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 May 31, 2004

                                       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 June 30, 2004
Common Stock, par value $0.50                               199,233,224

A Table of Contents  is  included on Page 2 and an Exhibit  Index is included on
Page 26.



                   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 Ended May 31, 2004 and 2003                                    3

                     Consolidated Balance Sheets -
                     May 31, 2004 and February 29, 2004                                          4

                     Consolidated Statements of Cash Flows -
                     Three Months Ended May 31, 2004 and 2003                                    5

                     Notes to Consolidated Financial Statements                                  6

      Item 2.     Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                                     13

      Item 3.     Quantitative and Qualitative Disclosures about Market Risk                    22

      Item 4.     Controls and Procedures                                                       22

PART II.          OTHER INFORMATION

      Item 1.     Legal Proceedings                                                             22

      Item 2.     Changes in Securities, Use of Proceeds and Issuer Purchases
                  of Equity Securities                                                          23

      Item 6.     Exhibits and Reports on Form 8-K                                              24

SIGNATURES                                                                                      25

EXHIBIT INDEX                                                                                   26



                                  Page 2 of 26




                          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
                                                                                                          May 31
                                                                                              2004                    2003
                                                                                          --------------         -------------
Net sales and operating revenues                                                          $    2,066,588            $1,933,320
Cost of sales, buying and warehousing                                                          1,586,153             1,485,010
                                                                                          --------------           -----------
Gross profit                                                                                     480,435               448,310
Finance income                                                                                     5,564                 8,018
Selling, general and administrative expenses                                                     487,945               494,542
Stock-based compensation expense                                                                   5,954                 7,515
Interest expense                                                                                     350                 1,007
                                                                                          --------------          ------------
Loss from continuing operations before income taxes                                               (8,250)              (46,736)
Income tax benefit                                                                                (3,016)              (18,647)
                                                                                          --------------          ------------
Net loss from continuing operations                                                               (5,234)              (28,089)
Net loss from discontinued operation                                                                (707)              (18,607)
                                                                                          --------------          ------------
Net loss                                                                                  $       (5,941)           $  (46,696)
                                                                                          ==============          ============

Weighted average common shares:
    Basic                                                                                        199,429               205,828
                                                                                          ==============         =============
    Diluted                                                                                      199,429               205,828
                                                                                          ==============         =============
Net loss per share:
                   =
    Basic:
       Continuing operations                                                              $        (0.03)           $    (0.14)
       Discontinued operation                                                                          -                 (0.09)
                                                                                          --------------          ------------
                                                                                          $        (0.03)           $    (0.23)
                                                                                          ==============          ============
    Diluted:
       Continuing operations                                                              $        (0.03)           $    (0.14)
       Discontinued operation                                                                          -                 (0.09)
                                                                                          --------------          ------------
                                                                                          $        (0.03)           $    (0.23)
                                                                                          ==============          ============


Cash dividends paid per share                                                             $       0.0175            $   0.0175
                                                                                          ==============         =============

See accompanying notes to consolidated financial statements.


                                  Page 3 of 26



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

                                                                                         May 31, 2004          Feb. 29, 2004
                                                                                         ------------          -------------
                                                                                          (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                                                               $      990,571        $     783,471
Accounts receivable, net of allowance for doubtful accounts
     of $416 and $547                                                                          115,272              154,039
Retained interests in securitized receivables                                                        -              425,678
Merchandise inventory                                                                        1,537,752            1,517,256
Prepaid expenses and other current assets                                                       48,956               38,617
Assets of discontinued operation                                                                 5,085                    -
                                                                                        --------------        -------------

Total current assets                                                                         2,697,636            2,919,061

Property and equipment, net                                                                    620,159              585,903
Deferred income taxes                                                                           91,715               98,934
Goodwill and other intangible assets                                                           218,827                    -
Other assets                                                                                    25,776               29,102
                                                                                        --------------        -------------

TOTAL ASSETS                                                                              $  3,654,113           $3,633,000
                                                                                          ============           ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                                        $      974,037        $     879,635
Accrued expenses and other current liabilities                                                 168,715              131,512
Accrued income taxes                                                                            67,434               71,163
Deferred income taxes                                                                           25,952               90,210
Current installments of long-term debt                                                          12,416                1,115
Liabilities of discontinued operation                                                            2,691                3,068
                                                                                         -------------        -------------

Total current liabilities                                                                    1,251,245            1,176,703

Long-term debt, excluding current installments                                                  25,088               22,691
Accrued straight-line rent                                                                     100,520               98,470
Other liabilities                                                                              117,120              111,175
                                                                                        --------------        -------------

TOTAL LIABILITIES                                                                            1,493,973            1,409,039
                                                                                         -------------        -------------

Stockholders' equity:
Common stock, $0.50 par value;
     525,000,000 shares authorized; 199,300,619 shares
     issued and outstanding at May 31, 2004
     (203,899,395 at February 29, 2004)                                                         99,650              101,950
Capital in excess of par value                                                                 867,300              922,600
Retained earnings                                                                            1,189,895            1,199,411
Accumulated other comprehensive income                                                           3,295                    -
                                                                                        --------------        -------------

TOTAL STOCKHOLDERS' EQUITY                                                                   2,160,140            2,223,961
                                                                                        --------------        -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                               $   3,654,113           $3,633,000
                                                                                         =============           ==========

See accompanying notes to consolidated financial statements.


                                  Page 4 of 26


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

                                                                                                 Three Months Ended
                                                                                                       May 31
                                                                                             2004                   2003
                                                                                        --------------         ------------
Operating Activities:
Net loss                                                                                  $     (5,941)         $    (46,696)
Adjustments to reconcile net loss to net cash used in
    operating activities of continuing operations:
    Loss from discontinued operation                                                               707                18,607
    Depreciation and amortization                                                               34,843                49,485
    Stock option expense                                                                         4,011                 4,077
    Amortization of restricted stock awards                                                      1,722                 2,212
    Loss (gain) on dispositions of property and equipment                                          660                  (380)
    Provision for deferred income taxes                                                        (71,444)               (6,663)
    Changes in operating assets and liabilities:
       Increase in accounts receivable, net                                                    (23,046)               (4,207)
       Decrease (increase) in retained interests in securitized receivables                     32,867              (115,614)
       Decrease in merchandise inventory                                                        74,072                81,077
       Increase in prepaid expenses and other current assets                                    (6,023)              (32,951)
       Decrease in other assets                                                                  4,736                 2,647
       Increase (decrease) in accounts payable                                                  70,498               (63,277)
       Decrease in accrued expenses and other current liabilities,
           and accrued income taxes                                                             (4,686)              (43,611)
       (Decrease) increase in accrued straight-line rent and
           other liabilities                                                                    (7,460)                1,340
                                                                                         -------------          ------------
Net cash provided by (used in) operating activities of continuing
       operations                                                                              105,516              (153,954)
                                                                                         -------------          ------------

Investing Activities:
Proceeds from the sale of the private-label finance operation                                  472,710                     -
Acquisitions, net of cash acquired of $30,615                                                 (271,954)                    -
Purchases of property and equipment                                                            (42,694)              (27,370)
Proceeds from sales of property and equipment                                                   18,599                 6,791
                                                                                         -------------          ------------
Net cash provided by (used in) investing activities of continuing
       operations                                                                              176,661               (20,579)
                                                                                          ------------          ------------

Financing Activities:
Principal payments on long-term debt                                                            (2,412)                 (330)
Repurchase and retirement of common stock                                                      (71,054)              (13,941)
Issuances of common stock, net                                                                   7,721                   717
Dividends paid                                                                                  (3,575)               (3,648)
                                                                                         -------------             ---------
Net cash used in financing activities of continuing operations                                 (69,320)              (17,202)
                                                                                        --------------         -------------
Net cash used in discontinued bankcard finance operation                                        (6,169)              (77,291)
Effect of exchange rate changes on cash                                                            412                    -
                                                                                         -------------          ------------

Increase (decrease) in cash and cash equivalents                                               207,100              (269,026)
Cash and cash equivalents at beginning of year                                                 783,471               884,670
                                                                                          ------------           -----------
Cash and cash equivalents at end of period                                                $    990,571          $    615,644
                                                                                          ============          ============

See accompanying notes to consolidated  financial statements.  See Note 13 for a
supplemental schedule of non-cash investing and financing activities.



