<PAGE>
                       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, 2003

                                       OR

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

                 For the transition period from _____ to _____ .

                          Commission File Number 0-1349

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

             Illinois                                         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 [ ]


<Table>
<Caption>
                                                                 June 30,
                                                          2003               2002
                                                     ---------------   ---------------
<S>                                                  <C>               <C>
Shares Outstanding:

Common Stock with
 Associated Rights                                        14,046,256        13,869,107
</Table>




<PAGE>



                          PART 1. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

                               ENESCO GROUP, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                       JUNE 30, 2003 AND DECEMBER 31, 2002
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                      (UNAUDITED)
                                                        JUNE 30,        DECEMBER 31,
                                                          2003              2002
                                                     --------------    --------------
<S>                                                  <C>               <C>
ASSETS

Current Assets:

Cash and cash equivalents                            $        7,571    $       17,418

Accounts receivable, net                                     63,899            54,347

Inventories                                                  50,468            48,334

Prepaid expenses                                              2,282             2,491

Deferred income taxes and taxes receivable                    6,372             7,586
                                                     --------------    --------------

    Total current assets                                    130,592           130,176
                                                     --------------    --------------

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment                                81,417            72,920

Less - accumulated depreciation                             (54,016)          (46,691)
                                                     --------------    --------------

    Property, plant and equipment, net                       27,401            26,229
                                                     --------------    --------------

OTHER ASSETS:

Goodwill                                                      2,730                --

Other                                                         1,282             1,171

Deferred income taxes                                        22,223            22,209
                                                     --------------    --------------

Total other assets                                           26,235            23,380
                                                     --------------    --------------

TOTAL ASSETS                                         $      184,228    $      179,785
                                                     --------------    --------------
</Table>




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



                                       2
<PAGE>



                               ENESCO GROUP, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                       JUNE 30, 2003 AND DECEMBER 31, 2002
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                       (UNAUDITED)
                                                         JUNE 30,        DECEMBER 31,
                                                           2003              2002
                                                     ---------------    ---------------
<S>                                                  <C>                <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Notes and loans payable                              $         1,051    $            --

Accounts payable                                              23,352             18,395

Federal, state and foreign income taxes                       13,003             15,416

Accrued expenses:
    Payroll and commissions                                    3,387              4,412
    Royalties                                                  5,893              7,911
    Post-retirement benefits                                   1,738              2,320
    Other                                                      6,680              5,623
                                                     ---------------    ---------------

    Total current liabilities                                 55,104             54,077
                                                     ---------------    ---------------

LONG-TERM LIABILITIES:

Notes Payable                                                     76                 --

Deferred income taxes                                            678                703

Post-retirement benefits                                       2,834              3,092
                                                     ---------------    ---------------

    Total long-term liabilities                                3,588              3,795
                                                     ---------------    ---------------

Minority interest                                                114                 --

SHAREHOLDERS' EQUITY:

Common stock                                                   3,154              3,154

Capital in excess of par value                                46,513             47,148

Retained earnings                                            329,751            330,368

Accumulated other comprehensive income (loss)                    506             (2,712)
                                                     ---------------    ---------------
                                                             379,924            377,958
Less - shares held in treasury, at cost                     (254,502)          (256,045)
                                                     ---------------    ---------------

    Total shareholders' equity                               125,422            121,913
                                                     ---------------    ---------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $       184,228    $       179,785
                                                     ---------------    ---------------
</Table>


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




                                       3
<PAGE>




                               ENESCO GROUP, INC.
      CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                    THREE MONTHS ENDED JUNE 30, 2003 AND 2002
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)




<Table>
<Caption>
                                                                    2003             2002
                                                               -------------    -------------
<S>                                                            <C>              <C>
Net revenues                                                   $      60,886    $      66,489
Cost of sales                                                         33,277           40,006
                                                               -------------    -------------

Gross profit                                                          27,609           26,483

Selling, distribution, general and administrative expenses            23,590           22,808
                                                               -------------    -------------

Operating profit                                                       4,019            3,675

Interest expense                                                        (495)            (179)
Interest income                                                          236               51
Other income (expense), net                                             (229)            (437)
                                                               -------------    -------------

Income before income taxes                                             3,531            3,110

Income tax expense                                                     1,357            1,313
                                                               -------------    -------------

Net income                                                             2,174            1,797

Retained earnings, beginning of period                         $     327,577    $     337,319
                                                               -------------    -------------

Retained earnings, end of period                               $     329,751    $     339,116
                                                               -------------    -------------

Earnings per common share:

   Basic and diluted                                           $        0.15    $        0.13
                                                               -------------    -------------
</Table>



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




                                       4
<PAGE>




                               ENESCO GROUP, INC.
      CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                     SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<Table>
<Caption>
                                                                    2003            2002
                                                               -------------    -------------
<S>                                                            <C>              <C>
Net revenues                                                   $     107,023    $     121,366
Cost of sales                                                         60,904           70,697
                                                               -------------    -------------

Gross profit                                                          46,119           50,669

Selling, distribution, general and administrative expenses            46,611           49,206
                                                               -------------    -------------

Operating profit (loss)                                                 (492)           1,463

Interest expense                                                        (544)            (302)
Interest income                                                          406              149
Other income (expense), net                                             (635)            (748)
                                                               -------------    -------------

Income (loss) before income taxes                                     (1,265)             562

