<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-Q
(Mark One)

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

                  For the quarterly period ended June 30, 2000

                                       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 0-1349

                               Enesco Group, Inc.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Massachusetts                                  04-1864170
------------------------------------             ----------------------------
  (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                     Identification No.)

225 Windsor Drive, Itasca, Illinois                          60143
-------------------------------------------------------------------------------
(Address of principal executive offices)                   (Zip Code)

                                  630-875-5300
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                       N/A
-------------------------------------------------------------------------------
      (Former name, address and 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 [ ]
                                                           June 30,
                                                    2000             1999
                                                    ----             ----
Shares Outstanding:

Common Stock with                                13,577,032       13,821,359
 Associated Rights





<PAGE>   2

                         PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                               ENESCO GROUP, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                       JUNE 30, 2000 AND DECEMBER 31, 1999
                                   (UNAUDITED)
                                 (IN THOUSANDS)

                                                     JUNE 30,     DECEMBER 31,
                                                       2000          1999
                                                    ---------      ---------
ASSETS

CURRENT ASSETS:

Cash and certificates of deposit                    $   2,248      $  10,819

Accounts receivable, net                               74,079         81,553

Inventories                                            66,013         62,317

Prepaid expenses                                        3,757          3,763

Taxes on income                                        10,708         12,680
                                                    ---------      ---------
    Total current assets                              156,805        171,132
                                                    ---------      ---------

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment, at cost                 83,412         82,244
Less accumulated depreciation                          53,659         51,251
                                                    ---------      ---------
    Property, plant and equipment, net                 29,753         30,993
                                                    ---------      ---------

OTHER ASSETS:

Goodwill and other intangibles, net                    37,201         38,410
Other                                                   2,311         25,438
Deferred income taxes                                   3,258         11,394
                                                    ---------      ---------
    Total other assets                                 42,770         75,242
                                                    ---------      ---------

TOTAL ASSETS                                        $ 229,328      $ 277,367
                                                    =========      =========




The accompanying notes are an integral part of these condensed financial
statements.



<PAGE>   3


                               ENESCO GROUP, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                       JUNE 30, 2000 AND DECEMBER 31, 1999
                                   (UNAUDITED)
                                 (IN THOUSANDS)

                                                     JUNE 30,     DECEMBER 31,
                                                      2000           1999
                                                    ---------      ---------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Notes and loans payable                             $  27,927      $  28,178

Accounts payable                                       18,677         21,296

Taxes on income                                        31,549         43,196

Accrued expenses
    Payroll and commissions                             3,886          5,337
    Royalties                                           6,062          6,565
    Postretirement benefits                             3,455          4,740
    Other                                              17,382         19,386
                                                    ---------      ---------
    Total current liabilities                         108,938        128,698
                                                    ---------      ---------

LONG-TERM LIABILITIES:

Postretirement benefits                                 8,071         28,273
Deferred income taxes                                   5,005          5,964
                                                    ---------      ---------
    Total long-term liabilities                        13,076         34,237
                                                    ---------      ---------

SHAREHOLDERS' EQUITY:

Common stock                                            3,154          3,154

Capital in excess of par value                         48,348         48,754

Retained earnings                                     320,250        326,305

Accumulated other comprehensive income                 (4,643)        (2,843)
                                                    ---------      ---------
                                                      367,109        375,370
Less - shares held in treasury, at cost              (259,795)      (260,938)
                                                    ---------      ---------
    Total shareholders' equity                        107,314        114,432
                                                    ---------      ---------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $ 229,328      $ 277,367
                                                    =========      =========



The accompanying notes are an integral part of these condensed financial
statements.




<PAGE>   4


                               ENESCO GROUP, INC.
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)



                                                      2000           1999
                                                    ---------      ---------

Net revenues                                        $  71,739      $  94,933
Cost of sales                                          41,502         50,205
                                                    ---------      ---------

Gross profit                                           30,237         44,728
Selling, distribution, general and
  administrative expenses                              34,358         34,089
                                                    ---------      ---------

Operating profit (loss)                                (4,121)        10,639

Interest expense                                         (738)          (895)
Other income (expense), net                               798           (376)
                                                    ---------      ---------

Income (loss) before income taxes                      (4,061)         9,368

Income tax provision (benefit)                         (1,625)         3,748
                                                    ---------      ---------

Net income (loss)                                   $  (2,436)     $   5,620
                                                    =========      =========

Earnings (Loss) Per Common Share:
    Basic                                           $   (0.18)     $    0.39
                                                    =========      =========

    Diluted                                         $   (0.18)     $    0.39
                                                    =========      =========


The accompanying notes are an integral part of these condensed financial
statements.





