---

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
JULY 19, 2003

OR

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

Commission file number
1-10204

CPI Corp.(Exact name of
registrant as specified in its charter)

|Delaware(State of Incorporation)                                                  |  | 43-1256674(I.R.S. Employer Identification No.)
|--------------------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                                  |  |                                               
|1706 Washington Ave., St. Louis,
Missouri(Address of principal executive offices) |  | 63103(Zip Code)                               

Registrants
telephone number, including are code: (314) 231-1575

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 and [2] has been subject to
such filing requirements for the past 90 days.

[ X ] Yes [    ] No

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

[ X ] Yes [    ] No

As of August 25, 2003, the Registrant
had 8,100,868 common shares outstanding.

---

---

|TABLE OF CONTENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|PART 1.  FINANCIAL INFORMATION
         Item 1.  Financial Statements
                      Interim Condensed Consolidated Balance Sheets
                      Interim Condensed Consolidated Statements of Operations
                      Interim Condensed Consolidated Statement of Changes in Stockholders' Equity and
                           Comprehensive Income (Loss)
                      Interim Condensed Consolidated Statements of Cash Flows
                      Notes to Interim Condensed Consolidated Financial Statements
         Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations
         Item 3. Quantitative and Qualitative Disclosures about Market Risk
         Item 4. Disclosure Controls and Procedures
PART II.  OTHER INFORMATION
         Item 4. Submission of Matters to a Vote of Security Holders
         Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
EXHIBIT INDEX
Computation of Per Share Earnings (Loss)
Section 302 Certification of Chief Executive Officer
Section 302 Certification of Chief Financial Officer
Section 906 Certification of Chief Executive Officer
Section 906 Certification of Chief Financial Officer

---

CPI CORP.INDEX TO QUARTERLY REPORT ON FORM 10-Q12 Weeks and 24 Weeks Ended July 19, 2003

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Page                                                                                                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------
|PART 1.  FINANCIAL INFORMATION                                                                                      
         Item 1.  Financial Statements
                      Interim Condensed Consolidated Balance Sheets
                      July 19, 2003 (Unaudited) and February 1, 2003
                      Interim Condensed Consolidated Statements of Operations (Unaudited)                      
                      12 and 24 Weeks Ended July 19, 2003 and July 20, 2002
                      Interim Condensed Consolidated Statement of Changes in Stockholders' Equity and                   
                      Comprehensive Income (Loss) (Unaudited)
                      24 Weeks Ended July 19, 2003
                      Interim Condensed Consolidated Statements of Cash Flows (Unaudited)                               
                      24 Weeks Ended July 19, 2003 and July 20, 2002
                      Notes to Interim Condensed Consolidated Financial Statements (Unaudited)                          
         Item 2.   Management's Discussions and Analysis of Financial Condition and Results of Operations           
         Item 3.   Quantitative and Qualitative Disclosures about Market Risk                                       
         Item 4.   Disclosure Controls and Procedures                                                               
PART II.  OTHER INFORMATION                                                                                         
         Item 4.   Submission of Matters to a Vote of Security Holders
         Item 6.   Exhibits and Reports on Form 8-K                                                                 
Signature                                                                                                           
Exhibit Index |  | 1
        3
        4
        5
        7
       10
       16
       16
       17
       18
       19
       20

---

CPI CORP.Interim Condensed
Consolidated Balance Sheets  Assets

PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

|thousands                                                          | July 19, 2003
 (Unaudited) | February 1, 2003
|------------------------------------------------------------------ | -------------------------- | ----------------
|ASSETS                                                             |                            |                 
|Current assets:                                                    |                            |                 
|Cash and cash equivalents                                          |                            |                 
|Accounts receivable:                                               |                            |                 
|Due from licensor store                                            |                            |                 
|Other                                                              |                            |                 
|Inventories                                                        |                            |                 
|Prepaid expenses and other current assets                          |                            |                 
|Refundable income taxes                                            |                            |                 
|Deferred tax assets                                                |                            |                 
|                                                                   |                            |                 
|Total current assets                                               |                            |                 
|                                                                   |                            |                 
|Property and equipment:                                            |                            |                 
|Land                                                               |                            |                 
|Building improvements                                              |                            |                 
|Leasehold improvements                                             |                            |                 
|Photographic, sales and manufacturing equipment                    |                            |                 
|                                                                   |                            |                 
|Total                                                              |                            |                 
|Less accumulated depreciation and amortization                     |                            |                 
|                                                                   |                            |                 
|Property and equipment, net                                        |                            |                 
|Assets of business transferred under contractual arrangements:     |                            |                 
|Preferred Security                                                 |                            |                 
|Loan receivable                                                    |                            |                 
|Assets of supplemental retirement plan:                            |                            |                 
|Cash surrender value of life insurance policies (net of borrowings |                            |                 
|of $1,596 at both July 19, 2003 and February 1, 2003)              |                            |                 
|Long-term investments held in Rabbi Trust                          |                            |                 
|Other assets, net of amortization of $1,359 at both                |                            |                 
|July 19, 2003 and February 1, 2003                                 |                            |                 
|                                                                   |                            |                 
|TOTAL ASSETS                                                       |                            |                 
|                                                                   |                            |                 

See accompanying notes.