                                  Page 5 of 26


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

1.   Basis of Presentation

     The consolidated  financial statements of the company conform to accounting
     principles  generally  accepted  in the United  States of  America.  In the
     opinion of management,  the  accompanying  unaudited  financial  statements
     contain  all   adjustments,   which  consist  only  of  normal,   recurring
     adjustments,  necessary for a fair presentation. 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 in this report should be read in conjunction  with the
     notes to the audited financial statements  incorporated by reference in the
     company's fiscal 2004 Annual Report on Form 10-K.

     On May 12, 2004, the company  acquired a controlling  interest in InterTAN,
     Inc. for cash consideration of $265.6 million,  which includes  transaction
     costs and is net of cash acquired of $30.6  million.  InterTAN is a leading
     consumer  electronics  retailer of both  private-label and  internationally
     branded products with  headquarters in Barrie,  Ontario,  Canada.  InterTAN
     operates retail consumer  electronics  outlets under the RadioShack(R) name
     in Canada  under a licensing  agreement  with a  subsidiary  of  RadioShack
     Corporation.  In  addition  to  enabling  Circuit  City to  accelerate  the
     offering of private-label  merchandise to its customers, the acquisition of
     InterTAN  gives  Circuit City its first  presence in the  Canadian  market.
     Total sales for the first quarter include sales of $21.7 million  generated
     by  InterTAN  from  the date of the  acquisition  on May 12,  2004,  to the
     quarter end on May 31, 2004. InterTAN did not have a material impact on the
     net loss from  continuing  operations  for the first quarter of the current
     fiscal year. See Note 3 for additional discussion of the acquisition.

     On May 25,  2004,  the  company  completed  the  sale of its  private-label
     finance  operation,  comprised of its  private-label  and  co-branded  Visa
     credit  card  programs,   to  Bank  One   Corporation.   Results  from  the
     private-label finance operation, including transition and transaction costs
     of  approximately  $6 million  related to the sale of the operation to Bank
     One,  are  included in finance  income.  The company  also  entered  into a
     Consumer  Credit Card Program  Agreement with Bank One under which Bank One
     is offering  private-label  and co-branded credit cards to new and existing
     customers  of the  company.  The company is  compensated  under the program
     agreement  primarily based on the number of new accounts opened.  After the
     sale date, the earnings  contribution  from the program  agreement has been
     included in net sales and operating revenues on the consolidated statements
     of operations,  but was immaterial in this fiscal year's first quarter. See
     Note 4 and Note 12 for  additional  discussion  concerning  the sale of the
     private-label finance operation.

     On November  18,  2003,  the  company  completed  the sale of its  bankcard
     finance   operation,   which  included  Visa  and  MasterCard  credit  card
     receivables  and related cash reserves.  Results from the bankcard  finance
     operation are presented as results from discontinued operation.  See Note 2
     for  additional  discussion  concerning  the sale of the  bankcard  finance
     operation.

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

2.   Discontinued Operation

     On November  18,  2003,  the  company  completed  the sale of its  bankcard
     finance  operation  to  FleetBoston  Financial.  Results  from the bankcard
     finance operation are presented as results from discontinued operation. The
     sale  agreement  included  a  transition  services  agreement  under  which
     employees  of the  company's  finance  operation  continued  to service the
     bankcard  accounts  until final  conversion  of the  bankcard  portfolio to
     FleetBoston,   which  occurred  on  April  2,  2004.   Through  that  date,
     FleetBoston  was  obligated to reimburse  the company for  operating  costs
     incurred during the transition period. The company incurred severance costs
     ratably through the final conversion date.


                                  Page 6 of 26


     The after-tax loss from the discontinued bankcard finance operation totaled
     $0.7 million for the quarter ended May 31, 2004,  and $18.6 million for the
     same  period  last  fiscal  year.  Cash flows  related to the  discontinued
     operation  have been  segregated  on the  consolidated  statements  of cash
     flows.

     The assets and liabilities of the discontinued  bankcard finance  operation
     reflected on the consolidated  balance sheets at May 31, 2004, and February
     29, 2004, were comprised of the following:



                                                                                                At               At
     (Amounts in millions)                                                                    May 31         February 29
     -------------------------------------------------------------------------------------------------------------------
     Accounts receivable.............................................................          $4.2           $    -
     Deferred income taxes...........................................................           0.9                -
                                                                                              ---------------------------
     Total assets of discontinued bankcard finance operation.........................          $5.1           $    -
                                                                                               ==========================


     Accrued expenses and other current liabilities..................................          $2.7             $3.1
                                                                                               --------------------------
     Total liabilities of discontinued bankcard finance operation....................          $2.7             $3.1
                                                                                               ==========================


3.   Acquisitions

     On May 12, 2004, the company  acquired a controlling  interest in InterTAN,
     Inc.  This  acquisition  was  accounted  for using the  purchase  method in
     accordance  with  Statement  of  Financial  Accounting  Standards  No. 141,
     "Business Combinations."  Accordingly,  we recorded the net assets at their
     estimated fair values,  and included  operating results in our consolidated
     financial statements from the date of acquisition. Due to the timing of the
     acquisition relative to our quarter end, the company allocated the purchase
     price to the assets and liabilities on a preliminary  basis using available
     information. The preliminary purchase price allocation includes goodwill of
     $176.0  million  and  identifiable  intangible  assets  of  $37.5  million.
     Goodwill is not deductible for tax purposes.  Under SFAS No. 142, "Goodwill
     and  Intangible  Assets,"  goodwill is not  amortized,  but is reviewed for
     impairment at least annually.  The identifiable  intangible  assets include
     contract-based intangibles. Preliminarily,the identifiable intangibles have
     been assigned  indefinite lives as there are no current outstanding reasons
     to believe the contracts will not continue to be renewed.  The identifiable
     intangible assets will be reviewed for impairment at least annually.

     Selected pro forma financial  information assuming the acquisition had been
     consummated at the beginning of fiscal 2003 were as follows:



                                                                             Three Months Ended May 31
                                                                          2004                    2003
     (Amounts in millions except per share data)                         Pro Forma               Pro Forma
     ---------------------------------------------------------------------------------------------------------------
     Net sales and operating revenues...........................          $2,145.9                 $2,021.8
     Net loss from continuing operations........................       $       6.6               $     28.9
     Net loss per share from continuing
       operations...............................................       $      0.03               $     0.14
     Net loss...................................................       $       7.4               $     47.5
     Net loss per share.........................................       $       0.4               $     0.23


     On April 5, 2004, RadioShack filed suit against InterTAN in Tarrant County,
     Texas,  and amended  that suit on April 27,  2004.  InterTAN  disputes  the
     various  termination  scenarios  alleged by  RadioShack  and is  vigorously
     defending  against  those  claims.  On May 11,  2004,  InterTAN  asserted a
     counterclaim  seeking a declaration  under U.S. federal  trademark law that
     the use of the  RadioShack  marks is  proper.  Circuit  City was added as a
     necessary  party to that litigation and removed the matter to Federal Court
     in the Northern District of Texas. On May 12, 2004,  Circuit City filed its
     own suit in  Federal  Court in the  Northern  District  of Texas  seeking a
     declaration  under U.S. federal  trademark law that the use of the marks in
     Canada is proper.  InterTAN has cross-claimed  against  RadioShack based on
     federal trademark law and remedies for business disparagement.


