiscal 2004 and beyond, are forward-looking statements and involve various risks
and uncertainties.

Forward-looking statements are estimates and projections reflecting our judgment
and involve a number of risks and uncertainties  that could cause actual results
to differ  materially  from those suggested by the  forward-looking  statements.
Although  we  believe  that  the  estimates  and  projections  reflected  in the
forward-looking  statements are  reasonable,  our  expectations  may prove to be
incorrect.  The United States retail industry, and the specialty retail industry
in particular,  are dynamic by nature and have undergone  significant changes in
recent  years.  Our  ability  to  anticipate  and  successfully  respond  to the
continuing  challenges  of our  industry is key to achieving  our  expectations.
Important  factors that could cause  actual  results to differ  materially  from
estimates or projections contained in our forward-looking statements include:

o    When or whether we will be successful in selling the bankcard operation and
     the terms of any such  sale;
o    The timing and amount of any  charges to income  that may be  required as a
     result of selling the bankcard operation;
o    Changes  in the  amount  and  degree of  promotional  intensity  exerted by
     current  competitors and potential new competition from  competitors  using
     either similar or alternative  methods or channels of distribution  such as
     online and telephone shopping services and mail order;
o    Changes in general U.S. or regional U.S. economic conditions including, but
     not limited to, consumer credit  availability,  consumer credit delinquency
     and default rates, interest rates, inflation, personal discretionary

                                 Page 26 of 34

     spending levels, trends in consumer retail spending, both in general and in
     our  product  categories,  and  consumer  sentiment  about the  economy  in
     general;
o    The  presence  or absence of, or consumer  acceptance  of, new  products or
     product  features in the merchandise  categories we sell and changes in our
     actual merchandise sales mix;
o    Significant changes in retail prices for products we sell;
o    Changes in  availability  or cost of  financing  for  working  capital  and
     capital expenditures,  including  securitization financing and financing to
     support development of our business;
o    Lack of availability or access to sources of inventory;
o    Inability to liquidate excess inventory should excess inventory develop;
o    Failure  to  successfully  implement  sales and  profitability  improvement
     programs for our Circuit City  Superstores,  including our  remodeling  and
     relocation process and our recent change in compensation structure;
o    Changes in the  performance of the  private-label  or bankcard  portfolios,
     including  material changes in cardholder default rates or payment rates;
o    Our ability to attract and retain an effective  management  team or changes
     in the costs or availability of a suitable work force to manage and support
     our  service-driven  operating  strategies;
o    Changes in production or  distribution  costs or costs of materials for our
     advertising;
o    Availability of appropriate  real estate  locations for relocations and new
     stores;
o    Successful  implementation of our various customer service  initiatives;
o    Negative  investment  returns in our pension plan;
o    The imposition of new  restrictions  or  regulations  regarding the sale of
     products  and/or  services  we sell,  changes in tax rules and  regulations
     applicable to us or our  competitors,  the imposition of new  environmental
     restrictions,  regulations  or  laws  or  the  discovery  of  environmental
     conditions  at current or future  locations,  or any failure to comply with
     such laws or any adverse  change in such laws;  and
o    Significant adverse results in litigation matters.

We  believe  our  forward-looking  statements  are  reasonable;  however,  undue
reliance should not be placed on any forward-looking statements, which are based
on current expectations.

                                 Page 27 of 34

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Receivables Risk. We manage the market risk associated with the revolving credit
card  portfolios of our finance  operations.  Portions of these  portfolios have
been securitized in transactions  accounted for as sales in accordance with SFAS
No. 140 and, therefore, are not presented on the consolidated balance sheets.

The majority of accounts in the credit card  portfolios are charged  interest at
rates  indexed  to the prime  rate,  adjustable  on a monthly  basis  subject to
certain limitations. The remaining accounts are charged interest at fixed annual
percentage  rates.  The following  table presents the breakdown by interest rate
structure of the gross principal receivables outstanding prior to discounting at
August 31, 2003, and February 28, 2003.



(A) Private-Label

(Amounts in millions)                             August 31                  February 28
-----------------------------------------        -----------                 -----------
Indexed to prime rate.....................          $1,455                      $1,460
Fixed APR.................................             140                         176
                                                    ------                      ------
Total.....................................          $1,595                      $1,636
                                                    ======                      ======

(B) Bankcard
(Amounts in millions)                             August 31                  February 28
-----------------------------------------        -----------                 -----------
Indexed to prime rate.....................          $1,421                      $1,538
Fixed APR.................................               -                           -
                                                    ------                      ------
Total.....................................          $1,421                      $1,538
                                                    ======                      ======


Financing   for  the  credit  card   receivables   is  achieved   through  asset
securitization  programs  that,  in turn,  issue both private and public  market
debt,  principally at floating rates based on LIBOR and commercial  paper rates.
Receivables held for sale are financed with working capital. At August 31, 2003,
and February 28, 2003, the total principal amount of receivables  securitized or
held for sale prior to discounting was as follows:



(A) Private-Label

(Amounts in millions)                             August 31                  February 28
-----------------------------------------        -----------                 -----------
Floating-rate securitizations.............          $1,569                      $1,592
Held for sale.............................              26                          44
                                                    ------                      ------
Total.....................................          $1,595                      $1,636
                                                    ======                      ======

(B) Bankcard

(Amounts in millions)                             August 31                  February 28
-----------------------------------------        -----------                 -----------
Floating-rate securitizations.............          $1,381                      $1,527
Held for sale.............................              40                          11
                                                    ------                      ------
Total.....................................          $1,421                      $1,538
                                                    ======                      ======


Interest  Rate  Exposure.  Interest  rate  exposure  relating to the credit card
receivable  securitizations  represents  a market risk  exposure  that we manage
primarily  with matched  funding.  We also have the ability to adjust  fixed-APR
revolving credit cards and the index on floating-rate  credit cards,  subject to
cardholder  ratification,  but we do not currently anticipate the need to do so.
Our ability to effect these changes may be limited by competitive conditions.

The majority of our  cardholder  accounts have interest  rates indexed to prime,
but the rates we charge our  cardholders  may not change as frequently or to the
same extent as our funding costs. This is the result of a combination of factors
such as interest  rate floors on the accounts  which are above the current level
of prime rate,  interest-free  promotional financing, and by differences between
changes  in  prime  and  LIBOR  or  commercial  paper  rates.  Accordingly,  our
securitization income and the value of our retained interests in the securitized
receivables could be adversely impacted by increases in interest rates.

                                 Page 28 of 34

We use a  sensitivity  analysis to quantify  interest  rate risk relating to our
retained  interests in  securitized  private-label  receivables.  This  analysis
calculates  the impact on net  earnings  from a 200 basis point  increase in the
yield curve applied equally over the next four quarters.  Assuming that no other
assumptions  change,  this increase in interest rates would result in a decrease
in our private-label securitization income of approximately $8.6 million for the
quarter ended August 31, 2003,  compared with a decrease of  approximately  $8.5
million for the quarter  ended August 31, 2002.  Due to our decision to sell the
bankcard operation,  we did not use a sensitivity  analysis to quantify interest
rate risk  because the fair value of the retained  interests in the  securitized
bankcard receivables is now based on the estimated net proceeds as determined by
bids received.

The market and credit risks  associated  with  interest rate caps are similar to
those  relating  to other  types of  financial  instruments.  Market risk is the
exposure  created by potential  fluctuations  in interest  rates and is directly
related to the product type,  agreement  terms and transaction  volume.  We have
entered into  offsetting  interest rate cap  positions  and,  therefore,  do not
anticipate  significant market risk arising from interest rate caps. Credit risk
is the exposure to nonperformance of another party to an agreement.  We mitigate
credit risk by dealing with highly rated bank counterparties.

ITEM 4.  CONTROLS AND PROCEDURES

The company's  principal  executive officer and principal financial officer have
evaluated the effectiveness of the company's  disclosure controls and procedures
as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended,
as of the end of the period covered by this Quarterly Report on Form 10-Q. Based
upon their evaluation,  the principal  executive officer and principal financial
officer  concluded  that the company's  disclosure  controls and  procedures are
effective.  There  have been no  changes  in  internal  control  over  financial
reporting for the period covered by this report that have  materially  affected,
or are reasonably likely to materially  affect,  the company's  internal control
over financial reporting.

                                 Page 29 of 34

                           PART II. OTHER INFORMATION

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

              (a)          The annual meeting of the company's  shareholders was
                           held June 17, 2003.

              (b)(i)       At  the  annual  meeting,  the  shareholders  of  the
                           company  elected Ronald M. Brill,  Barbara S. Feigin,
                           W. Alan McCollough and Mikael  Salovaara as directors
                           for three-year  terms and Alan Kane as a director for
                           a two-year  term.  The elections were approved by the
                           following votes:



                                   Directors                 For                 Withheld
                           -------------------------     -----------           ------------
                           Ronald M. Brill               177,255,056             9,830,160
                           Barbara S. Feigin             177,117,325             9,967,891
                           Alan Kane                     178,128,440             8,956,776
                           W. Alan McCollough            176,203,440            10,881,776
                           Mikael Salovaara              177,228,525             9,858,691


                 (ii)      At  the  annual  meeting,  the  shareholders  of  the
                           company  voted in favor of a proposal  to approve the
                           company's 2003 Stock  Incentive  Plan.  This proposal
                           was approved by the following votes:



                                                           2003 Stock Incentive Plan

                                                                                              Broker
                                  For                Against                Abstain          Non-Votes
                             -----------           ------------           ----------         ---------
                             161,478,309            19,242,079             6,364,828             0