1

---

CPI CORP. Interim Condensed
Consolidated Balance Sheets  Liabilities

|                                                                                | July 19, 2003 | 
|------------------------------------------------------------------------------- | ------------- | 
|
|LIABILITIES                                                                     |               | 
|Current liabilities:                                                            |               | 
|Current maturities of long-term debt                                            |               | 
|Accounts payable                                                                |               | 
|Accrued employment costs                                                        |               | 
|Customer deposit liability                                                      |               | 
|Sales taxes payable                                                             |               | 
|Accrued advertising expenses                                                    |               | 
|Accrued expenses and other liabilities                                          |               | 
|                                                                                |               | 
|Total current liabilities                                                       |               | 
|                                                                                |               | 
|Long-term debt, less current maturities                                         |               | 
|Accrued pension obligations                                                     |               | 
|Supplemental retirement plan obligations                                        |               | 
|Customer deposit liability                                                      |               | 
|Other liabilities                                                               |               | 
|                                                                                |               | 
|Total Liabilities                                                               |               | 
|                                                                                |               | 
|STOCKHOLDERS' EQUITY                                                            |               | 
|Preferred stock,no par value. 1,000,000 shares authorized; no shares oustanding |               | 
|Preferred stock, Series A, no par value, 200,000 shares authorized;             |               | 
|no shares outstanding                                                           |               | 
|Common stock, $.40 par value. 50,000,000 shares authorized; 18,339,171 and      |               | 
|18,288,006 shares issued at July 19, 2003 and February1, 2003, respectively     |               | 
|Additional paid in capital                                                      |               | 
|Retained earnings                                                               |               | 
|Accumulated other comprehensive loss                                            |               | 
|                                                                                |               | 
|                                                                                |               | 
|Treasury stock at cost, 10,238,303 shares at July 19, 2003 and February 1, 2003 |               | 
|Unamortized deferred compensation- restricted stock                             |               | 
|                                                                                |               | 
|Total stockholders' equity                                                      |               | 
|                                                                                |               | 
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      |               | 
|                                                                                |               | 

See accompanying notes.

2

---

CPI CORP.Interim Condensed Consolidated
Statements of Operations (Unaudited)

|                                                              | 12 Weeks Ended | 24 Weeks Ended |  
|------------------------------------------------------------- | -------------- | -------------- | -
|
|
|Net sales                                                     |                |                | $
|Cost and expenses:                                            |                |               
|Cost of sales (exclusive of depreciation and amortization     |                |               
|expenses shown below)                                         |                |                |  
|Selling, general and administrative expenses                  |                |                |  
|Depreciation and amortization                                 |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|Loss from operations                                          |                |                |  
|                                                             
|Interest expense                                              |                |                |  
|Interest income                                               |                |                |  
|Other income, net                                             |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|Loss before income tax benefit                                |                |                |  
|                                                             
|Income tax benefit                                            |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|Net loss from continuing operations                           |                |                | $
|                                                              |                |                |  
|                                                              |                |                |  
|Net earnings from discontinued operations, net of income tax  |                |               
|expense of $86 and $51, respectively                          |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|NET LOSS                                                      |                |                | $
|                                                              |                |                |  
|                                                              |                |                |  
|EARNINGS PER COMMON SHARE                                     |                |               
|Net loss per share from continuing operations - diluted       |                |                | $
|Net earnings per share from discontinued operations - diluted |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|Net loss per share - diluted                                  |                |                | $
|                                                              |                |                |  
|                                                              |                |                |  
|Net loss per share from continuing operations - basic         |                |                | $
|Net earnings per share from discontinued operations - basic   |                |                |  
|                                                              |                |                |  
|                                                              |                |                |  
|Net loss per share - basic                                    |                |                | $
|                                                              |                |                |  
|                                                              |                |                |  
|Dividends per share                                           |                |                | $
|                                                              |                |                |  
|                                                              |                |                |  
|Weighted average number of common and common equivalent       |                |               
|shares outstanding-diluted                                    |                |                |  
|Weighted average number of common and common equivalent       |                |               
|shares outstanding-basic                                      |                |                |  

See accompanying notes.

3

---

CPI CORP.Interim Condensed Consolidated Statement of Changes in Stockholders' Equity andComprehensive Income (Loss) (Unaudited)

|Twenty-four weeks ended July 19, 2003      |  |  |   |       |  |   |       
|------------------------------------------ |  |  | - | ----- |  | - | ------
|
|Balance at February 1, 2003                |  |  | $ | 7,315 |  | $ | 51,211
|Issuance of common stock to employee stock |  | 
|plans and option exercises (51,165 shares) |  |  |   | 21    |  |   | 638   
|Comprehensive income (loss):               |  | 
|Net loss                                   |  |  |   | --    |  |   | --    
|Foreign currency translation               |  |  |   | --    |  |   | --    
|Comprehensive loss                         |  |  |   | --    |  |   | --    
|Dividends ($.28 per common share)          |  |  |   | --    |  |   | --    
|Amortization of deferred compensation -    |  | 
|Restricted stock                           |  |  |   | --    |  |   | --    
|                                           |  |  |   |       |  |   |       
|Balance at July 19, 2003                   |  |  | $ | 7,336 |  | $ | 51,849
|                                           |  |  |   |       |  |   |       
|                                           |  | 

See accompanying notes.