                                  Page 7 of 26


     Circuit City believes that RadioShack is not entitled to early  termination
     of the  agreements  and  that  InterTAN  has  substantial  defenses  to the
     RadioShack claims. Circuit City intends to vigorously pursue its claims and
     defend the claims in the RadioShack litigation.  Circuit City believes that
     this  litigation  will not have a material  adverse effect on the company's
     financial condition or results of operations.

4.   Finance Income

     Finance  income  includes  the  results  from the  company's  private-label
     finance   operation,   including   transition  and  transaction   costs  of
     approximately  $6 million related to the sale of the operation to Bank One,
     through  May 25,  2004,  the date  the  company  completed  the sale of its
     private-label finance operation.

     For the three-months  ended May 31, 2004 and 2003, the components of pretax
     finance income were as follows:



                                                                       Three Months Ended
                                                                             May 31
     (Amounts in millions)                                            2004            2003
     -----------------------------------------------------------------------------------------
     Securitization income......................................      $28.1          $ 28.4
     Less: Payroll and fringe benefit expenses..................        7.6             8.0
             Other direct expenses..............................       14.9            12.4
                                                                  ----------------------------
     Finance income.............................................     $  5.6          $  8.0
                                                                  ============================


     Securitization  income  primarily  is  comprised of the gain on the sale of
     receivables  generated by the company's  private-label  finance  operation,
     income from retained  interests in the credit card  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 income does
     not  include  any  allocation  of  indirect  costs or income.  The  company
     presents  information  on the  performance  of its finance  operation  on a
     direct basis to avoid making  arbitrary  decisions  regarding  the periodic
     indirect  benefits  or costs that could be  attributed  to this  operation.
     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.


                                  Page 8 of 26


5.   Stock-Based Compensation

     Effective December 1, 2003, the company adopted the fair value based method
     of accounting for stock-based compensation in accordance with SFAS No. 123,
     "Accounting  for Stock-Based  Compensation."  The adoption of this standard
     was applied using the retroactive restatement method as defined in SFAS No.
     148, "Accounting for Stock-Based Compensation - Transition and Disclosure."
     The table below sets forth the effect of the  retroactive  restatement  for
     adoption of SFAS No. 123 and the  presentation of results from the bankcard
     finance operation as results from discontinued operation.


<
                                                                                     Three Months Ended
     (Amounts in thousands except per share data)                                       May 31, 2003
     Net loss fromcontinuing operations:
       Previously reported.......................................................           $43,924
       Restated for bankcard operation sale......................................           $25,317
       Restated for bankcard operation sale and adoption of
           SFAS No. 123..........................................................           $28,089

     Net loss per share from continuing operations:
       Basic:
           Previously reported...................................................           $  0.21
           Restated for bankcard operation sale..................................           $  0.12
           Restated for bankdcard operation sale and adoption of
               SFAS No. 123......................................................           $  0.14

       Diluted:
           Previously reported...................................................           $  0.21
           Restated for bankcard operation sale..................................           $  0.12
           Restated for bankcard operation sale and adoption of
               SFAS No. 123......................................................           $  0.14


     The fair value of each option  granted is estimated on the grant date using
     the Black-Scholes  option-pricing model with the following weighted average
     assumptions.



                                                                Three Months Ended
                                                                     May 31
                                                            2004              2003
-------------------------------------------------------------------------------------
     Expected dividend yield...........................      0.6%            1.2%
     Expected stock volatility.........................       65%              76%
     Risk-free interest rates..........................        4%               3%
     Expected lives (in years).........................        5                5



     Using these  assumptions in the  Black-Scholes  model, the weighted average
     fair value of options granted was $6 per share during the quarter ended May
     31, 2004, and $3 per share during the quarter ended May 31, 2003.

6.   Comprehensive Loss

     The components of the company's  comprehensive loss consist of the net loss
     and other comprehensive income. Other comprehensive income includes foreign
     currency  translation  adjustments  and is recorded net of deferred  income
     taxes directly to stockholders' equity.


                                  Page 9 of 26


     The components of comprehensive loss, net of taxes, were as follows:



                                                                 Three Months Ended
                                                                       May 31
     (Amounts in millions)                                      2004            2003
     -----------------------------------------------------------------------------------
     Net loss.............................................      $(5.9)         $(46.7)
     Foreign currency translation.........................        3.3                 -
                                                            ---------------------------
     Comprehensive loss...................................     $ (2.6)         $(46.7)
                                                             =========================


7.   Income Taxes

     The  effective  income  tax rate  applicable  to  results  from  continuing
     operations  was 36.6  percent  for the three  months  ended  May 31,  2004,
     compared  with 39.9 percent for the three  months  ended May 31, 2003.  The
     decrease reflects lower estimated state and local income taxes.

8.   Net Loss Per Share

     For the three months ended May 31, 2004 and 2003,  no options or restricted
     stock  were  included  in the  calculation  of  diluted  net loss per share
     because the company reported a loss from continuing operations.  Options to
     purchase 17.3 million  shares of common stock with exercise  prices ranging
     from $3.10 to $27.21 and restricted  stock  amounting to 2.5 million shares
     were  outstanding at May 31, 2004.  Options to purchase 19.1 million shares
     of common stock with exercise prices ranging from $5.61 to $27.21 per share
     and restricted  stock  amounting to 2.6 million shares were  outstanding at
     May 31, 2003.

9.   Restricted Cash

     Cash and cash equivalents held by the company's regulated  subsidiaries and
     not available for general corporate  purposes were $26.1 million at May 31,
     2004, and $61.6 million at February 29, 2004. The sale of the private-label
     finance operation  eliminated the company's obligation to restrict cash for
     settlement  obligations.  The  company is in the  process of  settling  the
     remaining  liquidity  restrictions  on cash as part of the  liquidation  of
     First North American  National  Bank,  the company's  wholly owned national
     bank subsidiary.

10.  Common Stock Repurchased

     In January 2003, the company's board of directors authorized the repurchase
     of up to $200  million of common  stock.  During the three months ended May
     31, 2004, the company  repurchased  and retired  approximately  5.8 million
     shares at a cost of $71.1  million.  As of May 31,  2004,  the  company had
     repurchased and retired  approximately  15.0 million shares of common stock
     at a cost of $155.4 million.  Based on the market value of the common stock
     at May 31, 2004, the remaining  $44.6 million then  authorized  would allow
     the  company  to  repurchase  up to  approximately  2 percent  of the 199.3
     million shares then outstanding.  In June 2004, the board authorized a $200
     million increase in the company's stock repurchase authorization.  Based on
     the market value of the common stock at May 31,  2004,  the $244.6  million
     that  remains  authorized  would  allow the  company  to  repurchase  up to
     approximately 10 percent of the 199.3 million shares outstanding on May 31,
     2004.

11.  Pension Plans

     The company  provides a  noncontributory  defined  benefit  pension plan to
     eligible  employees.  Plan benefits generally are based on years of service
     and average  compensation.  The company  also has an unfunded  nonqualified
     benefit restoration plan.


                                 Page 10 of 26


     The components of the net pension expense for the plans were as follows:



                                                                               Three Months Ended
                                                                                     May 31
     (Amounts in thousands)                                                2004                    2003
     ----------------------------------------------------------------------------------------------------
     Service cost...............................................         $   3,817              $   3,968
     Interest cost..............................................             3,906                  3,316
     Expected return on plan assets.............................            (4,101)                (3,630)
     Amortization of prior service cost.........................               119                    119
     Amortization of recognized actuarial loss..................             1,255                    818
                                                                   --------------------------------------
     Net pension expense........................................         $   4,996              $   4,591
                                                                   ======================================


     Circuit City made no pension plan contributions during the first quarter of
     fiscal 2005. The company expects to make any necessary contributions to the
     defined benefit  pension plan to meet ERISA minimum  funding  standards and
     any  additional  contributions  as needed to ensure  that the fair value of
     plan  assets  at  February  28,  2005,  exceeds  the  accumulated   benefit
     obligation. The company does not currently expect to make a contribution in
     fiscal 2005.  In addition,  the  company's  expected  contribution  for the
     restoration  plan is equal to the expected  benefit  payments for the plan,
     which was $463,000 as of February 29, 2004.