Income tax expense (benefit)                                            (648)             172
                                                               -------------    -------------

Income (loss) before cumulative effect
of a change in accounting principle                                     (617)             390

Cumulative effect of a change in
accounting principle, net of income taxes                                 --          (29,031)

                                                               -------------    -------------
Net loss                                                                (617)         (28,641)

Retained earnings, beginning of period                               330,368          338,726
                                                               -------------    -------------

Retained earnings, end of period                               $     329,751    $     310,085
                                                               -------------    -------------


Earnings (loss) per common share - basic and diluted:

Income (loss) before cumulative effect
of a change in accounting principle                            $       (0.04)   $        0.03
                                                               -------------    -------------

Cumulative effect of a change in accounting
principle, net of income taxes                                 $          --    $       (2.10)
                                                               -------------    -------------

Net loss                                                       $       (0.04)   $       (2.07)
                                                               -------------    -------------
</Table>




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



                                       5
<PAGE>



                               ENESCO GROUP, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                              2003             2002
                                                                         -------------    -------------
<S>                                                                      <C>              <C>
OPERATING ACTIVITIES:

Net loss                                                                 $        (617)   $     (28,641)
Cumulative effect of a change in accounting
   principle, net of income taxes                                                   --           29,031
   Adjustments to reconcile net loss to net
       cash used by operating activities                                        (4,939)         (15,444)
                                                                         -------------    -------------

      Net cash used by operating activities                                     (5,556)         (15,054)
                                                                         -------------    -------------

INVESTING ACTIVITIES:

Purchases of property, plant and equipment                                      (2,608)          (1,387)
Acquisition of Bilston & Battersea                                              (3,718)              --
Proceeds from sales of property, plant and equipment                                 9               27
                                                                         -------------    -------------

    Net cash used by investing activities                                       (6,317)          (1,360)
                                                                         -------------    -------------

FINANCING ACTIVITIES:

Net issuance of notes and loans payable                                            867           10,433
Proceeds from the issuance of common stock                                         909              629
                                                                         -------------    -------------

    Net cash provided by financing activities                                    1,776           11,062
                                                                         -------------    -------------

Effect of exchange rate changes on cash and cash equivalents                       250              338
                                                                         -------------    -------------

Decrease in cash and cash equivalents                                           (9,847)          (5,014)

Cash and cash equivalents, beginning of period                                  17,418            7,932
                                                                         -------------    -------------

Cash and cash equivalents, end of period                                 $       7,571    $       2,918
                                                                         -------------    -------------
</Table>



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



                                       6
<PAGE>



                               ENESCO GROUP, INC.

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

A global leader in the gift, collectibles and home decor industry for 45 years,
Enesco Group, Inc. (the "Company" or "Enesco") offers such notable product lines
as Cherished Teddies, Disney, Mary Engelbreit, Border Fine Arts, Lilliput Lane,
Heartwood Creek by Jim Shore and NICI, among others. The Company's award winning
Precious Moments figurine collection is one of the top collectible lines
throughout the world. Enesco distributes product worldwide and has wholly owned
subsidiaries located in Hong Kong, Canada, France and the U.K.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying financial data as of June 30, 2003 and for the three and six
months ended June 30, 2003 and June 30, 2002 has been prepared by Enesco,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"). Certain information and disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations. These Consolidated
Condensed Financial Statements should be read in conjunction with the
Consolidated Financial Statements and the notes thereto included in Enesco's
Annual Report on Form 10-K for the year ended December 31, 2002.

In the opinion of management, these Consolidated Condensed Financial Statements
have been prepared in conformity with accounting principles generally accepted
in the United States of America applicable to interim period financial
statements and reflect all adjustments necessary for a fair presentation of
Enesco's financial position as of June 30, 2003, results of operations for the
three and six months ended June 30, 2003 and June 30, 2002, and cash flows for
the six months ended June 30, 2003 and June 30, 2002. The results of operations
for interim periods are not necessarily indicative of the operating results for
full fiscal years or any future period. The information in this report reflects
all normal recurring adjustments and disclosures that are, in our opinion,
necessary to fairly present the results of operations and financial condition
for the interim periods.



                                       7
<PAGE>



REVENUE RECOGNITION

Enesco recognizes revenue when title passes to its customers, which generally
occurs when merchandise is turned over to the shipper. A provision for
anticipated merchandise returns and allowances is recorded based upon historical
experience when a sale is recorded. Amounts billed to customers for shipping and
handling are included in revenue. License and royalty fees received by Enesco
are recognized as revenue when earned.

COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share is computed using the weighted-average
number of common shares outstanding during the period. Diluted earnings per
share is computed using the weighted-average number of common shares and
potential dilutive common shares outstanding during the period. Diluted loss per
share is computed using the weighted-average number of common shares and
excludes dilutive potential common shares outstanding, as their effect is
antidilutive. Potential dilutive common share equivalents consist of employee
stock options and warrants calculated using the treasury stock method.