4

---

CPI CORP. Interim Condensed
Consolidated Statements of Cash Flows(Unaudited)

|                                                      | 24 Weeks Ended
|----------------------------------------------------- | --------------
|
|Reconciliation of net loss to cash flows provided by  |               
|(used in) operating activities:                       |               
|                                                     
|Net loss from continuing operations                   |               
|                                                     
|Adjustments for items not requiring cash:             |               
|Depreciation and amortization                         |               
|Loss on disposition of property, plant and equipment  |               
|Deferred income taxes                                 |               
|Customer deposit liability                            |               
|Post-closing adjustment on preferred security         |               
|Accrued interest on preferred security                |               
|Other                                                 |               
|                                                     
|Decrease (increase) in current assets:                |               
|Receivables and inventories                           |               
|Refundable income taxes                               |               
|Prepaid expenses and other current assets             |               
|                                                     
|Increase (decrease) in current liabilities:           |               
|Accounts payable, accrued expenses and                |               
|other liabilities                                     |               
|                                                      |               
|                                                      |               
|Cash flows from continuing operations                 |               
|Cash flows from discontinued operations               |               
|                                                      |               
|                                                      |               
|Cash flows provided by (used in) operating activities |               
|                                                      |               
|                                                      |               

See accompanying notes.

5

---

CPI CORP.Interim Condensed Consolidated Statements of Cash Flows (...continued)
(Unaudited)

|                                                             | 24 Weeks Ended
|------------------------------------------------------------ | --------------
|
|Cash flows provided by (used in) operating activities        |               
|                                                            
|Cash flows provided by (used in) financing activities:       |               
|Repayment of long-term obligations                           |               
|Issuance of common stock to employee stock plans             |               
|and option exercises                                         |               
|Cash dividends                                               |               
|                                                             |               
|                                                             |               
|Cash flows used in financing activities:                     |               
|                                                             |               
|                                                             |               
|Cash flows provided by (used in) investing activities:       |               
|Additions to property and equipment                          |               
|Redemption of Preferred Security                             |               
|Changes in loan receivable:                                  |               
|Borrowings                                                   |               
|Repayments                                                   |               
|Purchase of investment securities in Rabbi Trust             |               
|Proceeds from sale of investment securities in Rabbi Trust   |               
|                                                             |               
|                                                             |               
|Cash flows used in investing activities:                     |               
|                                                             |               
|                                                             |               
|Effect of exchange rate changes on cash and cash equivalents |               
|                                                             |               
|                                                             |               
|Net decrease in cash and cash equivalents                    |               
|                                                            
|Cash and cash equivalents at beginning of period             |               
|                                                             |               
|                                                             |               
|Cash and cash equivalents at end of period                   |               
|                                                             |               
|                                                             |               
|Supplemental cash flow information:                          |               
|Interest paid                                                |               
|                                                             |               
|                                                             |               
|Income taxes paid                                            |               
|                                                             |               
|                                                             |               

See accompanying notes.

6

---

CPI CORP.Notes to Interim
Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS AND INTERIM CONDENSED
CONSOLIDATED              
   FINANCIAL STATEMENTS

The Company operates 1,024
professional portrait studios as of July 19, 2003 throughout the United States, Canada and
Puerto Rico under license agreements with Sears, Roebuck and Co. (Sears). On
August 14, 2003, the Company announced the execution of an amendment to its agreement with
Sears eliminating the existing exclusivity provision from that agreement. In return for
the removal of the exclusivity provision, the Company, upon certain conditions, has agreed
to provide Sears with certain contingent commission adjustments through 2008, the remaining term
of the current agreement. (See Note 5 for further information.) The Company opened its
first Mexican studio in Chihuahua, Mexico in late February 2003. That studio is located in
City Club, a wholesale club launched by Soriana, owner of a leading Mexican chain of
hypermarkets. During the second quarter of 2003, the Company opened three additional
studios in Mexico, one in a City Club location and two studios in Soriana hypermarkets. In
the first quarter of 2003, the Company also launched its mobile photography operations
under the name Everyday Expressions ® offering mobile photography services to childcare
centers in four metropolitan markets. By the end of the second quarter of 2003, the
Company was offering mobile photography services to childcare centers and youth sports
associations in twenty-seven markets throughout the United States. In addition, the
Company operates searsphotos.com, an on-line photofinishing service as well as a vehicle
for the Companys customers to archive, share portraits via email and order
additional portraits and products.

The Interim Condensed Consolidated
Balance Sheets as of July 19, 2003, the related Interim Condensed Consolidated Statements
of Operations for the 12 and 24 weeks ended July 19, 2003 and July 20, 2002, the Interim
Condensed Consolidated Statement of Changes in Stockholders Equity and Comprehensive
Income (Loss) for the 24 weeks ended July 19, 2003 and the Interim Condensed Consolidated
Statements of Cash Flows for the 24 weeks ended July 19, 2003 and July 20, 2002, are
unaudited. The interim financial statements reflect all adjustments (consisting only of
normal recurring accruals), which are, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented. The interim condensed
consolidated financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the CPI Corp. 2002 Annual Report on
Form 10-K for its fiscal year ended February 1, 2003. The results of operations for the
interim periods should not be considered indicative of results to be expected for the full
year.

Certain reclassifications have been
made to the 2002 financial statements to conform with the current year presentation.