12.  Segment Information

     The company has identified three reportable  segments:  its domestic retail
     operation,  international  retail  operation  and  finance  operation.  The
     company  identified  these  segments  based  on  its  management  reporting
     structure  and the  nature of the  products  and  services  offered by each
     segment.  The domestic retail operation segment is primarily engaged in the
     business of selling brand-name consumer electronics, personal computers and
     entertainment  software  in the United  States.  The  international  retail
     operation   segment  is  primarily  engaged  in  the  business  of  selling
     private-label and internationally  branded consumer electronics products in
     Canada.  Total  sales for the  international  retail  segment for the first
     quarter  include $21.7  million  generated by InterTAN from the date of the
     acquisition  on May 12,  2004,  to the  quarter  end on May 31,  2004.  The
     finance operation issued and serviced  private-label  credit cards prior to
     the  sale  of  the  operation.  The  company  completed  the  sale  of  its
     private-label  finance  operation,  comprised of its private-label and Visa
     credit  card  programs,  to Bank  One on May 25,  2004.  Results  from  the
     private-label finance operation, including transition and transaction costs
     of  approximately  $6 million  related to the sale of the operation to Bank
     One Corporation,  are included in finance income. See Note 4 for additional
     discussion of finance income. The company and Bank One have entered into an
     ongoing  arrangement  under  which Bank One is offering  private-label  and
     co-branded  credit cards to new and  existing  customers of the company and
     providing credit card services to all cardholders. After the sale date, the
     earnings  contribution from that arrangement has been included in net sales
     and operating revenues on the consolidated  statements of operations and is
     included in the domestic retail segment.  This  contribution was immaterial
     in this fiscal year's first quarter.

     The company  allocates  substantially all depreciation and amortization and
     interest  expense within the domestic and  international  retail  operation
     segments. The accounting policies for all of the company's 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 2004
     Annual Report on Form 10-K.


                                 Page 11 of 26


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



                                                                      Three Months Ended
                                                                             May 31
     (Amounts in millions)                                            2004           2003
     ----------------------------------------------------------------------------------------
     Domestic retail operation.................................     $2,044.9      $  1,933.3
     International retail operation............................         21.7                -
     Finance operation.........................................         28.1            28.4
                                                                 ---------------------------
     Total revenue.............................................      2,094.7         1,961.7
     Less:  securitization income*.............................         28.1            28.4
                                                                 ----------------------------
     Net sales and operating revenues .........................     $2,066.6      $  1,933.3
                                                                 ===========================

     *Securitization  income is  included in finance  income,  which is reported
     separately  from net sales and  operating  revenues  on the  statements  of
     operations.


     The loss from  continuing  operations  before  income  taxes by  reportable
     segment and the reconciliation to the consolidated statements of operations
     was as follows:
                                                                     Three Months Ended
                                                                           May 31
     (Amounts in millions)                                            2004           2003
     ----------------------------------------------------------------------------------------
     Domestic retail operation.................................  $   (14.5)       $    (54.7)
     International retail operation............................        0.6                 -
     Finance operation*........................................        5.6               8.0
                                                                 --------------------------
     Loss from continuing operations before income
         taxes.................................................  $    (8.3)       $    (46.7)
                                                                 ===========================

     *Results from the finance  operation do not include certain indirect costs.
     See Note 5 to the  consolidated  financial  statements in this report for a
     discussion of the indirect costs excluded.


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

                                                                   At May 31         At February 29
     (Amounts in millions)                                            2004                 2004
     --------------------------------------------------------------------------------------------------
     Domestic retail operation................................      $3,190.0              $3,031.7
     International retail operation...........................         385.0                     -
     Finance operation........................................          74.0                 601.3
     Discontinued operation...................................           5.1                     -
                                                                  --------------------------------
     Total assets.............................................      $3,654.1              $3,633.0
                                                                    ==============================

     Goodwill and intangible assets by reportable segment were as follows:

                                                                    At May 31          At February 29
     (Amounts in millions)                                            2004                 2004
     --------------------------------------------------------------------------------------------------
     Domestic retail operation................................      $    5.4              $   -
     International retail operation...........................         213.4                  -
     Finance operation........................................             -                  -
                                                                  -------------------------------------
     Total goodwill and intangible assets.....................        $218.8              $   -
                                                                  =====================================



                                 Page 12 of 26


13.  Supplemental Consolidated Statement of Cash Flows Information

     The following table summarizes non-cash investing and financing  activities
     for the three months ended May 31, 2004.



                                                                                    Three Months Ended
     (Amounts in thousands)                                                            May 31, 2004
     -----------------------------------------------------------------------------------------------------
     Supplemental schedule of non-cash investing and financing
       activities:
       Capital lease obligation..................................................      $     2,754
                                                                                  ========================

      Acquisition of InterTAN:
           Fair value of assets acquired:
                  Cash and cash equivalents.....................................       $    30,615
                  Merchandise inventory.........................................            92,960
                  Property and equipment, net...................................            42,614
                  Goodwill and other intangible assets..........................           210,057
                  Other assets..................................................             8,684
                                                                                  ------------------------
                  Total fair value of assets acquired...........................           384,930

           Less: Liablities assumed.............................................            88,709
                 Cash acquired..................................................            30,615
                                                                                  ------------------------
           Acquistion of InterTAN, net of cash acquired.........................          $265,606
                                                                                  ========================

       Acquisition of MusicNow:
           Fair value of assets acquired........................................       $     7,622
           Less: Liabilities assumed............................................             1,274
                                                                                  ------------------------
           Acquistion of MusicNow...............................................       $     6,348
                                                                                  ========================


14.  Foreign Currency Translation

     The local  currency of InterTAN,  the Canadian  dollar,  is its  functional
     currency.  For reporting  purposes,  assets and  liabilities are translated
     into U.S.  dollars using the exchange  rates in effect at the balance sheet
     date,  income  and  expense  items are  translated  using  monthly  average
     exchange  rates.  The  effects of  exchange  rate  changes on net assets of
     InterTAN are recorded in equity as part of accumulated other  comprehensive
     income. Gains and losses from foreign currency transactions are included in
     the operations of each period.

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

On May 12, 2004, we acquired a controlling  interest in InterTAN,  Inc. for cash
consideration of 265.6 million,  which includes  transaction costs and is net of
cash  acquired  of $30.6  million.  InterTAN is a leading  consumer  electronics
retailer  of  both  private-label  and  internationally  branded  products  with
headquarters  in  Barrie,  Ontario,  Canada.  In  addition  to  enabling  us  to
accelerate  the offering of  private-label  merchandise  to our  customers,  the
acquisition  of InterTAN  gives us our first  presence in the  Canadian  market.
Total sales for the first quarter  include  sales of $21.7 million  generated by
InterTAN from the date of the acquisition on May 12, 2004, to the quarter end on
May 31,  2004.  InterTAN  did not have a  material  impact  on the net loss from
continuing operations for the first quarter of the current fiscal year.