PAYMENTS FOR INTEREST AND INCOME TAXES

Enesco made cash payments for interest and income taxes as follows (in
thousands):

<Table>
<Caption>
                                                Six Months Ended
                                                     June 30
                                           -----------------------------
                                               2003            2002
                                           -------------   -------------
<S>                                        <C>             <C>
Interest                                   $         220   $         330
Income taxes                               $         991   $         784
</Table>


ACCOUNTING FOR STOCK - BASED COMPENSATION

At June 30, 2003, the Company has six stock-based employee compensation plans.
The Company accounts for those plans under the recognition and measurement
provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees, and related



                                       8
<PAGE>



interpretations. No stock-based employee compensation cost is reflected in net
income, as all options granted under those plans had exercise prices equal to
the market value of the underlying common stock on the date of grant. The
following table illustrates the effect on net income and earnings per share as
if the Company had applied the fair value recognition provisions of Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation,
to stock-based employee compensation.

<Table>
<Caption>
                                                 THREE MONTHS ENDED JUNE 30       SIX MONTHS ENDED JUNE 30
                                                ----------------------------    ----------------------------
                                                    2003            2002            2003            2002
                                                ------------    ------------    ------------    ------------
<S>                                             <C>             <C>             <C>             <C>
Net income (loss) as reported                   $      2,174    $      1,797    $       (617)   $    (28,641)
Deduct:  Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related tax effects                              (361)           (301)           (685)           (603)
Pro forma net loss                              $      1,813    $      1,496    $     (1,302)   $    (29,244)
                                                ------------    ------------    ------------    ------------

Loss per share:
Basic and diluted - as reported                 $       0.15    $       0.13    $      (0.04)   $      (2.07)
                                                ------------    ------------    ------------    ------------

Basic and diluted  - pro forma                  $       0.13    $       0.11    $      (0.09)   $      (2.12)
                                                ------------    ------------    ------------    ------------
</Table>


MINORITY INTEREST

Bilston & Battersea Enamels plc (Bilston & Battersea), our newly acquired
subsidiary as of April 8, 2003, owns 75% of two different companies, Fine
Ceramics Transfers Limited and Carolyn Sheffield Designs Limited. The two
companies are fully consolidated into the books of Bilston & Battersea. The
minority interest on Enesco's books represents the liability for the remaining
25% that Enesco does not own of the above companies.

3. COMPREHENSIVE INCOME (LOSS):

Other comprehensive income (loss) consists only of cumulative foreign currency
translation adjustments. Comprehensive income (loss) for the three and six
months ended June 30, 2003 and 2002 was as follows (in thousands):



                                       9
<PAGE>



<Table>
<Caption>
                                                                   Three Months Ended             Six Months Ended
                                                                         June 30                      June 30
                                                               ---------------------------   ----------------------------
                                                                   2003           2002           2003            2002
                                                               ------------   ------------   ------------    ------------
<S>                                                            <C>            <C>            <C>             <C>
Net income (loss)                                              $      2,174   $      1,797   $       (617)   $    (28,641)
Other comprehensive income:
    Cumulative translation adjustments (no tax effects)               2,906          2,759          3,218           2,175
                                                               ------------   ------------   ------------    ------------
Comprehensive income (loss)                                    $      5,080   $      4,556   $      2,601    $    (26,466)
                                                               ------------   ------------   ------------    ------------
</Table>


4. GEOGRAPHIC OPERATING SEGMENTS:

Enesco operates in the giftware and collectible wholesale industry,
predominantly in two major geographic classifications (United States and
International). The following table summarizes operations by geographic
classification for the three and six months ended June 30, 2003 and 2002 (in
thousands):

<Table>
<Caption>
                                           Three Months Ended                Six Months Ended
                                                June 30                         June 30
                                      ----------------------------    ----------------------------
                                          2003            2002            2003            2002
                                      ------------    ------------    ------------    ------------
<S>                                   <C>             <C>             <C>             <C>
NET SALES
United States                         $     41,605    $     48,458    $     70,179    $     86,020
United States inter-company                   (245)           (247)           (461)           (628)
International                               19,707          18,452          37,760          36,378
International inter-company                   (181)           (174)           (455)           (404)
                                      ------------    ------------    ------------    ------------
Total consolidated                    $     60,886    $     66,489    $    107,023    $    121,366
                                      ------------    ------------    ------------    ------------

OPERATING PROFIT (LOSS)
United States                         $      2,470    $      1,990    $     (3,505)   $     (1,605)
International                                1,549           1,685           3,013           3,068
                                      ------------    ------------    ------------    ------------
Total consolidated                    $      4,019    $      3,675    $       (492)   $      1,463
                                      ------------    ------------    ------------    ------------
</Table>

Transfers between geographic operating segments 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.



                                       10
<PAGE>



There were no material changes in assets from the amounts disclosed in Enesco's
December 31, 2002 Annual Report and the basis of geographic classification of
sales and operating profit has not changed in 2003.

5. OTHER INCOME (EXPENSE), NET:

Other income (expense), net for the three and six months ended June 30, 2003 and
2002 consisted of the following (in thousands):

<Table>
<Caption>
                                           Three Months Ended                 Six Months Ended
                                                 June 30                          June 30
                                      ------------------------------    ------------------------------
                                          2003             2002              2003            2002
                                      -------------    -------------    -------------    -------------
<S>                                   <C>              <C>              <C>              <C>
Foreign currency gain (loss)          $           1    $          (9)   $          (1)   $          11
Loss on sale of fixed assets                     (4)              (2)              (4)              (3)
Bank charges and other                         (226)            (426)            (630)            (756)
                                      -------------    -------------    -------------    -------------
                                      $        (229)   $        (437)   $        (635)   $        (748)
                                      -------------    -------------    -------------    -------------
</Table>