<PAGE>   5


                               ENESCO GROUP, INC.
        CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)




                                                      2000            1999
                                                    ---------      ---------

Net revenues                                        $ 143,623      $ 188,858
Cost of sales                                          79,356         97,998
                                                    ---------      ---------

Gross profit                                           64,267         90,860
Selling, distribution, general and
  administrative expenses                              67,000         72,659
                                                    ---------      ---------

Operating profit (loss)                                (2,733)        18,201

Interest expense                                       (1,395)        (1,308)
Other income (expense), net                               341           (295)
                                                    ---------      ---------

Income (loss) before income taxes                      (3,787)        16,598

Income tax provision (benefit)                         (1,515)         6,640
                                                    ---------      ---------

Net income (loss)                                      (2,272)         9,958

Retained earnings, beginning of period                326,305        315,335
Cash dividends, $.28 per share in 2000 and
  $.56 per share in 1999                               (3,783)        (8,311)
                                                    ---------      ---------

Retained earnings, end of period                    $ 320,250      $ 316,982
                                                    =========      =========

Earnings (Loss) Per Common Share:
    Basic                                           $   (0.17)     $    0.67
                                                    =========      =========

    Diluted                                         $   (0.17)     $    0.66
                                                    =========      =========




The accompanying notes are an integral part of these condensed financial
statements.

<PAGE>   6


                               ENESCO GROUP, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (UNAUDITED)
                                 (IN THOUSANDS)

                                                      2000            1999
                                                    ---------      ---------

OPERATING ACTIVITIES:

Net income (loss)                                   $  (2,272)     $   9,958
Adjustments to reconcile net income (loss) to net
    cash provided by operating activities                (225)        (1,031)
                                                    ---------      ---------

    Net cash provided (used) by operating activities   (2,497)         8,927
                                                    ---------      ---------

INVESTING ACTIVITIES:

Purchase of property, plant & equipment                (2,419)        (2,123)
Proceeds from sales of property, plant & equipment         75          2,030
                                                    ---------      ---------

    Net cash used by investing activities              (2,344)           (93)
                                                    ---------      ---------

FINANCING ACTIVITIES:

Cash dividends                                         (3,783)        (8,311)
Exchanges and purchases of common stock                     -        (41,268)
Notes and loans payable                                  (251)        33,809
Other common stock issuance                               737            449
                                                    ---------      ---------

    Net cash used by financing activities              (3,297)       (15,321)
                                                    ---------      ---------

Effect of exchange rate changes on cash and
  cash equivalents                                       (433)          (321)
                                                    ---------      ---------

Decrease in cash and cash equivalents                  (8,571)        (6,808)

Cash and cash equivalents, beginning of year           10,819         17,905
                                                    ---------      ---------

Cash and cash equivalents, end of quarter           $   2,248      $  11,097
                                                    =========      =========



The accompanying notes are an integral part of these condensed financial
statements.



<PAGE>   7




                               ENESCO GROUP, INC.


              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


         The consolidated condensed financial statements and related notes
included herein have been prepared by the Company, without audit except for the
December 31, 1999 condensed balance sheet, which was derived from the Company's
Annual Report on Form 10-K for the year ended December 31, 1999, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. The information furnished reflects all normal
recurring adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods. Certain reclassifications
have been made in 1999 financial statements to conform to the 2000 presentation.
It is suggested that these condensed financial statements be read in conjunction
with the financial statements and related notes to consolidated financial
statements included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999.