NOTE 2  CONTINGENCIES

Contingent Lease
Obligations

In July 2001, the Company announced
the completion of the sale of its Prints Plus Wall Decor segment (Prints
Plus), which included the ongoing guarantee of certain operating real estate leases
of Prints Plus. As of July 19, 2003, the maximum future obligation to the Company under
these guarantees is $12.8 million before any negotiation with landlords or subleasing.
Based on scheduled lease payments, the maximum future obligations will decrease an
additional $2.6 million by the end of fiscal 2003, then by $4.7 million in 2004 and
approximately $4.8 million over the next three years. To recognize the risk associated
with these leases, a $1.0 million reserve was established in 2001. The $1.0 million
reserve was established assuming an

7

---

average of seventy-five days of lease
payments for each of the fifty-six leases then guaranteed by the Company. The seventy-five
day estimate was based upon the Companys historical experiences in settling lease
obligations resulting from early terminations of leases, taking into account the nature of
prime mall space represented by the guaranteed leases. The Company has recognized no
losses to date related to their obligations under these guarantees. At July 19, 2003, the
Company had made no further allowances for defaults under these operating leases as, in
the opinion of management, Prints Plus is meeting the performance standards established
under the operating leases.

Prints Plus Financial
Covenants

In conjunction with the
above-mentioned transaction, the Company received an $11.0 Preferred Security
(Preferred Security) and provided Prints Plus with a $6.4 million revolving
credit facility. The agreements governing both instruments contain certain operating and
financial covenants. During the second quarter of 2003, Prints Plus failed to achieve the
minimum EBITDA covenant included in the revolving credit facility, as amended, requiring
Prints Plus to maintain EBITDA for any consecutive four quarters of not less than $3.0
million. As of July 19, 2003, the Company provided Prints Plus with a waiver on the
violation of this covenant.

In assessing the recoverability of
its recorded investment in the Preferred Security and the revolving credit facility, the
Company reviews whether events or changes in circumstances indicate that the carrying
value of the preferred security and the amount advanced under the revolving line of credit
may not be recoverable. This review includes an analysis of the current operating
performance of Prints Plus, including the amounts of free cash flow being generated
providing for interest and debt service as well as their compliance with all the
performance standards included within the covenants of the Preferred Security and
revolving line of credit. Based on this review, no valuation allowance is deemed necessary
at July 19, 2003.

Income Tax Receivable

Included in Other Assets in the
accompanying consolidated balance sheets is a $2.3 million receivable representing refund
claims related to amended Federal income tax returns filed by the Company for earlier tax
years. In early April 2003, the Company received a written denial of the refund claims
from the Internal Revenue Service. After consultation with tax counsel, the Company
continues to believe in the merits of its claims and intends to pursue additional
remedies, including litigating the matter in court, in order to collect the amount of the
recorded claims. As of February 1, 2003, the amount was reclassified from current assets
to long-term assets as it is not likely that the matter will be resolved within one year
of the date of the current balance sheet.

Standby Letters of Credit

As of July 19, 2003, the Company had
outstanding standby letters of credit in the principal amount of $7.3 million primarily
used in conjunction with the Companys self insurance programs.

Litigation

The Company is a defendant in various
lawsuits arising in the ordinary course of business. It is the opinion of management that
the ultimate liability, if any, resulting from such lawsuits will not materially affect
the consolidated financial position or results of operations of the Company.

8

---

NOTE 3  RECENTLY
ISSUED ACCOUNTING STANDARDS

In April 2003, the Financial
Accounting Standards Board (FASB) issued Statement No. 149, Amendment of
Statement No. 133 on Derivative Instruments and Hedging Activities. This Statement
amends and clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under Statement 133.
This standard is primarily effective for transactions occurring after June 30, 2003. In
May 2003, the FASB issued Statement No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This Statement
affects the accounting for certain obligations that a reporting entity can or must settle
by issuing its own equity shares. It is effective for financial instruments entered into
or modified after May 31, 2003 and is otherwise effective at the beginning of the
Companys third quarter of fiscal 2003. The Company does not expect the adoption of
these standards to have a material effect on the Companys financial position,
results of operations or cash flows.

NOTE 4 
STOCKHOLDERS EQUITY

Dividend Payments

On June 3, 2003, the Company
announced that its Board of Directors approved a 14% increase in the annual dividend rate
paid on the Companys common stock from $.56 per share to $.64 per share effective
with the third quarter 2003 dividend payment.

Share Repurchase Program

On June 3, 2003, the Board of
Directors authorized the Company to repurchase up to 5% of its common shares on the open
market from time to time, depending on market conditions. As of July 19, 2003, the Company
has yet to repurchase any shares under the recently announced authorization.

NOTE 5  SUBSEQUENT
EVENT

On August 14, 2003, the Company
announced the execution of an amendment to its agreement with Sears eliminating the
existing exclusivity provision from that agreement. In return for the removal of the
exclusivity provision, the Company, upon certain conditions, has agreed to provide Sears
with certain commission adjustments (the Contingent Payments) through 2008,
the remaining term of the current agreement. The elimination of the exclusivity provision
frees the Company to explore growth opportunities previously precluded under the
exclusivity provisions of the agreement.

The Contingent Payments are triggered
only if the Company operates more than twenty-four non-Sears portrait studios and the
rate of growth in total contractual commissions paid to Sears by the Company under the
pre-existing agreement does not exceed Sears same-store revenue growth rate by
specified percentages, up to a maximum of 2%. If both of the above mentioned conditions
occur, the Contingent Payments are determined by a formula included in the amendment to
the agreement, however, in no event shall such payments exceed $2.5 million annually or
$7.5 million cumulatively over the remaining five-year term of the agreement.