6. INCOME (LOSS) PER COMMON SHARE (BASIS OF CALCULATIONS):

The number of shares used in the income (loss) per common share computation for
the three and six months ended June 30, 2003 and 2002 were as follows (in
thousands):

<Table>
<Caption>
                                                     Three Months Ended               Six Months Ended
                                                          June 30                         June 30
                                                -----------------------------   -----------------------------
                                                    2003            2002            2003            2002
                                                -------------   -------------   -------------   -------------
<S>                                             <C>             <C>             <C>             <C>
Basic
     Average common shares outstanding                 14,026          13,852          13,972          13,820

Diluted
     Stock options and warrants                           394             332              --              --
                                                -------------   -------------   -------------   -------------

Average shares diluted                                 14,420          14,184          13,972          13,820
                                                -------------   -------------   -------------   -------------
</Table>


The average number of diluted shares outstanding for the six months ended June
30, 2003 and June 30, 2002 excludes common stock equivalents relating to options
and warrants because the impact of the reported net loss was antidilutive. Had
Enesco reported a profit for the six months ended June 30, 2003 and June 30,
2002, the number of average shares diluted would have increased by 321 thousand
and 243 thousand, respectively. Additionally, options to purchase 1.5 million
and 1.7



                                       11
<PAGE>



million shares were outstanding during 2003 and 2002, respectively, but were not
included in the computation of diluted income (loss) per share because the
options' exercise price was greater than the average market price of the common
shares.

7. FINANCIAL INSTRUMENTS:

Enesco operates globally with various manufacturing and distribution facilities
and product sourcing locations around the world. Enesco may reduce its exposure
to fluctuations in interest rates and foreign exchange rates by creating
offsetting positions through derivative financial instruments. Enesco currently
does not use derivative financial instruments for trading or speculative
purposes. Enesco regularly monitors foreign currency exposures and ensures hedge
contract amounts do not exceed the amounts of the underlying exposures.

Enesco's current hedging activity is limited to foreign currency purchases and
intercompany foreign currency transactions. The purpose of Enesco's foreign
currency hedging activities is to protect Enesco from the risk that eventual
settlement of foreign currency transactions will be affected adversely by
changes in exchange rates. Enesco hedges these exposures by entering into
various short-term foreign exchange forward contracts. Derivative instruments
are carried at fair value in the Condensed Consolidated Balance Sheets as a
component of current assets or current liabilities. Changes in the fair value of
foreign exchange forward contracts that meet the applicable hedging criteria are
recorded as a component of other comprehensive income and reclassified into
earnings in the same period during which the hedged transaction affects
earnings. Changes in the fair value of foreign exchange forward contracts that
do not meet the applicable hedging criteria are recorded currently in income as
cost of sales or foreign exchange gain or loss, as applicable. Hedging
activities did not have a material impact on results of operations or financial
condition during the six months ended June 30, 2003.

To manage foreign currency risk, as of June 30, 2003, Enesco had entered into
forward exchange agreements with a notional value of $4.0 million that will
mature within 140 days. These contracts include sales of British pounds sterling
and purchases of U.S. dollars at an average exchange rate of 1.66, a sale of
U.S. dollars and the purchase of British pounds sterling at an average exchange
rate of 1.66 and sales of Euros and purchases of U.S. dollars at an average
exchange rate of 1.10. The fair value of these contracts is not significant. As
of June 30, 2003, Enesco had $1.1 million of interest bearing debt outstanding,
of which $975 thousand was revolving credit facility debt with an



                                       12
<PAGE>



interest rate of 2.38%. The remaining $151 thousand was notes payable, related
to the purchase of machinery and vehicles by Bilston & Battersea with interest
rates ranging from 8.3% to 10.6% and maturities ranging from October 2003
through May 2005. The fair value approximates the carrying value of these debt
instruments. Enesco currently has not hedged the interest rate risk on any of
its outstanding borrowings.


8. ACQUISITION

On April 8, 2003, the Company acquired Bilston & Battersea, which is based in
Bilston, West Midlands, England, through its European subsidiary, Enesco
Holdings Limited. Bilston & Battersea manufactures and distributes giftware,
home accessories and related products, including the high quality,
hand-decorated enamels and sculptured boxes sold under the Halcyon Days Enamels
and Halcyon Days Bonbonnieres brands. Bilston & Battersea generated sales of
approximately $10 million worldwide in 2002 and expects similar sales for 2003.
Enesco paid approximately $4.4 million in cash ($3.7 million net of acquired
cash) to acquire the company, which resulted in Enesco recording $2.7 million of
goodwill related to the purchase. As of June 30, 2003, Enesco has purchased
approximately 97% of the outstanding shares of Bilston & Battersea and has
included Bilston & Battersea's results of operations in its income statement and
balance sheet as of April 8, 2003.

9. SUBSEQUENT EVENTS

On July 31, 2003, the Company changed its state of incorporation from
Massachusetts to Illinois, through a "migratory" merger of the Massachusetts
corporation with and into a wholly owned subsidiary formed under Illinois law
solely for this purpose. The reincorporation in the State of Illinois was
approved by the Company's stockholders at the April 2003 Annual Meeting. After
the merger, the name of the Company continues to be Enesco Group, Inc.