On May 25, 2004, we completed the sale of our private-label  finance  operation,
comprised of our private-label and co-branded Visa credit card programs, to Bank
One Corporation.  Results from the private-label  finance  operation,  including
transition and transaction  cost of approximately $6 million related to the sale
of the  operation to Bank One, are included in finance  income.  We also entered
into a Consumer Credit Card Program Agreement with Bank One under which Bank One
is offering private-label and co-branded credit


                                 Page 13 of 26


cards to new and existing customers.  As part of the program agreement,  we plan
to jointly  develop and introduce  new features,  products and services to drive
additional  sales. We are compensated  under the program  primarily based on the
number  of  new  accounts  opened.  Bank  One  is  obligated  to  offer  special
promotional financing terms to our customers. We determine the frequency, volume
and,  subject  to certain  limits,  the terms of these  promotions.  Bank One is
compensated  for these  promotions in accordance with a negotiated fee schedule.
The program agreement has an initial  seven-year term with automatic  three-year
renewals. The agreement has customary  representations,  warranties,  covenants,
events of default and  termination  rights for an agreement of this type.  After
the sale date,  the earnings  contribution  from the program  agreement has been
included in net sales and operating  revenues on the consolidated  statements of
operations,  but was immaterial in this fiscal year's first quarter.  See Note 4
and  Note  12 to the  consolidated  financial  statements  in  this  report  for
additional   discussion   concerning  the  sale  of  the  private-label  finance
operation.

On November 18, 2003, we completed the sale of our bankcard  finance  operation,
which  included Visa and  MasterCard  credit card  receivables  and related cash
reserves.  Results from the bankcard finance  operation are presented as results
from discontinued operation. See Note 2 to the consolidated financial statements
in this report for  additional  discussion  concerning  the sale of the bankcard
finance operation.

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 2004 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 plans,  accounting for stock-based  compensation  expense
and accounting for cash consideration received from vendors.

During the first  quarter  of fiscal  2005,  we  recognized  goodwill  and other
intangible  assets  related to our  acquisition  of InterTAN.  We have added the
following critical accounting policy.

Accounting for Goodwill and Intangible Assets

We account for goodwill and  intangible  assets in accordance  with Statement of
Financial  Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
SFAS No. 142 requires that goodwill and other intangible  assets with indefinite
useful lives no longer be amortized,  but instead evaluated for impairment on an
annual basis,  or more frequently if certain events or  circumstances  exist. We
will  evaluate  the  goodwill  balance in the last  quarter of the fiscal  year.
Through the impairment test,  goodwill,  other intangible  assets,  and tangible
assets and liabilities  are divided among reporting  units. If the fair value of
those  reporting  units is less than the carrying  value,  then the implied fair
value of the  goodwill of the  reporting  unit must be compared to the  carrying
value of that  goodwill.  In the instance that the fair value of the goodwill is
less  than  the  carrying  value,  goodwill  is  deemed  to be  impaired  and an
impairment  loss, equal to the excess of the fair value over the carrying value,
must be recorded.

The  performance  of the  goodwill  impairment  test is subject  to  significant
judgement  in  determining  the  fair  value  of  reporting  units,  due  to the
estimation of future cash flows, discount rates, and other assumptions.  Changes
in these estimates and assumptions  could have a significant  impact on the fair
value and/or goodwill impairment of each reporting unit.

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 14 of 26


Discussion  of our  results  of  operations  includes  InterTAN  results  unless
otherwise noted.

Net Sales and Operating Revenues

Total sales for the first quarter of fiscal 2005  increased 6.9 percent to $2.07
billion from $1.93 billion in last fiscal year's first quarter. Comparable store
merchandise  sales increased 6.4 percent for the first quarter of fiscal 2005. A
store is included in comparable store merchandise sales after the store has been
open  for a  full  year.  Relocated  stores  are  included  immediately  in  the
comparable  store base.  InterTAN stores open at the date of acquisition will be
included in the comparable store base beginning in June 2005.

The first  quarter  comparable  store sales  increase in part  reflects the soft
performance  in  last  year's  first  quarter,  when  we  produced  our  weakest
comparable store sales performance of that year. Year-over-year  improvements in
the average ticket size and the close ratio, despite relatively unchanged levels
of traffic,  demonstrate the increased focus on execution in our stores. We also
continued to generate strong growth in Web-originated sales.

The percent of merchandise  sales represented by each major product category for
the three months ended May 31, 2004 and 2003 was as follows:

                                                           Three Months Ended
                                                               May 31
                                                       2004              2003
------------------------------------------------------------------------------
Video.............................................      42%              40%
Audio.............................................      13               14
Information technology............................      33               33
Entertainment.....................................      12               13
                                                      ------------------------
Total.............................................     100%            100%
                                                       ======================

In the video category, we produced an upper-single-digit  comparable store sales
increase,  driven by sales of new-technology  televisions.  Video category sales
reflect  double-digit  growth in digital  televisions and triple-digit growth in
plasma and LCD  televisions.  Double-digit  comparable store sales growth in DVD
players and in digital imaging  products  further  contributed to the category's
comparable store sales increase. A double-digit decline in tube television sales
and a slight decline in camcorder  sales partly offset the growth in other video
products.

A  low-single-digit  comparable  store  sales  increase  for the audio  category
includes single-digit comparable store sales growth in mobile audio products and
double-digit  comparable  store sales growth in portable audio, but double-digit
sales declines in home audio.

In the  information  technology  category,  we generated  an  upper-single-digit
comparable  store sales  increase  led by  double-digit  comparable  store sales
growth in personal computer hardware. Double-digit comparable store sales growth
in notebooks  and  monitors and  single-digit  growth in desktop  computers  was
partly offset by double-digit comparable store sales declines in printers.

In the entertainment  category, we produced a low-single-digit  comparable store
sales increase that included double-digit comparable store sales growth in video
software  and  single-digit  sales  growth  in music  software.  Growth in these
categories  was partly  offset by  double-digit  declines in game  software  and
hardware sales.

Our domestic  retail  operation  sells extended  warranty  programs on behalf of
unrelated third parties that are the primary  obligors.  For our domestic retail
operation  segment,  the total extended warranty revenue included in total sales
was $77.2 million, or 3.8 percent of domestic retail sales, in the first quarter
of fiscal 2005,  compared with $72.4 million,  or 3.7 percent of sales,  in last
fiscal year's first quarter.


                                 Page 15 of 26


The following table provides the numbers of our domestic retail segment units:



                                                         May 31, 2004        Feb. 29, 2004         May 31, 2003
---------------------------------------------------------------------------------------------------------------
Superstores.......................................            602                 599                   611
Mall-based stores.................................              5                   5                    15
                                                      ----------------------------------------------------------
Total domestic retail segment units...............            607                 604                   626
                                                      ==========================================================

In fiscal 2005, we expect to open 60 to 70  Superstores  in our domestic  retail
operation segment, approximately half of which will be new locations and half of
which will be  relocations.  In the first  quarter of fiscal 2005, we opened two
new  Superstores  and  opened  one  Superstore  that  was  a  replacement  for a
Superstore we closed in late fiscal 2004.

The following  table  provides the numbers of our  international  retail segment
units:

                                                         May 31, 2004
---------------------------------------------------------------------
Company-operated stores...........................            509
Dealer outlets....................................            379
Rogers Wireless stores............................             84
Battery Plus stores...............................             30
                                                      -----------------
Total international retail segment units..........          1,002
                                                      =================

InterTAN's  company  operated stores operate under the trade name  "RadioShack."
Dealer outlets are independent  retail  businesses which operate under their own
trade names but are permitted,  under dealer agreements,  to purchase any of the
products sold by InterTAN  company stores.  Rogers Wireless stores are dedicated
primarily to the sale of wireless services,  including related hardware, offered
by  Rogers  Wireless,  Inc.  Battery  Plus  stores  retail  batteries  and other
specialty consumer electronics products.

Cost of Sales, Buying and Warehousing

The gross profit  margin was 23.2 percent of sales in both the first  quarter of
fiscal 2005 and the first  quarter of fiscal 2004.  Increased  efficiency in our
product service organization and the inclusion of InterTAN drove improvements in
the gross  profit  margin,  but these  improvements  were offset by  promotional
pricing in a number of categories. The inclusion of InterTAN results from May 12
to May 31  contributed 18 basis points to this year's first quarter gross profit
margin.