9

---

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

Managements Discussion and
Analysis of Financial Condition and Results of Operations is designed to provide the
reader of the financial statements with a narrative on the Companys results of
operations, financial position and liquidity, significant accounting policies and critical
estimates, and the future impact of accounting standards that have been issued but are not
yet effective. Managements Discussion and Analysis is presented in the following
sections: General; Results of Operations; Liquidity, Capital Resources and Financial
Condition; and Accounting Pronouncements and Policies. It is useful to read
Managements Discussion and Analysis in conjunction with the consolidated financial
statements and related notes thereto contained elsewhere in this document.

GENERAL

CPI Corp.s (CPI or
the Company) fiscal year ends the first Saturday of February. Accordingly,
fiscal year 2002 ended February 1, 2003 and consisted of 52 weeks. Both the second fiscal
quarters of 2003 and 2002, which consisted of twelve weeks, and the first fiscal halves of
2003 and 2002, which consisted of twenty-four weeks, ended July 19, 2003 and July 20,
2002, respectively. Throughout Managements Discussion and Analysis of
Financial Condition and Results of Operations, reference to 2002 will mean the
fiscal year ended February 1, 2003 and reference to second quarter 2003 and second quarter
2002 or first half 2003 and first half 2002 will mean the second fiscal quarter or first
fiscal half of 2003 and 2002, respectively.

The Company operates 1,024
professional portrait studios as of July 19, 2003 throughout the United States, Canada and
Puerto Rico under license agreements with Sears, Roebuck and Co. (Sears). On
August 14, 2003, the Company announced the execution of an amendment to its agreement with
Sears eliminating the existing exclusivity provision from that agreement.  As more fully described in
Note 5 to the Interim Condensed Consolidated Financial Statements, in return for
the removal of the exclusivity provision, the Company, upon certain conditions, has agreed
to provide Sears with certain contingent commission adjustments through 2008, the remaining term of
the current agreement. The elimination of the exclusivity provision frees the Company to
explore growth opportunities previously precluded under the exclusivity provisions of the
agreement. The Company opened its first Mexican studio in Chihuahua, Mexico in late
February 2003. That studio is located in City Club, a wholesale club launched by Soriana,
owner of a leading Mexican chain of hypermarkets. During the second quarter of 2003, the
Company opened three additional studios in Mexico, one in a City Club location and two
studios in Soriana hypermarkets. The Company currently plans to open a minimum of eleven
additional studios by the end of its fiscal year. In the first quarter of 2003, the
Company also launched its mobile photography operations under the name Everyday
Expressions ® offering mobile photography services to childcare centers in four
metropolitan markets. By the end of the second quarter of 2003, the Company was offering
mobile photography services to childcare centers and youth sports associations in
twenty-seven markets throughout the United States. In addition, the Company operates
searsphotos.com, an on-line photofinishing service as well as a vehicle for the
Companys customers to archive, share portraits via email and order additional
portraits and other products.

10

---

RESULTS OF OPERATIONS

The following table sets forth
certain operating information for each period and should be viewed in conjunction with the
consolidated financial statements and notes included in Item 1 of this Form 10-Q.

|                                               | 12 Weeks Ended |  | 24 Weeks Ended |          
|---------------------------------------------- | -------------- |  | -------------- | ---------
|
|Studio sittings:                               |                |  |                |          
|Custom                                         |                |  |                | 582,860  
|Package                                        |                |  |                | 324,118  
|                                               |                |  |                |          
|                                               |                |  |                | 906,978  
|                                               |                |  |                |          
|Studio average sales     per customer sitting: |                |  |                |          
|Custom                                         |                |  |                | $   77.69
|Package                                        |                |  |                | $   47.18
|Overall                                        |                |  |                | $   66.78

12 weeks ended July 19, 2003 compared to 12 weeks ended July 20, 2002

Net sales were $61.1 million in the
second quarter of 2003 compared with $57.3 million in the second quarter of 2002.

| | Net
sales for the second quarter of 2003 increased $3.8 million or 7% to $61.1 million from
the $57.3 million reported in the second quarter of 2002. The increase in reported sales
in the second quarter is a result of the timing of Easter in 2003. As Easter was near the
end of the Companys first quarter of 2003, this resulted in the delivery of Easter
portraits to customers after the end of the Companys first quarter and, accordingly,
the deferral of the recognition of the related sales. This increased amount of deferred
revenue was recognized as revenue in the Companys 2003 second quarter as the related
portraits were delivered to customers.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
the second quarter of 2003, sittings were 907,000, a decrease of 2% from the 929,000
sittings generated in 2002. Excluding the positive impact of the late 2003 Easter on the
second quarter of 2003, sittings declined 4% versus the reported 2% decline. The average
sale per customer sitting in the second quarter of 2003 was $66.78 or 8% higher than the
$61.56 realized in the second quarter of 2002. The decrease in sittings is primarily
attributable to the continuing impact of increases in the number of competitors
locations and the effects of competitors with lower price package offers. The increase in
average sales per customer sitting resulted from:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The continuing strong sales performance related to the Companys March 2003
domestic-wide rollout of digitally enhanced products referred to as Portrait Creations ®.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The ongoing positive effect of the Companys decision made late in the second quarter
of 2002 to begin selling customer proof sheets which had previously been provided free of
charge as part of the custom offer.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The Companys continuing
success in converting more of its customers to the higher value custom offer.
| | - | ------------------------------------------------------------------------------------------------------

11

---

Costs and expenses were $62.3 million
for the 12 weeks ended July 19, 2003, an increase of $4.9 million from the $57.4 million
reported for the comparable prior year period.