1.       ACCOUNTING POLICIES:

         The Company's financial statements for the three and six months ended
June 30, 2000 have been prepared in accordance with the accounting policies
described in Note 1 to the December 31, 1999 consolidated financial statements
included in the Company's 1999 Annual Report on Form 10-K. The Company considers
all highly liquid securities, including certificates of deposit with maturities
of three months or less, when purchased, to be cash equivalents. Accounts
receivable are stated net of reserves for uncollectible accounts, returns and
allowances of $9.5 million at June 30, 2000 and $10.4 million at December 31,
1999.


<PAGE>   8


The Company recognizes revenue as merchandise is turned over to the shipper and
a provision for anticipated merchandise returns and allowances is recorded based
upon historical experience. Amounts billed to customers for shipping and
handling orders and collector club subscriptions are netted against the
associated costs. License and royalty fees received by the Company are
recognized as revenue.

         The Company paid cash for interest and taxes as follows (in thousands):

                                                       Six Months Ended
                                                            June 30
                                                            -------
                                                       2000          1999
                                                    ---------      ---------

         Interest                                   $   1,498      $     985
         Income taxes                               $   1,278      $   1,294


2.       COMPREHENSIVE INCOME:

         The other comprehensive income consists only of cumulative translation
adjustments. Comprehensive income (loss) for the three and six months ended June
30, 2000 and 1999 was as follows (in thousands):

                                        Three Months Ended   Six Months Ended
                                              June 30             June 30
                                              -------             -------
                                          2000     1999       2000      1999
                                        -------   ------    -------   -------
Net income (loss)                       $(2,436)  $5,620    $(2,272)  $ 9,958
Other comprehensive income:
    Cumulative translation adjustments
      (no tax effects)                   (1,297)    (348)    (1,800)   (1,202)
                                        ----------------    -----------------
Comprehensive income                    $(3,733)  $5,272    $(4,072)  $ 8,756
                                        ================    =================



<PAGE>   9



3.       GEOGRAPHIC OPERATING SEGMENTS:
         The Company operates in one industry segment, predominately in two
major geographic areas (United States and International). The following tables
summarize the Company's operations by geographic area for the three and six
months ended June 30, 2000 and 1999 (in thousands):



                              Three Months Ended        Six Months Ended
                                     June 30                  June 30
                                     -------                  -------
                                2000        1999          2000       1999
                              -------     -------      --------    --------
NET REVENUES:
United States                 $52,425     $75,562      $107,476    $150,162
United States intercompany       (488)       (893)       (1,073)     (1,742)
International                  20,067      21,184        37,942      42,280
International intercompany       (265)       (920)         (722)     (1,842)
                              -------------------      --------------------
Total consolidated            $71,739     $94,933      $143,623    $188,858
                              ===================      ====================

OPERATING PROFIT (LOSS):
United States                 $(5,166)    $ 9,248      $ (4,888)   $ 15,440
International                   1,045       1,391         2,155       2,761
                              -------------------      --------------------
Total consolidated            $(4,121)    $10,639      $ (2,733)   $ 18,201
                              ===================      ====================

         Transfers between geographic areas are made at the market value of the
merchandise transferred. No single customer accounted for 10% or more of
consolidated net sales. Export sales to foreign unaffiliated customers represent
less than 10% of consolidated net sales.

         There were no material changes in assets from the amount disclosed in
the Company's December 31, 1999 Annual Report and the basis of geographic area
measurement of sales and operating profit did not change in 2000.







<PAGE>   10



4.       INVENTORY CLASSES:

         The major classes of inventories at June 30, 2000 and December 31, 1999
were as follows (in thousands):

                                                       June 30,   December 31,
                                                         2000        1999
                                                       --------    --------
Raw materials and supplies                             $    754    $    736
Work in progress                                            135          94
Finished goods in transit                                11,843      13,221
Finished goods                                           53,281      48,266
                                                       --------    --------
                                                       $ 66,013    $ 62,317
                                                       ========    ========

5.       OTHER INCOME (EXPENSE), NET:

         Other income (expense), net for the three and six months ended June 30,
2000 and 1999 consists of the following (in thousands):