Finance Income

We completed the sale of our private-label  finance operation,  comprised of our
private-label  and co-branded Visa credit card programs,  to Bank One on May 25,
2004.  Results from the private-label  finance operation through the date of the
sale,  including  transition and transaction  costs of  approximately $6 million
related  to the sale of the  operation  to Bank One,  are  included  in  finance
income. See Note 1, Note 4 and Note 12 to the consolidated  financial statements
in  this  report  for   additional   discussion   concerning  the  sale  of  our
private-label finance operation.

For the three  months  ended May 31,  2004 and 2003,  the  components  of pretax
finance income were as follows:

                                                                       Three Months Ended
                                                                             May 31
(Amounts in millions)                                                 2004            2003
----------------------------------------------------------------------------------------------
Securitization income...........................................      $28.1          $ 28.4
Less: Payroll and fringe benefit expenses.......................        7.6             8.0
        Other direct expenses...................................       14.9            12.4
                                                                  ----------------------------
Finance income..................................................     $  5.6          $  8.0
                                                                  ============================



                                 Page 16 of 26


Finance income is reduced by payroll,  fringe  benefits and other costs directly
associated  with  the  management  and   securitization   of  the  private-label
receivables.  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 fees,  transition and
transaction costs related to the sale of the private-label finance operation 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.

Selling, General and Administrative Expenses



                                                    Three Months Ended May 31
                                                 2004                  2003
                                                      % of                    % of
(Dollar amounts in millions)                   $      Sales          $        Sales
-------------------------------------------------------------------------------------
Store expenses..........................     $451.3   21.8%        $442.6     22.9%
General and administrative
     expenses...........................       35.9    1.8           36.1      1.9
Remodel expenses........................        0.1       -          11.4      0.6
Relocation expenses.....................        1.9    0.1            5.1      0.2
Pre-opening expenses....................        0.8       -           1.7      0.1
Interest income.........................       (2.1)  (0.1)          (2.4)    (0.1)
                                          ------------------------------------------
Total  .................................     $487.9   23.6%        $494.5     25.6%
                                          =========================================


The year-over-year 200-basis-point improvement was primarily driven by:
o    lower rent and  occupancy  costs as a percent of sales,  largely  resulting
     from  the  closure  of 19  under-performing  stores  in  February  2004 and
     leverage generated by comparable store sales growth;
o    a reduction in  relocation  and remodel  expense,  which  reflected a lower
     level of activity in this year's first quarter; and
o    positive  leverage in payroll  costs for the stores as well as district and
     regional store operations.

The inclusion of InterTAN results in the consolidated results from May 12 to May
31 increased the expense  ratio by 13 basis  points.  The increase in the dollar
amount of store expenses largely reflects the inclusion of InterTAN expenses.

This year's first quarter  expenses  included  $1.9 million of relocation  costs
associated  with  accelerated  depreciation  of assets related to planned future
relocations.  Expenses in last year's first  quarter  included  $16.5 million of
remodel and relocation costs, including costs related to the refixturing of nine
Superstores,  the  relocation of three  Superstores  and the full remodel of one
Superstore,  as well as  accelerated  depreciation  on assets to be taken out of
service as a result of the store remodeling and relocation program.

We continue to anticipate that capital expenditures,  net of sale-leasebacks and
tenant  improvement  allowances,  will total  approximately  $165 million in the
current  fiscal year and that expenses  related to  relocations  and one remodel
will total approximately $52 million in fiscal 2005. We incurred $1.9 million or
approximately  4 percent of the anticipated  remodel and relocation  expenses in
the first  quarter and expect the  remainder to be spread  approximately  evenly
across the remaining three quarters of the fiscal year.

Interest Expense

Interest  expense was $0.4 million for the three months ended May 31, 2004,  and
$1.0 million for the three months ended May 31, 2003.  Interest  expense for the
first  quarter  of last  fiscal  year  reflects  interest  paid as a  result  of
completed audits of prior year income tax returns.


                                 Page 17 of 26


Income Taxes

The effective  income tax rate applicable to results from continuing  operations
was 36.6 percent for the three  months ended May 31, 2004,  and 39.9 percent for
the three months ended May 31, 2003. The decrease reflects lower estimated state
and local income taxes.  The estimated  effective  income tax rate applicable to
results from continuing operations for the domestic retail operation segment for
fiscal 2005 is expected to be 36.7 percent.  The estimated  effective income tax
rate  applicable to results from  continuing  operations  for the  international
retail  operation  segment for fiscal 2005 is expected to be 38.5  percent.  The
consolidated  effective  income tax rate  applicable to results from  continuing
operations will be the weighted average of all of our segments' rates.

Net Loss from Continuing Operations

The net loss from continuing  operations was $5.2 million, or 3 cents per share,
in the first quarter  ended May 31, 2004,  compared  with $28.1  million,  or 14
cents per share, in the first quarter of last fiscal year. The first quarter net
loss from continuing  operations  includes after-tax  transition and transaction
costs  of   approximately   $4  million   related  to  the  disposition  of  the
private-label finance operation. InterTAN results did not have a material impact
on the net loss from continuing operations.

Net Loss from Discontinued Operation

On November 18, 2003, we completed the sale of our bankcard finance operation to
FleetBoston Financial. Results from the bankcard finance operation are presented
as results from discontinued operation. The sale agreement included a transition
services  agreement under which employees of our finance operation  continued to
service the bankcard  accounts until final conversion of the bankcard  portfolio
to FleetBoston,  which occurred on April 2, 2004. Through that date, FleetBoston
reimbursed us for operating  costs  incurred  during the transition  period.  We
incurred severance costs ratably through the final conversion date.

The after-tax loss from the discontinued bankcard finance operation totaled $0.7
million  for the  quarter  ended May 31,  2004,  and $18.6  million for the same
period last fiscal year.

Operations Outlook

Our  attention  is focused  on  building  value for  shareholders  by  providing
superior consumer electronics  solutions to families.  We remain focused on four
basic areas: 1) driving store revenue growth, 2) growing Web-based revenues,  3)
stabilizing gross margins and 4) bringing our overall cost and expense structure
in line with our current level of revenues. We believe we have the right plan in
place to combine profitable revenue growth with improved in-store execution, and
we have the resources to execute that plan.

Growing store revenues  requires a focused team effort among numerous  functions
including store operations,  merchandising, Circuit City Direct, marketing, real
estate and  finance.  An  important  component  of driving  sales  growth is the
ongoing store  revitalization  plan, which incorporates opening new locations in
vibrant trade areas, relocating stores to better locations within existing trade
areas and, to a lesser  extent,  improving the  performance  of existing  stores
through remodeling activities designed to improve the shopping experience.  From
the  beginning  of fiscal 2001  through May 31,  2004,  134  Superstores,  or 22
percent of our 602 Superstores,  had been newly constructed,  relocated or fully
remodeled to provide a contemporary shopping experience with easy product access
and  more  powerful  merchandising  displays.  We  expect  that  ratio  to reach
approximately 30 percent by the end of this fiscal year. At the end of the first
quarter,  we had 27  relocated  stores  that  have  been  open for more than six
months. In their first full six months following grand opening,  these 27 stores
averaged sales changes that were  approximately 27 percentage points better than
the sales pace of the  remainder  of the store base during the same time periods
and an  internal  rate of return of  approximately  16  percent.  We expect some
movement in the sales lift and IRR  statistics as we add new stores to what is a
relatively  small  relocation base, but we continue to expect that over the long
term, store  relocations  will produce  attractive  results.  In fiscal 2005, we
expect to open 60 to 70  Superstores,  approximately  half of which  will be new
locations and half of which will be relocations.