| | Losses
from operations for the second quarter of 2003 were $1.2 million compared to a $104,000
loss recorded in the comparable quarter of the prior year. The increased level of
operating losses was attributable to a $6.3 million increase in selling, general and
administrative expenses only partially offset by the $3.8 million increase in reported
sales, a $327,000 decline in cost of sales, primarily resulting from reduced levels of
sittings, and a $1.0 million decline in depreciation expense. The increase in selling,
general and administrative expenses was primarily attributable to increases in studio
employment costs and advertising expenses of $1.0 million and $1.1 million, respectively,
as well as $1.2 million in costs associated with the commencement of the mobile
photography and Mexican studio operations and $1.0 million in expenses relating to costs
that were inventoried in the first quarter of 2003 and recognized as expenses in the
second quarter at the time the related portraits were delivered to the customers. An
additional $1.9 million increase in costs related to various other selling, general and
administrative expenses including studio supplies and maintenance, telephone expense,
employee insurance, pension expense and administrative salaries.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
increase in studio employment costs was largely attributable to annual wage rate increases
and increased hours to support the continuing strong sales of the Companys new
digitally enhanced Portrait Creations ® product introduced in the first quarter of 2003
coupled with additional coverage hours in certain higher volume studios. The increased
advertising expenses were planned accelerated timing changes and related to Hispanic
television, market research and creative development. Favorable advertising expense
comparisons to the prior year are expected in the second half of 2003 as the overall
advertising budget for 2003 is comparable to the total advertising spending in 2002. The
decrease in depreciation expense resulted from certain assets becoming fully depreciated
beginning in the second quarter of 2002.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest expense decreased $143,000
for the second quarter of 2003 to $715,000 from $858,000 recorded in the second quarter of
2002. The reduction in interest expense is primarily a result of a scheduled principal
payment made in June 2003 to reduce the outstanding balance of the Senior Notes. The
principal due on these notes at the end of the second quarter was $34.1 million down from
$42.7 million at the end of the second quarter of 2002.

Interest income was $564,000 in the
second quarter of 2003, as compared to $694,000 recorded in the second quarter of 2002.
The decrease in interest income is principally due to the impact of declining interest
rates earned on cash balances exceeding the increase resulting from larger average cash
balances during the second quarter of 2003.

Income tax benefit as a percentage of
income before taxes was 38.6% for the second quarter of 2003 and 41.3% for the comparable
period in 2002.

Net losses were $826,000 and $8,000
for the second quarter of 2003 and 2002, respectively. As noted above, despite higher
reported sales, the Companys results of operations for the second quarter of 2003
were negatively impacted by increased expenses incurred in anticipation of higher planned
sales levels and the continuing costs, in advance of meaningful sales, associated with the
Companys new ventures, mobile photography and Mexican studio operations.

12

---

24 weeks ended July 19, 2003 compared
to weeks ended July 20, 2002

Net sales were $117.3 million in the
first half of 2003 compared with $117.2 million in the first half of 2002.

| | Total
net sales for the first half of 2003 were $117.3 million, an increase of $100,000 from the
$117.2 million recorded in 2002, as an 8% increase in average sales per customer sitting
from $60.16 to $64.99 offset an 8% decrease in sittings from 1,943,000 to 1,793,000. The
decrease in sittings is primarily attributable to continuing impact of increases in the
number of competitors locations and the effects of competitors with lower price
package offers. The increase in average sales per customer sitting resulted from :
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The continuing strong sales performance related to the Companys March 2003
domestic-wide rollout of digitally enhanced products referred to as Portrait Creations ®.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The ongoing positive effect of the Companys decision made late in the second quarter
of 2002 to begin selling customer proof sheets which had previously been provided free of
charge as part of the custom offer.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The Companys continuing
success in converting more of its customers to the higher value custom offer.
| | - | ------------------------------------------------------------------------------------------------------

Costs and expenses were $122.7
million for the 24 weeks ended July 19, 2003, an increase of $4.8 million from the $117.9
million reported for the comparable prior year period.

| | Losses
from operations for the first half of 2003 were $5.3 million compared to a $708,000 loss
in the comparable first half of the prior year. The increased level of losses was
attributable to the $7.8 million increase in selling, general and administrative expenses
only partially offset by the $100,000 increase in reported sales, a $700,000 decline in
cost of sales, primarily resulting from reduced sitting levels, and a $2.3 million decline
in depreciation expense. The increase in selling, general and administrative expenses was
primarily attributable to increases in studio employment costs and the planned accelerated
timing of advertising expenses of $2.5 million and $2.0 million, respectively, as well as
$1.9 million in costs associated with the commencement of the mobile photography and
Mexican studio operations. An additional $1.2 million increase in costs related to various
other selling, general and administrative expenses including pension expense and
administrative salaries.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
increase in studio employment expenses was largely attributable to annual wage rate
increases and increased hours to support the studio-wide rollout of digitally enhanced
products in the first quarter of 2003 coupled with additional coverage hours in certain
higher volume studios. The increased advertising expenses were planned timing charges and
related to Easter television advertising and the introduction of digitally enhanced
products, Hispanic television, market research and creative development. Favorable
advertising expense comparisons to the prior year are expected in the second half of 2003
as the overall advertising budget for 2003 is comparable to the total advertising spending
in 2002. The decrease in depreciation expense resulted from certain assets becoming fully
depreciated beginning in the second quarter of 2002.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest expense decreased $286,000
for the first half of 2003 to $1.5 million from $1.8 million recorded in the first half of
2002. The reduction in interest expense is primarily a result of a scheduled principal
payment made in June 2003 to reduce the outstanding balance of the Senior Notes. The
principal due on these notes at the end of the first half was $34.1 million down from
$42.7 million at the end of the first half of 2002.