                                   Three Months Ended     Six Months Ended
                                        June 30              June 30
                                        -------              -------
                                  2000        1999       2000        1999
                                 -----      ------     --------    --------
Interest income                  $ 812      $  117     $    964    $    264
Amortization of other assets      (534)       (512)      (1,069)     (1,027)
Other, net                         520          19          446         468
                                 -----------------     --------------------
                                 $ 798      $ (376)    $    341    $   (295)
                                 ==================    ====================



<PAGE>   11


6.       EARNINGS PER COMMON SHARE (BASIS OF CALCULATIONS):

         Basic earnings per common share are based on the average number of
common shares outstanding during the period covered. Diluted earnings per common
share assumes, in addition to the above, a dilutive effect of common share
equivalents during the period. Common share equivalents represent dilutive stock
options using the treasury stock method.

         The number of shares used in the earnings per share calculations for
the three and six months ended June 30, 2000 and 1999 were as follows (in
thousands):

                                         Three Months Ended    Six Months Ended
                                               June 30             June 30
                                               -------             -------
                                           2000      1999       2000      1999
                                          ------    ------     ------    ------
Basic
     Average common shares outstanding    13,559    14,312     13,533    14,972

Diluted
     Stock options                             -        91          -        52
                                          ----------------    -----------------

Average shares diluted                    13,559    14,403     13,533    15,024
                                          ================     ================

         The lower average number of shares outstanding for 2000
primarily resulted from the repurchase of shares as part of the Company's 1999
repurchase program.

7.       FINANCIAL INSTRUMENTS:

         The Company operates globally with various manufacturing and
distribution facilities and product sourcing locations around the world. The
Company may reduce its exposure to fluctuations in foreign interest rates and
exchange rates by creating offsetting positions through the use of derivative
financial instruments. The Company currently does not use derivative financial
instruments for trading or speculative purposes.

         The notional amount of forward exchange contracts and options is the
amount of foreign currency bought or sold at maturity. The notional amount of
interest rate swaps is the underlying principal amount used in determining the
interest payments exchanged over the life of the swap. The notional amounts are
not a direct measure of the Company's exposure through its use of derivatives.




<PAGE>   12

         The Company periodically uses interest rate swaps to hedge portions of
interest payable on debt. In addition, the Company may periodically employ
interest rate caps to reduce exposure, if any, to increases in variable interest
rates.

         The Company may periodically hedge foreign currency royalties, net
investments in foreign subsidiaries, firm purchase commitments, contractual
foreign currency cash flows or obligations, including third party and
inter-company foreign currency transactions. The Company regularly monitors its
foreign currency exposures and ensures that hedge contract amounts do not exceed
the amounts of the underlying exposures.

         The Company enters into various short-term foreign exchange agreements
during the year. The purpose of the Company's foreign currency hedging
activities is to protect the Company from risk that the eventual settlement of
foreign currency transactions will be adversely affected by changes in exchange
rates. The Company's various subsidiaries import products in foreign currencies
and from time to time will enter into agreements or build foreign currency
deposits as a partial hedge against currency fluctuations on inventory
purchases. Gains and losses on these agreements are deferred and recorded as a
component of cost of sales when the related inventory is sold. At June 30, 2000,
deferred amounts were not material. The Company makes short-term foreign
currency intercompany loans to various international subsidiaries and utilizes
agreements to fully hedge these transactions against currency fluctuations. The
cost of these agreements is included in the interest charged to the subsidiaries
and expensed monthly as the interest is accrued. The intercompany interest
eliminates upon consolidation and any gains and losses on the agreements are
recorded as a component of other income. The Company receives dividends,
royalties and other payments from its subsidiaries and licensees. From time to
time, the Company will enter into foreign currency forward agreements as a
partial hedge against currency fluctuations on these current receivables. Gains
and losses are recognized or the credit or debit offsets the foreign currency
payables. As of June 30, 2000, net deferred amounts on outstanding agreements
were not material. The outstanding agreement amounts (notional value) at June
30, 2000, are $11.5 million.



<PAGE>   13


         In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities." The Statement establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and requires
that a company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. Management does not believe that
SFAS No. 133, when adopted by the Company on January 1, 2001 will have a
material impact on the consolidated financial condition or results of operations
of the Company.