                                 Page 18 of 26


Our Circuit City Direct  organization  is focused on  continuing to drive strong
Web-originated  sales  growth.  We have an  aggressive  plan that  includes  new
merchandise  offerings;  improved Web site capabilities and  functionality;  new
partnerships;  the  introduction  of on-line credit  applications  and financing
through Bank One;  strengthening  of integration  and  cross-marketing  with our
Superstores;  and continual testing of new price and promotional strategies.  In
the  fall,  we  expect  to  launch  our  redesigned  Web site with many of these
features.  Our recent  acquisition of the assets of MusicNow reflects our belief
that there is a significant  Internet-based  opportunity  to drive sales through
the delivery of licensed content.

We have many ongoing activities throughout the company that we expect to benefit
the gross profit margin, which may include
o    expanding our  own-brand  product  assortments  as we head into the holiday
     season, especially through integrating InterTAN's products;
o    reducing the cost of acquisition of products through increased  competition
     among vendors in certain product areas;
o    examining   the  balance  of  products   within  each   product   category,
     particularly between price points and across vendors;
o    rationalizing the number of items offered in low-volume stores;
o    expanding the use of markdown optimization tools;
o    improving inventory forecasting; and
o    focusing on selling attachments and services.

We were pleased with the year-over-year  improvement in our selling, general and
administrative  expenses as a percentage of sales for the quarter. During fiscal
2004, we implemented improvements such as consolidating  districts,  regions and
divisions;  centralizing indirect  procurement;  rightsizing corporate missions;
and closing  under-performing  stores.  We continue to believe that reducing our
expense  structure  is an integral  component of building a new Circuit City and
will continue to focus on driving additional expense reductions.

FINANCIAL CONDITION

Liquidity and Capital Resources

At May 31, 2004, we had cash and cash  equivalents of $990.6  million,  compared
with $783.5  million at February  29, 2004.  The higher cash  balance  primarily
reflects  the  net  cash  proceeds  of  $472.7  million  from  the  sale  of the
private-label  finance operation partly offset by acquisition costs for InterTAN
of $265.6  million,  net of cash  acquired.  During the first  quarter of fiscal
2005, we also used $71.1  million of cash to  repurchase  common stock under the
company's stock buyback authorization.

At May 31,  2003,  we had cash and  cash  equivalents  of  $615.6  million.  The
year-over-year change in the cash balance largely reflects the net cash proceeds
of $472.7 million from the sale of the  private-label  finance operation and the
net  cash  proceeds  of $282  million  from  the  sale of the  bankcard  finance
operation,  partly offset by acquisition  costs for InterTAN of $265.6  million,
net of cash acquired.  Since the end of the first quarter of fiscal 2004 through
May 31, 2004,  we also used $141.5  million of cash to  repurchase  common stock
under the company's stock buyback authorization.

Operating Activities.  In the three months ended May 31, 2004, net cash provided
by  operating  activities  was $105.5  million,  compared  with net cash used in
operating  activities of $154.0  million in the three months ended May 31, 2003.
The increase in net cash  provided by operating  activities  is primarily due to
changes in retained interests in securitized receivables;  accounts payable; and
accrued  expenses and other current  liabilities,  and accrued income taxes. The
change in merchandise  inventory is consistent with the prior year change due to
the seasonal nature of our business.

Retained interests in securitized  receivables decreased by $32.9 million in the
first three months of fiscal 2005,  compared with an increase of $115.6  million
in the first three months of last fiscal year. The current year decrease relates
to the sale of the  private-label  finance  operation.  The prior year  increase
reflects the


                                 Page 19 of 26


completion  of  a  $500  million   private-label   credit  card   securitization
transaction to replace a maturing term securitization.

Accounts payable  increased by $70.5 million in the first three months of fiscal
2005,  compared  with a decrease of $63.3  million in the first three  months of
last fiscal year.  The $133.8  million  difference  primarily  relates to slowed
purchasing  activity  in the last two  months  of  fiscal  2004 to  correct  our
inventory levels following lower-than-anticipated December 2003 sales.

Accrued  expenses  and  other  current  liabilities  and  accrued  income  taxes
decreased by $4.7  million in the first three  months of fiscal  2005,  compared
with a decrease of $43.6  million in the first three months of last fiscal year.
The $38.9 million  difference  primarily  reflects the impact of accrued  income
taxes related to the sale of our private-label finance operation.

Investing Activities. For the three months ended May 31, 2004, net cash provided
by  investing  activities  was  $176.7  million  compared  with net cash used in
investing  activities  of $20.6 million for the three months ended May 31, 2003.
The increase in net cash  provided by investing  activities  is primarily due to
net cash proceeds of $472.7 million from the sale of the  private-label  finance
operation offset by net acquisition costs for InterTAN of $265.6 million.

Financing Activities.  For the three months ended May 31, 2004, net cash used in
financing activities was $69.3 million, compared with net cash used in financing
activities of $17.2 million for the three months ended May 31, 2003.  The change
primarily  reflects  $71.1  million used to  repurchase  common stock during the
first  quarter of this fiscal year  compared  with $13.9 million used during the
same period last fiscal  year.  Based on the market value of the common stock at
May 31, 2004,  the then  remaining  $44.6  million of the original  $200 million
authorization would allow for the repurchase of up to approximately 2 percent of
the 199.3 million shares then outstanding.  In June 2004, the board authorized a
$200 million increase in the company's stock repurchase authorization.  Based on
the market value of the common stock at May 31,  2004,  the $244.6  million that
remains  authorized  would allow for the  repurchase of up to  approximately  10
percent of the 199.3 million shares outstanding on May 31, 2004.

We have a $500 million  revolving credit facility  secured by inventory.  At May
31, 2004, there were no short-term borrowings on this facility. At May 31, 2004,
outstanding  letters of credit  related  to this  facility  were $64.8  million,
leaving $435.2 million  available for borrowing.  We were in compliance with all
covenants under this facility at May 31, 2004.

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

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 2005 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 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


                                 Page 20 of 26


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    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  economic  conditions  including,  but not  limited  to,
     consumer  credit  availability,  consumer  credit  delinquency  and default
     rates, interest rates,  inflation,  personal discretionary 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
     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  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 plan;
o    consumer  reaction to new store  locations  and changes in our store design
     and merchandise;
o    the timing and amount of any adjustments  affecting the transaction  costs,
     severance costs or post-closing  adjustments to income that may be required
     as a result of the sale of the private-label finance operation;
o    our  ability  and the  ability of Bank One to  successfully  integrate  our
     retail business with the credit card program being offered by Bank One;
o    future levels of sales  activity and the  acceptance of the Bank One credit
     program by consumers on an ongoing basis;
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 customer service initiatives;
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;
o    our ability to integrate and operate  InterTAN  successfully and to realize
     the  anticipated  benefits  of  the  transaction,   including  successfully
     introducing  InterTAN's products in our Superstores and realizing inventory
     purchasing synergies;
o    reduced investment returns in our pension plan;
o    changes in our anticipated cash flow;
o    adverse results in significant  litigation  matters,  including the outcome
     and impact on InterTAN of litigation  instituted by RadioShack  Corporation
     to terminate  InterTAN's right to use the RadioShack(R)  name in Canada and
     related rights to purchase merchandise through RadioShack;
o    currency exchange rate  fluctuations  between Canadian and U.S. dollars and
     other currencies; and
o    the regulatory and trade environment in the U.S. and Canada.

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


                                 Page 21 of 26


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


As a result of the  acquisition of InterTAN,  we are exposed to market risk from
potential changes in the U.S./Canadian currency exchange rates as they relate to
inventory purchases and the translation of InterTAN's financial results.