                                       13
<PAGE>



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

                               ENESCO GROUP, INC.
                         SIX MONTHS ENDED JUNE 30, 2003


Certain statements contained in this Quarterly Report on Form 10-Q, including,
without limitation, statements containing the words "believes," "anticipates,"
"estimates," "expects," "projections," "projects," and words of similar meaning,
constitute "forward-looking statements" within the meaning of Federal securities
laws. These forward-looking statements are based in part on Enesco's reasonable
expectations and are subject to a number of factors and risks, many of which are
beyond Enesco's control. Our actual results could differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by us described below under the heading "Risk Factors" and elsewhere
in this Quarterly Report, and in other documents we file with the Securities and
Exchange Commission. In light of these uncertainties and risks, there can be no
assurance that the forward-looking statements in this Form 10-Q will occur or
continue in the future. Except for required filings under the Securities
Exchange Act of 1934, Enesco undertakes no obligation to release publicly any
revisions to these forward-looking statements that may reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make judgments, assumptions and estimates that affect the
amounts reported in the Consolidated Condensed Financial Statements and
accompanying notes. Estimates are used for, but not limited to, the accounting
for allowances for doubtful accounts and sales returns, inventory valuation,
goodwill impairment, contingencies, restructuring costs and other special
charges and taxes. Actual results could differ from these estimates. The
following critical accounting policies are impacted significantly by judgments,
assumptions and estimates used in the preparation of the Consolidated Condensed
Financial Statements.



                                       14
<PAGE>



The allowance for doubtful accounts is based on our assessments of the
collectibility of specific customer accounts and the aging of accounts
receivable. If there is a deterioration of a major customer's credit worthiness
or actual defaults are significantly different than our historical experience,
estimates of the recoverability of amounts due could be affected. An allowance
for sales returns is established based on historical trends in product returns.
If future returns do not reflect historical trends, net revenues could be
affected.

Inventory purchases and commitments are based on future demand forecasts. If
there is a sudden or significant decrease in demand for our products or there is
a higher incidence of inventory obsolescence because of rapidly changing
customer requirements, we may be required to decrease the carrying value of
inventory and gross profit could be affected.

Enesco has established accruals for taxes payable and tax assessments. The
accruals are included in current income taxes payable since it is uncertain as
to when assessments may be made and paid. Enesco has filed and continues to file
tax returns with a number of taxing authorities worldwide. While Enesco 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. To the
extent accruals differ from assessments, or when the open tax years are closed,
the accruals are adjusted through the provision for income taxes. The majority
of open tax years become closed for assessments at the end of December for the
particular open year.

ACQUISITION OF BILSTON & BATTERSEA

On April 8, 2003, the Company acquired Bilston & Battersea Enamels plc (Bilston
& Battersea), which is based in Bilston, West Midlands, England, through its
European subsidiary, Enesco Holdings Limited. Bilston & Batterseas manufactures
and distributes giftware, home accessories and related products, including the
high quality, hand-decorated enamels and sculptured boxes sold under the Halcyon
Days Enamels and Halcyon Days Bonbonnieres brands. Bilston & Battersea generated
sales of approximately $10 million worldwide in 2002 and expects similar sales
for 2003. Enesco paid approximately $4.4 million in cash ($3.7 million net of
acquired cash) to acquire the company which resulted in Enesco recording $2.7
million of goodwill related to the purchase.

NET REVENUE AND GROSS PROFIT

Net sales of $60.9 million in the second quarter of 2003 decreased by 8.4%, or
$5.6 million, from $66.5 million in the second quarter of 2002. Net sales of
$107.0 million in the first six months of



                                       15
<PAGE>



2003 decreased by 11.8%, or $14.4 million, from $121.4 million in the first six
months of 2002. The decrease in net sales for the second quarter of 2003
compared to 2002 was due to lower mass market promotional sales and lower
closeout sales. The decrease in net sales for the first six months of 2003
compared to the same period last year was primarily the result of decreased U.S.
sales of the Precious Moments and Cherished Teddies product lines as well as
lower mass market promotional sales. Enesco's Precious Moments lines represented
approximately 35% of 2003 year to date sales compared to 40% for 2002. The
Cherished Teddies lines represented approximately 9.5% of 2003 year to date
sales compared to 11% for 2002.

Net new orders of $122 million year to date for 2003 were down 10.8% versus the
comparable period of 2002. Backlog of $33.8 million at June 30, 2003 was down
approximately $8.9 million, or 20.8%, from the same point in time last year. Net
open orders (backlog) are orders received and approved by Enesco, subject to
cancellation for various reasons, including credit considerations, product
availability and customer requests. We believe the decrease in backlog is mainly
due to lower sales in the United States due to general economic conditions and
continued consolidation in the card and gift channel.

Gross profit for the second quarter of 2003 of $27.6 million was 45.3% of net
sales as compared to the second quarter of 2002 gross profit of $26.5 million,
which was 39.8% of net sales. Gross profit for the first six months of 2003 was
$46.1 million or 43.1% of net sales, as compared to gross profit for the first
six months of 2002 of $50.7 million, which was 41.7% of net sales. The increase
in gross profit for the second quarter of 2003 as compared to 2002 was due to
favorable changes in product and sales channel mix. The decrease in gross profit
for the first six months of 2003 as compared to 2002 was primarily due to the
lower U.S. sales volume. Gross profit can be affected in the future by changes
in vendor pricing, obsolescence charges, changes in shipment volume, price
competition and changes in distribution channel, geographic or product mix.