8.       TERMINATION OF PRECIOUS MOMENTS ACQUISITION:

         The Company entered into an agreement on April 19, 2000 to purchase
certain assets of Precious Moments, Inc. and the Precious Moments Company for
$125 million in cash plus other considerations ranging up to 40% of cash
purchase price. This transaction was expected to close no later than June 30,
2000. On June 28, 2000 the Company announced that it would not proceed with the
purchase of certain assets of Precious Moments, Inc. and the Precious Moments
Company.

         The cost to terminate the agreement of $5.1 million was recorded in the
second quarter. Precious Moments product that was to be used as part of the
consideration for the agreement to purchase certain assets of Precious Moments,
Inc. was written down by $2.9 million. The inventory was written down to reflect
market conditions and to preserve collectibility of continuing product lines.
The majority of the product will be destroyed. In addition, there was $2.2
million of expenses related to the proposed acquisition which were incurred
primarily in the second quarter and included a break-up fee.



<PAGE>   14


9.       TIME WARNER WARRANT

         On June 28, 2000, Enesco entered into a licensing agreement with Time
Warner Entertainment Company, LP. Pursuant to this agreement, Enesco issued Time
Warner a warrant to purchase 200,000 shares of Enesco's common stock at an
exercise price of $4.375 per share. This warrant expires June 27, 2005 subject
to certain extensions. The warrant's fair value of $581,800 was determined using
the Black-Scholes pricing model, assuming an expected life of five years, a
dividend yield of 0%, a risk-free interest rate of 6.789% and a volatility
factor of 64.0%.

         The fair value of the warrant will be amortized as a component of
royalty expense when the related properties are introduced over the period the
related revenues are recognized.


<PAGE>   15


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

                               ENESCO GROUP, INC.
                    THREE AND SIX MONTHS ENDED JUNE 30, 2000

         The information set forth below should be read in conjunction with the
unaudited consolidated condensed financial statements and notes thereto included
in Part I - Item 1 of the Quarterly Report and the Company's Annual Report on
Form 10-K for the year ended December 31, 1999 which contains the audited
financial statements and notes thereto for the years ended December 31, 1999,
1998, and 1997 and Management's Discussion and Analysis of Financial Condition
and Results of Operations for those respective periods.

         Forward-looking statements, in this Quarterly Report on Form 10-Q as
well as in the Company's Annual Report on Form 10-K for the year ended December
31, 1999, are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Readers are cautioned that all
forward-looking statements pertaining to the Company involve risks and
uncertainties, including, without limitation, risks detailed from time to time
in the Company's periodic reports and other information filed with the
Securities and Exchange Commission.

RESULTS OF OPERATION:

         Net revenues in the second quarter and first six months of 2000
decreased 24% compared to the same periods in 1999. The majority of the decline
in revenues for both periods continued to be focused in the United States card,
gift and collectible channels due in part to starting the year 2000 with
unfilled orders down approximately $9 million compared to 1999 and to first six
months 2000 net new orders down 27% compared to 1999. Approximately $5.7 million
of the United States sales decrease in the second quarter this year was
attributed to a shift in sales to the third quarter as a result of the Company's
new product delivery schedule. This new product delivery system, previously
announced, is designed to improve customer service and to reduce the Company's
working capital requirements.



<PAGE>   16

         On August 1, 2000, the Company introduced a new retailer initiative in
the United States called Partners in Profit program, primarily for the card,
gift and collectible channels. In addition to improving the way the Company does
business with retailers, the new program greatly simplifies the type of account
structure and allows all accounts to consistently participate in profit programs
based on performance.

         Year to date 2000 international sales decreased 8% versus 1999 and
represented approximately 26% of total year to date 2000 sales compared to 21%
in 1999. Net local currency international sales were translated into United
States dollars at lower exchange rates in 2000 versus 1999. If the net year to
date 2000 local currency sales were translated into United States dollars at the
1999 exchange rates, sales would have been approximately $1 million higher in
2000.

         The Precious Moments line represented 43% of 2000 year to date sales
compared to 40% in 1999. The Cherished Teddies line represented 16% of 2000 year
to date sales compared to 22% in 1999. As of June 30, 2000, compared to the same
period last year, members of the Precious Moments Collector Clubs were down
approximately 8% and the members of the Cherished Teddies Collector Clubs were
down approximately 12%.