Inventory Purchases

A portion of InterTAN's  purchases were from vendors  requiring  payment in U.S.
dollars. Accordingly,  there is risk that the value of the Canadian dollar could
fluctuate  relative to the U.S. dollar from the time the goods are ordered until
payment is made.  InterTAN's  management  monitors  the  foreign  exchange  risk
associated  with its U.S. dollar open orders on a regular basis by reviewing the
amount of such open  orders,  exchange  rates,  including  forecasts  from major
financial institutions,  local news and other economic factors. At May 31, 2004,
the  exchange  risk was not being  managed  through the use of forward  exchange
contracts.  At May 31, 2004, U.S.  dollar purchase orders totaled  approximately
$30.0 million.  A 10 percent  decline in the value of the Canadian  dollar would
result in an  increase  in  product  cost of  approximately  $3.0  million.  The
incremental  cost of such a decline in currency  values,  if incurred,  would be
reflected  in higher cost of sales in future  periods.  In these  circumstances,
management would take product-pricing action, where appropriate.

Translation of Financial Results

Fluctuations  in the  value  of the  Canadian  dollar  have a direct  effect  on
reported  consolidated  results due to the  acquisition  of InterTAN.  We do not
hedge against the possible  impact of this risk. A 10 percent  adverse change in
the foreign  currency  exchange rate would not have a significant  impact on our
results of operations or financial position.

ITEM 4.  CONTROLS AND PROCEDURES

Under the supervision and with the  participation  of the company's  management,
including the chief executive officer and chief financial  officer,  the company
has evaluated the effectiveness of its "disclosure  controls and procedures," as
that term is 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 chief  executive  officer  and chief
financial  officer  concluded  that  the  company's   disclosure   controls  and
procedures  are  effective.  There  were no changes  in the  company's  internal
control over  financial  reporting in the quarter ended May 31, 2004,  that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
company's internal control over financial reporting.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On March 31, 2004,  Circuit City announced a public tender offer to purchase the
stock of InterTAN.  Circuit City completed the acquisition and InterTAN became a
wholly owned  subsidiary  of Circuit City on May 19, 2004.  Among other  things,
InterTAN  operates retail consumer  electronics  outlets under the RadioShack(R)
name in Canada  under a licensing  agreement  with a  subsidiary  of  RadioShack
Corporation.  InterTAN also operates under two other  agreements with RadioShack
and  its  subsidiaries   ("RadioShack"):   a  merchandising   agreement  and  an
advertising agreement.

After the March 31, 2004 announcement,  RadioShack asserted early termination of
all three  agreements  under a variety of theories  and on a variety of proposed
termination dates.  RadioShack asserts that InterTAN failed to pay an annual fee
in material  breach of the  advertising  agreement  and,  alternatively,  that a
"without cause" termination of the advertising agreement triggers termination of
the other agreements.

On April 5, 2004,  RadioShack  filed suit  against  InterTAN in Tarrant  County,
Texas,  and amended that suit on April 27, 2004.  InterTAN  disputes the various
termination scenarios alleged by RadioShack and is vigorously


                                 Page 22 of 26


defending  against  those  claims.   On  May  11,  2004,   InterTAN  asserted  a
counterclaim seeking a declaration under U.S. federal trademark law that the use
of the RadioShack  marks is proper.  Circuit City was added as a necessary party
to that  litigation  and  removed  the matter to Federal  Court in the  Northern
District of Texas.  On May 12, 2004,  Circuit City filed its own suit in Federal
Court in the Northern District of Texas seeking a declaration under U.S. federal
trademark  law that the use of the  marks in  Canada  is  proper.  InterTAN  has
cross-claimed against RadioShack based on federal trademark law and remedies for
business disparagement.

Circuit City believes that  RadioShack is not entitled to early  termination  of
the  agreements  and that InterTAN has  substantial  defenses to the  RadioShack
claims.  Circuit  City  intends to  vigorously  pursue its claims and defend the
claims in the RadioShack litigation.  Circuit City believes that this litigation
will not have a material adverse effect on the company's  financial condition or
results of operations.

ITEM 2. CHANGES IN  SECURITIES,  USE OF PROCEEDS AND ISSUER  PURCHASES OF EQUITY
SECURITIES

     The following table provides  information about common stock repurchases by
     or on behalf of the company during the quarter ended May 31, 2004:



                                                                                                                    Maximum Dollar
                                                                                                  Total Number         Value of
                                                                                                    of Shares         Shares that
                                                                                    Average        Purchased as        May Yet Be
                                                           Total Number             Price        Part of Publicly       Purchased
                                                            of Shares               Paid             Announced          Under the
(Amounts in millions except per share data)                Purchased (1)          per Share           Program           Program (2)
-----------------------------------------------------------------------------------------------------------------------------------
March 1 - March 31, 2004............................                -             $      -                 -               $115.6
April 1 - April 30, 2004............................             4.0               $12.37                4.0             $   66.4
May 1 - May 31, 2004................................             1.8               $12.10                1.8             $   44.6
                                                        ------------------                       ------------------
Total Fiscal 2005 First Quarter.....................             5.8               $12.29                5.8
                                                        ==================                       ==================


(1) In addition to shares  purchased  as part of a publicly  announced  program,
includes  17,422  shares(1)  that  represent  shares  purchased  in  open-market
transactions  by two officers of the company who may be  considered  "affiliated
purchasers" as defined in Rule  10b-18(c)(3) and shares delivered to the company
to pay the  exercise  price  under stock  options or to satisfy tax  withholding
obligations upon the exercise of stock options or vesting of restricted stock.

(2) In  January  2003,  the  company  announced  that  the  board  of  directors
authorized the  repurchase of up to $200 million of common stock.  In June 2004,
the company  announced a $200 million increase in the company's stock repurchase
authorization,  raising the total repurchase capacity to $400 million.  There is
no expiration date under either authorization.


                                 Page 23 of 26


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),
               are 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),
               are expressly incorporated herein by this reference.

      4.1      Third Amended and Restated  Rights  Agreement dated as of October
               1, 2002,  between the  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),  is  expressly
               incorporated herein by this reference.

      10.1     Employment agreement between the company and Brian E. Levy, filed
               herewith.*

      10.2     InterTAN, Inc. Amended and Restated 1996 Stock Option Plan, filed
               herewith.*

      31       Rule 13a-14(a)/15d-14(a) Certifications

               (i) Certification  of CEO under Rule  13a-14(a) of the Securities
                   Exchange Act of 1934

               (ii)Certification  of CFO under Rule  13a-14(a) of the Securities
                   Exchange Act of 1934

      32       Section 1350 Certifications

               (i) Certification of CEO under Section 906 of the  Sarbanes-Oxley
                   Act of 2002

               (ii)Certification of CFO under Section 906 of the  Sarbanes-Oxley
                   Act of 2002

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

(b) Reports on Form 8-K

    The Forms 8-K  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.

               (i)  On March 4, 2004,  Circuit City Stores,  Inc.  announced its
                    fourth   quarter   and  fiscal   year  2004  sales  and  the
                    appointment of Rick Goings to the board of directors.

               (ii) On March 29, 2004,  Circuit City Stores,  Inc. announced its
                    adoption  of  the  fair  value  recognition  provisions  for
                    stock-based  compensation  in accordance  with  Statement of
                    Financial  Accounting  Standards  No.  123,  Accounting  for
                    Stock-Based  Compensation,  as  amended  by  SFAS  No.  148,
                    Accounting  for  Stock-Based  Compensation  - Transition and
                    Disclosure.

               (iii)On March 31, 2004,  Circuit City Stores,  Inc. announced its
                    results  for  the  fourth  quarter  and  fiscal  year  ended
                    February 29, 2004.


                                 Page 24 of 26


                                   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




July 9, 2004


                                 Page 25 of 26


                                  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),  are 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), are 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),  is  expressly  incorporated  herein by this
        reference.

10.1    Employment  agreement  between  the  company  and  Brian E.  Levy,  file
        herewith.*

10.2    InterTAN,  Inc.  Amended and  Restated  1996 Stock  Option  Plan,  filed
        herewith.*

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

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


                                 Page 26 of 26