SELLING, DISTRIBUTION, AND GENERAL AND ADMINISTRATIVE EXPENSES

Selling, distribution and general and administrative expenses (operating
expenses) for the second quarter of 2003 were $23.6 million, or 38.7% of sales,
up slightly as compared to second quarter of 2002 of $22.8 million, or 34.3% of
sales. Operating expenses year to date were $46.6 million, or 43.6% of sales as
compared to 2002 operating expenses of $49.2 million, or 40.5% of sales. The
increase in operating expenses in the second quarter of 2003 as compared to 2002
is largely due to the inclusion of Bilston & Battersea expenses in 2003 and the
impact of foreign currency exchange rate changes. Operating expenses for the
first half of 2003 decreased $2.6 million as compared to



                                       16
<PAGE>



2002 due to the continuing impact of numerous cost control measures including
headcount reductions, showroom savings, catalog savings and decreased travel.

OPERATING PROFIT (LOSS)

In the second quarter of 2003, Enesco generated operating profit of $4.0 million
compared to $3.7 million in 2002. The $300 thousand increase was the result of
gross margin improvements in 2003 offset partially by an increase in operating
expenses. Enesco incurred an operating loss of $492 thousand for the first six
months of 2003, compared with a profit of $1.5 million in the first six months
of 2002. The year to date decrease of $2.0 million in operating income as
compared to 2002 is the result of lower gross profit due to lower sales volumes
partially offset by a decrease in operating expenses of $2.6 million.

INTEREST AND OTHER INCOME (EXPENSE), NET

Interest expense of $495 thousand for the second quarter of 2003 was $316
thousand more than the second quarter of 2002 primarily due to interest expense
related to an Illinois income tax audit settlement in the second quarter of
2003. Interest income for the second quarter of 2003 is $236 thousand compared
to $51 thousand in 2002. The increase is due to interest income related to a
refund from Illinois income taxes. Other expense, net, for the second quarter of
2003 is $229 thousand compared to $437 thousand in 2002. The decrease is due to
lower bank and credit card processing costs.

Interest expense of $544 thousand for the first six months of 2003 was $242
thousand more than the first six months of 2002 due to the Illinois income tax
audit settlement noted above, offset partially by lower bank related interest
expenses. The increase in interest income in 2003 is due to interest income on
the Illinois tax refund noted above as well as increased interest income due to
higher invested cash balances. Other expense, net, for the first six months of
2003 is lower by $113 thousand due to lower bank and credit card processing
fees.

PROVISION FOR INCOME TAXES

The effective tax rate was 38.4% for the second quarter of 2003 and 51.2% for
the first six months of 2003. The comparable tax rates were 42.2% and 30.6% for
second quarter and year to date 2002, respectively, reflecting the geographical
mix of earnings. The effective tax rate differs from the U.S. statutory rate
primarily due to the varying tax rates of foreign jurisdictions. Our future
effective tax rates could be affected if the mix of earnings varies in countries
that have higher or lower statutory rates or if tax laws and regulations change.



                                       17
<PAGE>



INTERNATIONAL ECONOMIES AND CURRENCIES

We conduct business globally. Accordingly, our future results could be
materially affected by a variety of uncontrollable and changing factors
including, among others, foreign currency exchange rates; regulatory, political,
or economic conditions in a specific country or region; trade protection
measures and other regulatory requirements; and the effects of terrorist
activity, armed conflict, epidemics and natural disasters. Any or all of these
factors could have a material impact on our future results.

As a global concern, we face exposure to movements in foreign currency exchange
rates. These exposures may change over time and could have a material impact on
our financial results and cash flows. Historically, our primary exposures have
related to non dollar-denominated transactions in Canada and Europe, as well as
dollar-denominated inventory purchases by our international operating units.

At the present time, we hedge only those currency exposures associated with
certain assets and liabilities denominated in foreign currencies and
periodically will hedge anticipated foreign currency cash flows. The hedging
activity undertaken by Enesco is intended to offset the impact of currency
fluctuations on certain foreign currency transactions. See Note 7, "Financial
Instruments", to the Consolidated Condensed Financial Statements for additional
information.

LIQUIDITY AND CAPITAL RESOURCES

Enesco has historically satisfied working capital requirements with internally
generated funds and short-term loans. Cash balances and working capital
requirements fluctuate due to operating results, shipping cycles, accounts
receivable collections, inventory management and timing of payments, among other
factors. Working capital requirements fluctuate during the year and are
generally greatest early in the fourth quarter and lowest early in the first
quarter. For additional discussion, see the Risk Factors section below. Cash and
cash equivalents were $7.6 million on June 30, 2003.

Operating cash flows are a function of net income (losses) plus non-cash
expenses such as depreciation, and our ability to manage working capital. Cash
used by operating activities in the first six months of 2003 was $5.6 million.
The major uses of funds from operating activities were increased accounts
receivables, increased inventory and decreased accrued expenses. These uses



                                       18
<PAGE>



of cash were partially offset by operating cash provided by reductions in
current tax assets, increased accounts payable and depreciation expense.

Enesco has filed and continues to file tax returns with a number of taxing
authorities worldwide. While we believe 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. Enesco 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 Enesco's
current liquid asset position and credit facilities, Enesco 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.

Cash used by investing activities in the first six months of 2003 was $6.3
million, primarily due to the acquisition of Bilston & Battersea in April 2003.
The remaining cash used by investing activities is for computer hardware and
software purchases related to implementation of a new domestic computer system
planned to be completed by the end of 2003.