         Total Company unfilled orders as of June 30, 2000 were down
approximately $18 million, or 17%, compared to the same period last year. Net
orders entered are orders received and approved by the Company, subject to
cancellation for various reasons, including credit considerations, inventory
shortages and customer requests.

         Gross profit in 2000 decreased for the second quarter and first six
months following the sales decrease and due to a $2.9 million inventory
write-down related to Precious Moments product that was to be used as part of
the consideration for the agreement to purchase certain assets of Precious
Moments, Inc. The proposed acquisition was terminated and the inventory was
written down to reflect market conditions and to preserve collectibility of
continuing product lines. The majority of the product will be destroyed.
Excluding the $2.9 million inventory write-down, the Company's 2000 gross profit
margin, expressed as a percentage of net revenues, was 46% and 47% for the
second quarter and six months respectively, compared to the 1999 gross profit
margins of 47% and 48%. The differences in margins are due to channel and
product sales mix, as all product lines and channels do not have the same gross
profit margins.




<PAGE>   17

         Selling, distribution, general and administrative expenses for the
second quarter 2000 included one time items of $2.2 million of costs related to
the termination of the Precious Moments acquisition; $2.8 million of severance
cost for a Chief Executive Officer and a $2.7 million settlement gain resulting
from the termination of supplemental retirement plans. Excluding the one time
items, 2000 selling, distribution, general and administrative expenses, which
are largely fixed, expressed as a percentage of net revenues were 45% for the
second quarter and six months, compared to 36% for the second quarter and 38%
for the six month in 1999. The 2000 expenses were a higher percentage of net
revenues principally due to the impact of lower sales on fixed costs. The 2000
reductions in expenses, in dollars, were from lower variable expenses following
the sales decrease and reduction in fixed costs.

         Due to factors described above, the Company in 2000 recorded an
operating loss for the second quarter and six months compared to operating
profit for both periods in 1999.

INTERNATIONAL ECONOMIES AND CURRENCY:

         The value of the U.S. dollar versus international currencies where the
Company conducts business impacts the results of these businesses. Fluctuations
in the value of the U.S. dollar versus international currencies affect the U.S.
dollar translation value of international currency denominated balance sheet
items. The changes in the balance sheet dollar values due to international
currency translation fluctuations are recorded as a component of shareholders'
equity. In addition to the currency risks, the Company's international
operations, including sources of imported products, are subject to the risks of
doing business abroad, including reliance on third party overseas manufacturers,
import or export restrictions and changes in economic and political climates.
The fluctuations in net sales and operating profit margins from quarter to
quarter are partially due to the seasonal characteristics of the Company's
business.

         INTEREST EXPENSE decreased in the second quarter this year versus 1999
due to lower borrowings, partially off-set by higher rates. Interest expense for
the first six months was higher than 1999, principally from starting the year
with higher borrowings versus 1999 and to higher prevailing interest rates.



<PAGE>   18


         OTHER INCOME, net in the second quarter this year benefited from
interest income of $675 thousand and other income of $625 thousand related to
the expiration of a warranty term related to transactions from prior years for
funds held in an escrow account. Other income, net in 1999 benefited from a net
gain on the sale of assets in the first quarter of approximately $350 thousand.

         THE PROVISION (BENEFIT) FOR INCOME TAXES was 40% for all periods. The
actual effective tax rates are dependent upon numerous factors and actual
results may vary.

FINANCIAL CONDITION:

         The Company has historically satisfied its capital requirements with
internally generated funds and short-term loans. Working capital requirements
fluctuate during the year and are generally greatest during the third quarter
and lowest at the beginning of the first quarter.

         The major sources of funds in the first six months of 2000 from
operating activities were from depreciation, amortization, lower accounts
receivable due to lower sales and a reduction in long term other assets. Long
term other assets decreased by $4.3 million from the release of an escrow
account related to the expiration of a warranty term related to transactions
from prior years. Also, long term other assets decreased by $18.7 million and
long term liabilities decreased by $19.6 million, due to the lump sum pay-out of
various non-qualified supplemental retirement plans from a grantor trust and the
settlement gain on the terminations of $2.7 million. Deferred income tax assets
decreased due to these pay-outs and current taxes payable correspondingly
decreased.