                 (iii)     At  the  annual  meeting,  the  shareholders  of  the
                           company  voted in favor of a proposal  to approve the
                           company's 2003 Annual  Performance-Based  Bonus Plan.
                           This proposal was approved by the following votes:



                                                  2003 Annual Performance-Based Bonus Plan

                                                                                              Broker
                                  For                 Against               Abstain          Non-Votes
                              -----------           -----------          -----------         ---------
                              173,649,847            10,237,701           3,197,668              0


                 (iv)      At  the  annual  meeting,  the  shareholders  of  the
                           company  voted  in favor  of a  shareholder  proposal
                           regarding the company's shareholder rights plan. This
                           proposal was approved by the following votes:



                                                             Shareholder Proposal

                                                                                          Broker
                                For                   Against           Abstain          Non-Votes
                             ----------             ----------        ----------        ----------
                             88,040,248             22,923,227         8,759,077        67,362,664


ITEM 5.       OTHER INFORMATION

              Effective  September 30, 2003,  Paula G. Rosput  resigned from the
              company's Board of Directors,  citing the need to focus additional
              time on her primary responsibilities.

                                 Page 30 of 34


ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

              (a)    Exhibits

                     3.1   Amended and Restated Articles of Incorporation of the
                           company,   effective   February  3,1997,  as  amended
                           through October 1, 2002, filed as Exhibit 3(i) to the
                           company's  Quarterly  Report  on  Form  10-Q  for the
                           quarter  ended  November 30, 2002 (File No.  1-5767),
                           expressly incorporated herein by this reference

                     3.2   Bylaws of the company,  as amended and restated  June
                           17, 2003,  filed as Exhibit (3)(iii) to the company's
                           Quarterly  Report on Form 10-Q for the quarter  ended
                           May   31,   2003   (File   No.   1-5767),   expressly
                           incorporated herein by this reference

                     4.1   Third Amended and Restated Rights  Agreement dated as
                           of  October 1,  2002,  between  he company  and Wells
                           Fargo Bank Minnesota, N.A., as Rights Agent, filed as
                           Exhibit  1 to  the  company's  Form  8-A/A  filed  on
                           October   1,  2002  (File  No.   1-5767),   expressly
                           incorporated herein by this reference

                    10.1   Credit  Agreement dated as of June 27, 2003 among the
                           company,  the Lenders party  thereto,  Fleet National
                           Bank,  Fleet Retail  Finance  Inc.,  Bank of America,
                           N.A. Congress Financial Corporation, General Electric
                           Capital  Corporation,  Bank One, NA,  JPMorgan  Chase
                           Bank, National City Commercial Finance, Inc., The CIT
                           Group/Business Credit, Inc. and Wells Fargo Foothill,
                           LLC, filed herewith*

                    10.2   Form of Employment  Agreement between the company and
                           certain executive officers, filed herewith**

                    10.3   The company's  2003 Stock  Incentive  Plan,  filed as
                           Appendix  B  to  the   company's   Definitive   Proxy
                           Statement  dated May 9, 2003,  for the Annual Meeting
                           of  Shareholders  held on June  17,  2003  (File  No.
                           1-5767),   expressly   incorporated  herein  by  this
                           reference**

                    10.4   The  company's  2003 Annual  Performance-Based  Bonus
                           Plan, filed as Appendix C to the company's Definitive
                           Proxy  Statement  dated May 9,  2003,  for the Annual
                           Meeting of  Shareholders  held on June 17, 2003 (File
                           No. 1-5767),  expressly  incorporated  herein by this
                           reference**

                    31.1   Certification by Registrant's Chief Executive Officer
                           pursuant to Section 302 of the  Sarbanes-Oxley Act of
                           2002, filed herewith

                    31.2   Certification by Registrant's Chief Financial Officer
                           pursuant to Section 302 of the  Sarbanes-Oxley Act of
                           2002, filed herewith

                    32.1   Certification   of  CEO  under  Section  906  of  the
                           Sarbanes-Oxley Act of 2002, filed herewith

                    32.2   Certification   of  CFO  under  Section  906  of  the
                           Sarbanes-Oxley Act of 2002, filed herewith

                       *   Portions of this  exhibit have been omitted and filed
                           separately  with the SEC  pursuant  to the  company's
                           application for confidential treatment of the omitted
                           information  pursuant  to Rule 24b-A of the  Exchange
                           Act.

                      **   Indicates management contracts, compensatory plans or
                           arrangements  of the company  required to be filed as
                           an exhibit.