Interest income was $938,000 in the
first half of 2003, as compared to $1.1 million recorded in the first half of 2002. The
decrease in interest income is principally due to the impact of declining interest rates
earned on cash balances exceeding the increase resulting from larger average cash balances
during the first half of 2003.

Income tax benefit as a percentage of
income before taxes was 38.6% for the first half of 2003 and 39.7% for the comparable
period in 2002.

13

---

Net losses for the 24-week first half
ended July 19, 2003 of $3.6 million compared to a net loss of $722,000 for the comparable
first half in fiscal 2002. The reported net loss for the first half of 2003 was largely
attributable to reported sales being comparable to the prior year period while costs were
generally incurred at a level consistent with a higher planned level of sales which did
not materialize. In addition, costs comparisons to the prior year first half were
negatively impacted by costs, in advance of meaningful sales, approximating $2.0 million
incurred in connection with the commencement of the Companys new ventures in mobile
photography and Mexican studio operations in the first half of 2003.

LIQUIDITY, CAPITAL
RESOURCES AND FINANCIAL CONDITION

Analysis of Financial
Condition

As of July 19, 2003, the
Companys current assets exceeded current liabilities by $12.5 million.

Net cash provided by operating
activities in the first half of 2003 increased $4.9 million to $4.1 million from $858,000
used in operating activities in second quarter of 2002. The increase was primarily due to
the receipt of income tax refunds in the first half of 2003 and the payouts of
supplemental retirement plan benefits and deferred compensation for retired executives and
directors in the prior year. Offsetting the increases are additional losses from
operations in the first half of 2003 as compared to the first half of fiscal 2002, reduced
depreciation expense in the first half of 2003 and increases in outstanding receivables
resulting from a change in settlement methods with Sears in the second quarter of 2002.

Net cash used in financing activities
in the first half of 2003 increased $681,000 to $10.2 million from the $9.5 million used
in the first half of 2002. The increase resulted primarily from lower levels of common
stock issuance relating to option exercises in the first half of 2003.

Net cash used in investing activities
totaled $8.1 million in the first half of 2003 compared to $4.8 million in the first half
of 2002. The $3.3 million increase was due principally to higher capital expenditures and
the seasonal increases in the loan receivable due from Prints Plus partially offset by the
proceeds from a redemption of the preferred security by Prints Plus in the first quarter
of 2003 that was funded by a draw on the loan receivable.

Liquidity and Capital
Resources

Cash flows from operations and cash
and cash equivalents on hand represent the Companys expected source of funds in
fiscal year 2003 for planned capital expenditures of approximately $21.0 million,
scheduled principal payments on long-term debt of $8.6 million, normal business operations
and dividends to shareholders and potential share repurchases. With the exception of
standby letters of credit used to support the Companys self-insurance programs, the
Company does not use off-balance sheet arrangements to finance business activities.

On June 3, 2003, the Company
announced that its Board of Directors approved a 14% increase in the annual dividend rate
paid on the Companys common stock from $.56 per share to $.64 per share effective
with the next regularly scheduled quarterly dividend. In addition, the Board authorized
management to repurchase up to 5% of the Companys common shares on the open market
from time to time, depending on market conditions.

14

---

ACCOUNTING PRONOUNCEMENTS
AND POLICIES

Recently Issued
Accounting Standards

In April 2003, the FASB issued
Statement No. 149, Amendment of Statement No. 133 on Derivative Instruments and
Hedging Activities. This Statement amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other contracts, and for
hedging activities under Statement 133. This standard is primarily effective for
transactions occurring after June 30, 2003. In May 2003, the FASB issued Statement No.
150, Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity. This Statement affects the accounting for certain
obligations that a reporting entity can or must settle by issuing its own equity shares.
It is effective for financial instruments entered into or modified after May 31, 2003 and
is otherwise effective at the beginning of the Companys third quarter of fiscal
2003. The Company does not expect the adoption of these standards to have a material
effect on the Companys financial position, results of operations or cash flows.

Significant Accounting
Policies and Critical Estimates

The Companys significant
accounting policies are discussed in the Notes to the Consolidated Financial Statements
that are included in the Companys 2002 Annual Report on Form 10-K that is filed with
the Securities and Exchange Commission. In most cases, the accounting policies utilized by
the Company are the only ones permissible under U.S. Generally Accepted Accounting
Principles for businesses in our industry. However, the application of certain of these
policies requires significant judgments or a complex estimation process that can affect
the results of operations and financial position of the Company, as well as the related
footnote disclosures. The Company bases its estimates on historical experience and other
assumptions that it believes are reasonable. If actual amounts are ultimately different
from previous estimates, the revisions are included in the Companys results of
operations for the period in which the actual amounts become known. The accounting
policies and estimates that can have a significant impact on the operating results,
financial position and footnote disclosures of the Company are described in the Management
Discussion and Analysis of Financial Condition and Results of Operations in the
Companys 2002 Annual Report on Form 10-K.