Cash provided by financing activities in the first six months of 2003 was $1.8
million, attributable to increased borrowings and issuance of additional
treasury stock shares.

In August 2000, Enesco entered into a $50 million domestic 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 Enesco's shares and
paying dividends. In addition, Enesco is required to satisfy minimum operating
profit, fixed charge coverage ratio and leverage ratio tests at the end of each
quarter. The credit agreement, as amended, grants a security interest in
Enesco's domestic accounts receivable, inventory and real estate. In May 2002,
the credit facility was further amended to extend the termination date to May
2003. Certain financial covenants were also modified. In May 2003, the credit
facility was further amended to extend the termination date to June 2003.

In June 2003, Enesco entered into a new three year domestic $50.0 million
unsecured revolving credit facility to replace the expiring revolving credit
facility. The credit agreement contains financial and operating covenants
including restrictions on incurring indebtedness and liens,



                                       19
<PAGE>



acquisitions, selling property, repurchasing the Company's shares and paying
dividends. In addition, Enesco is required to satisfy fixed charge coverage
ratio and leverage ratio tests at the end of the second, third and fourth
quarters and a minimum annual operating profit covenant. As of June 30, 2003,
Enesco was in compliance with all covenants under the revolving credit
agreement. Enesco is not aware of any trends, events, demands, commitments or
uncertainties that reasonably can be expected to have a material effect on
liquidity and the ability to meet anticipated requirements for working capital
and capital expenditures. We believe that our current cash and cash equivalents,
cash generated from operations, and available financing will satisfy our
expected working capital needs, capital expenditures and other liquidity
requirements associated with our existing operations. In addition, there are no
transactions, arrangements or other relationships with unconsolidated entities
or other persons that are reasonably likely to materially affect liquidity or
requirements for capital resources.

The principal sources of Enesco's liquidity are its available cash balances,
cash from operations and available financing. At June 30, 2003, Enesco had
formal and informal unused lines of credit of approximately $57.4 million. The
informal lines are bank lines that have no commitment fees. As of June 30, 2003,
Enesco had $1.1 million of interest bearing debt outstanding.

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.

RISK FACTORS

Set forth below and elsewhere in this Report and in other documents we file with
the SEC are risks and uncertainties that could cause actual results to differ
materially from the results contemplated by the forward-looking statements
contained in this Report.

The results of operations for any quarter or fiscal year are not necessarily
indicative of results to be expected in future periods. Our operating results
have been in the past, and will continue to be, subject to quarterly and annual
fluctuations as a result of a number of factors. These factors include:

-        Changes in economic conditions and specific market conditions

-        The ability to secure, maintain and renew popular licenses,
         particularly our licenses for Precious Moments, Cherished Teddies and
         Jim Shore



                                       20
<PAGE>



-        Fluctuations in demand for our products

-        Manufacturing lead times

-        The effects of terrorist activity and armed conflict, that could cause
         a disruption in global economic activity, changes in logistics and
         security arrangements, particularly with respect to our reliance on
         manufacturing facilities in China

-        The timing of orders, timing of shipments and our ability to meet
         customer demands

-        Inventory levels and purchase commitments below or exceeding
         requirements based upon future demand forecasts

-        Price and product competition in the giftware industry

-        The trend toward retail store consolidation in the card and gift
         channel in the United States

-        Variations in sales channels, product costs or mix of products sold

-        The geographical mix of our revenue and the associated impact on gross
         margin

-        Our ability to achieve targeted cost reductions particularly in the
         United States' operations

-        Actual events, circumstances, outcomes and amounts differing from
         judgments, assumptions and estimates used in determining the amounts of
         certain assets (including the amounts of related allowances),
         liabilities and other items reflected in our financial statements.

As a consequence, operating results for a particular future period are difficult
to predict. Any of the foregoing factors, or any other factors discussed
elsewhere herein, could have a material adverse effect on our business, results
of operations and financial condition.

Gross margin may be adversely affected in the future by increases in vendor
costs, excess inventory, obsolescence charges, changes in shipment volume, price
competition and changes in channels of distribution or in the mix of products
sold. Gross margin may also be impacted by geographic mix of product sold.

Our ability to import products and satisfy customer orders on a timely basis is
affected by the availability of, and demand for, quality production capacity
abroad. We compete with other importers of giftware products for the foreign
manufacturing sources that can produce high-quality products at affordable
prices. While we believe that there are other manufacturing sources available
for our product lines, any loss, disruption or substantial reduction of sourcing
capability or shipping from one or more of our key manufacturing facilities
could have a significant short-term adverse



                                       21
<PAGE>



effect on our operations. We are subject to the following risks inherent in
foreign manufacturing: fluctuations in currency exchange rates; labor, economic
and political instability; the effects of terrorist activity, armed conflict and
epidemics, causing disruption in global economic activity and changes in
logistics and security arrangements; cost and capacity fluctuation and delays in
transportation, dockage and materials handling; restrictive actions by foreign
governments; nationalizations; the laws and policies of the United States
affecting importation of goods, including duties, quotas and taxes. Since the
terrorist attacks on September 11, 2001 and the outbreak of the SARS epidemic,
the U.S. Customs Service has enacted various security procedures affecting the
importation of goods. Such procedures could adversely affect the cost and timing
of our receipt of goods from our foreign manufacturers.