                                 Page 31 of 34

              (b)    Reports on Form 8-K

                     The exhibits  listed below were furnished to the SEC during
                     the period  covered by this  report  pursuant to Item 12 of
                     Form 8-K and shall not be deemed  "filed"  for  purposes of
                     the  Securities  Exchange  Act  of  1934,  as  amended,  or
                     incorporated by reference into any document filed under the
                     Securities  Act of 1933,  as  amended,  except  as shall be
                     expressly set forth by specific reference in such filing.

                     The  company  furnished  a Form  8-K to the  SEC on June 5,
                     2003,  announcing  the company's  first quarter fiscal year
                     2004 sales and earnings expectations.

                     The  company  furnished  a Form  8-K to the SEC on June 17,
                     2003,  announcing  the company's  first quarter fiscal year
                     2004 results.

                                 Page 32 of 34



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the company
has duly  caused  this  report  to be signed  on its  behalf by the  undersigned
thereunto duly authorized.


                                       CIRCUIT CITY STORES, INC.
                                       (Registrant)



                                       By: /s/ W. Alan McCollough
                                           -------------------------------------
                                           W. Alan McCollough
                                           Chairman, President and
                                           Chief Executive Officer



                                       By: /s/ Michael E. Foss
                                           -------------------------------------
                                           Michael E. Foss
                                           Senior Vice President and
                                           Chief Financial Officer



                                       By: /s/ Philip J. Dunn
                                           -------------------------------------
                                           Philip J. Dunn
                                           Senior Vice President, Treasurer,
                                           Corporate Controller and
                                           Chief Accounting Officer




October 14, 2003


                                 Page 33 of 34

                                  EXHIBIT INDEX


                     3.1   Amended and Restated Articles of Incorporation of the
                           company,   effective   February  3,1997,  as  amended
                           through October 1, 2002, filed as Exhibit 3(i) to the
                           company's  Quarterly  Report  on  Form  10-Q  for the
                           quarter  ended  November 30, 2002 (File No.  1-5767),
                           expressly incorporated herein by this reference

                     3.2   Bylaws of the company,  as amended and restated  June
                           17, 2003,  filed as Exhibit (3)(iii) to the company's
                           Quarterly  Report on Form 10-Q for the quarter  ended
                           May   31,   2003   (File   No.   1-5767),   expressly
                           incorporated herein by this reference

                     4.1   Third Amended and Restated Rights  Agreement dated as
                           of  October 1,  2002,  between  he company  and Wells
                           Fargo Bank Minnesota, N.A., as Rights Agent, filed as
                           Exhibit  1 to  the  company's  Form  8-A/A  filed  on
                           October   1,  2002  (File  No.   1-5767),   expressly
                           incorporated herein by this reference

                    10.1   Credit  Agreement dated as of June 27, 2003 among the
                           company,  the Lenders party  thereto,  Fleet National
                           Bank,  Fleet Retail  Finance  Inc.,  Bank of America,
                           N.A. Congress Financial Corporation, General Electric
                           Capital  Corporation,  Bank One, NA,  JPMorgan  Chase
                           Bank, National City Commercial Finance, Inc., The CIT
                           Group/Business Credit, Inc. and Wells Fargo Foothill,
                           LLC, filed herewith*

                    10.2   Form of Employment  Agreement between the company and
                           certain executive officers, filed herewith**

                    10.3   The company's  2003 Stock  Incentive  Plan,  filed as
                           Appendix  B  to  the   company's   Definitive   Proxy
                           Statement  dated May 9, 2003,  for the Annual Meeting
                           of  Shareholders  held on June  17,  2003  (File  No.
                           1-5767),   expressly   incorporated  herein  by  this
                           reference**

                    10.4   The  company's  2003 Annual  Performance-Based  Bonus
                           Plan, filed as Appendix C to the company's Definitive
                           Proxy  Statement  dated May 9,  2003,  for the Annual
                           Meeting of  Shareholders  held on June 17, 2003 (File
                           No. 1-5767),  expressly  incorporated  herein by this
                           reference**

                    31.1   Certification by Registrant's Chief Executive Officer
                           pursuant to Section 302 of the  Sarbanes-Oxley Act of
                           2002, filed herewith

                    31.2   Certification by Registrant's Chief Financial Officer
                           pursuant to Section 302 of the  Sarbanes-Oxley Act of
                           2002, filed herewith

                    32.1   Certification   of  CEO  under  Section  906  of  the
                           Sarbanes-Oxley Act of 2002, filed herewith

                    32.2   Certification   of  CFO  under  Section  906  of  the
                           Sarbanes-Oxley Act of 2002, filed herewith

                       *   Portions of this  exhibit have been omitted and filed
                           separately  with the SEC  pursuant  to the  company's
                           application for confidential treatment of the omitted
                           information  pursuant  to Rule 24b-A of the  Exchange
                           Act.

                      **   Indicates management contracts, compensatory plans or
                           arrangements  of the company  required to be filed as
                           an exhibit.

                                 Page 34 of 34