         The major uses of funds from operating activities in the first six
months were higher inventories (seasonal requirements) and lower accrued
expenses (following the lower sales volumes and due to the timing of payments)
and net lower taxes payable on income resulting from the before tax loss this
year. Additionally, 2000 payables decreased versus June 1999 and year-end 1999
since the Company did not declare a second quarter dividend.




<PAGE>   19


         The Company has filed and continues to file tax returns with a number
of taxing authorities worldwide. While the Company believes such filings have
been and are in compliance with applicable laws, regulations and
interpretations, positions taken are subject to challenge by the taxing
authorities often for an extended number of years after the filing dates. The
Company has established accruals for tax assessments. These accruals are
included in current income taxes payable since it is uncertain as to when
assessments may be made and paid. Based upon the Company's current liquid asset
position and credit facilities, the Company believes it has adequate resources
to fund any such assessments. To the extent accruals differ from actual
assessments or when the open tax years are closed, the accruals will be adjusted
through the provision for income taxes. The majority of the open tax years
become closed at the end of December for the particular open year.

         The major use of cash in investing activities in the first six months
of 2000 was for capital expenditures. Annual capital expenditure commitments of
$6 million are forecasted for 2000. The 1999 proceeds from the sales of
property, plant and equipment primarily represented the sale of the Company's
former Westfield, MA corporate headquarters.

         The major uses of cash in financing activities in the first six months
of 2000 were for dividends to shareholders. The Company did not declare a second
quarter 2000 dividend due to anticipated financing covenants related to the now
terminated Precious Moments acquisition. Any future dividends and resumption of
the Company's stock repurchase program will depend on improved future financial
results. The principal sources of the Company's liquidity are its available cash
balances, cash from operations and available financing alternatives.

         In August 2000, the Company entered into an unsecured $50 million
revolving credit facility to replace an expiring revolving credit facility. The
credit agreement contains financial and operating covenants, including
restrictions on incurring indebtedness and liens, selling property, repurchasing
the Company's shares and paying dividends. In addition, the Company is required
to satisfy consolidated net worth, fixed charge coverage ratio and leverage
ratio tests, in each case at the end of each fiscal quarter.


<PAGE>   20


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Information required by this item either is set forth in Exhibit 13 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1999 as
updated by Note 7 to the Consolidated Condensed Financial Statements included in
Item 1 herein, or is immaterial.




<PAGE>   21


                           PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


   (a)   Exhibits

    4    Warrant Agreement with Warner Bros. Consumer Products for 200,000
         shares of Common Stock issued on June 28, 2000.

   10    Notice of Intent to Terminate dated July 12, 2000 of Allan G.
         Keirstead under Relocation Agreement.

   27    Financial Data Schedule for the Six Months Ended June 30, 2000.

   (b)   Reports on Form 8-K

         No reports on Form 8-K were filed by the Company during the
         Quarter for which this report is filed.

All other items hereunder are omitted because either such item is inapplicable
or the response to it is negative.




<PAGE>   22



                                   Signatures

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



                                 ENESCO GROUP, INC.
                                 (Registrant)



Date:  August 14, 2000           /s/ John F. Cauley
                                 ------------------------------------------
                                 John F. Cauley
                                 Interim Chief Executive Officer





Date:  August 14, 2000           /s/ Allan G. Keirstead
                                 ------------------------------------------
                                 Allan G. Keirstead
                                 Chief Administrative and Financial Officer




<PAGE>   23


                                  EXHIBIT INDEX


Reg.  S-K
Item 601          Exhibit                                     10-Q Page No.
---------         -------                                     ------------

4                 Warrant Agreement with Warner Bros.              ___
                  Consumer Products for 200,000 shares
                  Common Stock issued on June 29, 2000

10                Notice of Intent to Terminate dated              ___
                  July 12, 2000 of Allan G. Keirstead
                  under Relocation Agreement

27                Financial Data Schedule for the                  ___
                  Six Months Ended June 30, 2000