In 2002, approximately 74% of our products were manufactured in, and imported
from China. We anticipate that this percentage will remain the same or increase
in the foreseeable future. China has joined the World Trade Organization and has
been accorded permanent "Normal Trade Relations" status by the U.S. government.

Various commercial and legal practices widespread in China, including the
handling of intellectual properties and certain labor practices, as well as
certain political and military actions taken or suggested by China, are under
review by the U.S. government. China has been designated a Country of Particular
Concern ("CPC") pursuant to the International Religious Freedom Act of 1998
("IRFA"). The IRFA provides several specific retaliatory actions that could be
taken by the U.S. government; none of which we believe would have a material
impact on our business. The IRFA, however, also accords the President of the
United States of America broad discretion in fashioning other or additional
actions and, due to the breadth of the presidential powers under the IRFA, we
are unable to predict what, if any, action the President could take in the
future.

Accordingly, conducting business with vendors located in China is subject to
political uncertainties, the financial impact of which we are unable to
estimate. To the extent China may have its exports or transaction of business
with U.S. entities subject to political retaliation, the cost of Chinese imports
could increase significantly and/or the ability to import goods from China may
be materially impaired. In such an event, there could be an adverse effect on
our operations until alternative arrangements for the manufacture of our product
were made on economic, production and operational terms at least as favorable as
those currently in effect.



                                       22
<PAGE>



The principal competitive risks in the markets in which we presently compete and
may compete in the future are:

-        Performance

-        Price

-        Collectibility of our products

-        Market presence

-        New product introductions

-        Product costs

-        Differentiation of new products from those of our competitors

-        Time to market on new products


LEGAL PROCEEDINGS

We are a party to certain lawsuits in the normal course of our business.
Litigation can be expensive, lengthy and disruptive to normal business
operations. While we can not predict the eventual outcome of the proceedings, we
do not believe that any of the current legal proceedings will have a material
adverse effect on the consolidated financial statements of Enesco.



                                       23
<PAGE>



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Enesco operates globally with various manufacturing and distribution facilities
and product sourcing locations around the world. As such, Enesco is exposed to
foreign exchange risk since purchases and sales are made in foreign currencies.
In addition, Enesco is subject to interest rate risk on outstanding borrowings.
Enesco may reduce its exposure to fluctuations in interest rates and foreign
exchange rates by creating offsetting positions through the use of derivative
financial instruments. Enesco currently does not use derivative financial
instruments for trading or speculative purposes. Enesco regularly monitors its
foreign currency exposures and ensures that the hedge contract amounts do not
exceed the amounts of the underlying exposures. To manage foreign currency risk,
as of June 30, 2003, Enesco had entered into forward exchange agreements with a
notional value of $4.0 million that will mature within 140 days. These contracts
include sales of British pounds sterling and the purchase of U.S. dollars at an
average exchange rate of 1.66, a sale of U.S. dollars and the purchase of
British pounds sterling at an average exchange rate of 1.66 and sales of Euros
and purchases of U.S. dollars at an average exchange rate of 1.10. The fair
value of these contracts is not significant. As of June 30, 2003, Enesco had
$1.1 million interest bearing debt outstanding.



                                       24
<PAGE>



ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, Enesco carried out an
evaluation, under the supervision and with the participation of Enesco's
management, including Enesco's (i) Chief Executive Officer ("CEO") and (ii)
Chief Financial Officer and Treasurer ("CFO"), of the effectiveness of the
design and operation of Enesco's disclosure controls and procedures. Based on
that evaluation, Enesco's management, including the CEO and CFO, concluded that
Enesco's disclosure controls and procedures are operating effectively as
designed. There have been no significant changes in Enesco's internal controls
or in other factors that could significantly affect internal controls over
financial reporting .We are committed to a continuing process of identifying,
evaluating and implementing improvements to the effectiveness of our disclosure
and internal controls and procedures. Our management, including our CEO and CFO,
does not expect that our controls and procedures will prevent all errors. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
within Enesco have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns
can occur because of a simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of any system of
controls is also based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Over time,
controls may become inadequate because of changes in conditions, or the degree
of compliance with the policies or procedures may deteriorate. Because of the
inherent limitations in any control system, misstatements due to error or
violations of law may occur and not be detected.



                                       25
<PAGE>



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  31.1  Certification of President and CEO

                  31.2  Certification of CFO and Treasurer

                  32.1  Statement of Chief Executive Officer pursuant to Section
                        906 of the Sarbanes-Oxley Act of 2002

                  32.2  Statement of Chief Financial Officer pursuant to Section
                        906 of the Sarbanes-0xley Act of 2002

         (b)      Reports on Form 8-K

                  (i) Form 8-K filed June 19, 2003 reporting Enesco entered into
                  a three year $50 million unsecured revolving credit agreement
                  with Fleet National Bank as agent and LaSalle Bank N.A.

                  (ii) Form 8-K filed July 24, 2003 reporting Enesco's Second
                  Quarter 2003 financial results.

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



                                       26
<PAGE>



                                   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 13, 2003                      /s/ Daniel DalleMolle
                                           -------------------------------------
                                           Daniel DalleMolle
                                           President and Chief Executive Officer





Date: August 13, 2003                      /s/ Thomas F. Bradley
                                           -------------------------------------
                                           Thomas F. Bradley
                                           Chief Financial Officer and Treasurer



                                       27