Cautionary Statement
Regarding Forward-Looking Information

The statements contained in this
report, and in particular in the Managements Discussion and Analysis of
Financial Condition and Results of Operations section that are not historical facts
are forward-looking statements within the meaning of the Private Securities Litigation Act
of 1995, and involve risks and uncertainties. Management wishes to caution the reader that
these forward-looking statements, such as the Companys outlook for portrait studios,
future cash requirements, compliance with debt covenants, valuation allowances, and
capital expenditures, are only predictions or expectations; actual events or results may
differ materially as a result of risks facing the Company. Such risks include, but are not
limited to: customer demand for the Companys products and services, the overall
level of economic activity in the Companys major markets, competitors actions,
manufacturing interruptions, dependence on certain suppliers, changes in the
Companys relationship with Sears and the condition and strategic planning of Sears,
fluctuations in operating results, the condition of Prints Plus Inc., the attractions and
retention of qualified personnel and other risks as may be described in the Companys
filings with the Securities and Exchange Commission, including its Form 10-K for the year
ended February 1, 2003.

15

---

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risks relating to the
Companys operations result primarily from changes in interest rates and changes in
foreign exchange rates. The Companys debt obligations have primarily fixed interest
rates; therefore, the Companys exposure to changes in interest rates is minimal. The
Companys exposure to changes in foreign exchange rates relates to its Canadian and
Mexican operations and are also minimal, as these operations constitute 7.0% of the
Companys total assets and 6.7% of the Companys total sales.

Item 4. Disclosure
Controls and Procedures

An evaluation of the Companys
disclosure controls and procedures (as defined in Section 13(a)-14(c) of the Securities
Exchange Act of 1934 (the Act) was carried out under the supervision and with
the participation of the Companys Chief Executive Officer, Chief Financial Officer
and several other members of the Companys senior management as of the end of the
period reported. The Companys Chief Executive Officer and Chief Financial Officer
concluded that the Companys disclosure controls and procedures as currently in
effect are effective in ensuring that the information required to be disclosed by the
Company in the reports it files or submits under the Act is (i) accumulated and
communicated to the Companys management (including the Chief Executive Officer and
Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and
reported within the time periods specified in the SECs rules and forms.

In the quarter ended July 19, 2003,
the Company did not make any significant changes in, nor take any corrective actions
regarding, its internal controls or other factors that could significantly affect these
controls. In addition, since the date of this evaluation to the filing date of this
Quarterly Report, there have been no significant changes in the Companys internal
controls or in other factors that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and material weaknesses.

16

---

PART II. OTHER INFORMATION

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

The Annual Meeting of Shareholders was held in St. Louis, Missouri on Thursday, June 5, 2003. The following items were
voted on and the results are listed below.

| | 1. | The following individuals were elected to the Companys Board of Directors:
| | -- | ---------------------------------------------------------------------------

| | Name                                                                                                                                                                  |  | Shares 
  For                                                                                        |  | Shares
 Withheld                                              
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------
| | Edmond S. Abrain    
James R. Clifford   
Joanne S. Griffin   
Lee M. Liberman     
J. David Pierson    
Nicholas L.Reding   
Martin Sneider      
Virginia V. Weldon |  | 7,137,971  
 7,137,945  
 7,138,113  
 7,137,198  
 7,111,820  
 7,137,164  
 7,137,242  
 7,138,029 |  | 56,560
 56,586
 56,418
 57,333
 82,711
 57,367
 57,289
 56,502

| | 2. | The Board of Directors appointment of KPMG, LLP to audit the
               Companys financial statements for the 2003 fiscal year:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------

| | For       |  | Against |  | Abstain
| | --------- |  | ------- |  | -------
| | 7,168,744 |  | 17,400  |  | 8,387  

17

---

Item 6. Exhibits and Reports on Form 8-K

a.      Exhibits

An
Exhibit Index has been filed as part of this Report on Page E-1.

b.     
          Reports on Form 8-K.

| | On
May 5, 2003, CPI Corp. filed an 8-K Current Report on the issuance of a press release
dated May 5, 2003 announcing that it had extended the deadline for filing its Annual
Report on Form 10-K for its fiscal year ended February 1, 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
May 9, 2003, CPI Corp. filed an 8-K Current Report on the issuance of a press release
dated May 8, 2003 announcing the declaration of a second quarter cash dividend.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
May 20, 2003, CPI Corp. filed an 8-K Current Report on the issuance of a press release
dated May 16, 2003 announcing that it had filed amendments on prior year Form 10-K and
Form 10-Q filings and that it had filed its Form 10-K for 2002.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
June 5, 2003, CPI Corp. filed an 8-K Current Report on the issuance of a press release
dated June 3, 2003 announcing first quarter fiscal year 2003 results, a share repurchase
authorization and a dividend increase.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18

---

CPI CORP.

SIGNATURE

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

| |     | CPI Corp. (Registrant)                                                                                                  
| | --- | ------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                         
| | By: | /s/ Gary W. Douglass                                                                                                    
| |     | Gary W. Douglass
      Executive Vice President, Finance and Chief Financial Officer
      (Principal Financial Officer)

| |    
| | ---
| | By:
| |    

19

---

CPI CORP.

E-1EXHIBIT INDEX

|Exhibit No.                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|----------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.68 
 10.69 
  11.1 
       
  11.2 
       
  31.1 
  31.2 
  32.1 
  32.2 |  | $15 Million Revolving Credit Agreement with Commerce Bank
Seventh Amendment to Sears License Agreement
Computation of Per Share Earnings - Diluted - for the 12 and 24 weeks ended July 19, 2003
and July 20, 2002.
Computation of Per Share Earnings - Basic - for the 12 and 24 weeks ended July 19, 2003
and July 20, 2002.Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                    (18 U.S.C. 1350).
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                    (18 U.S.C. 1350).

20

---