## UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

## FORM 10-QQuarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Fiscal Quarter Ended
May 1, 2004

Commission File Number
1-5287


Pathmark Stores, Inc.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

22-2879612(I.R.S. Employer
Identification No.)200 Milik Street
Carteret, New Jersey(Address of principal executive office)

07008(Zip Code)(732) 499-3000(Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to Section 12(g) of the Act:Common Stock, par value $0.01 per share
Warrants to purchase Common Stock

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 ý                        No o

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

Yes ý                        No o

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.

Yes ý                        No o

As of June 1, 2004, 30,071,192 shares of the Common Stock were outstanding.





### Part I. Financial Information

#### Item 1. Consolidated Financial Statements

### Pathmark Stores, Inc.
Consolidated Statements of Operations (Unaudited)(in millions, except per share data)

|                                                        | 13 Weeks Ended
|------------------------------------------------------- | --------------
|
|
|
|Sales                                                   |               
|Cost of goods sold                                      |               
|                                                        |               
|Gross profit                                            |               
|Selling, general and administrative expenses            |               
|Depreciation and amortization                           |               
|                                                        |               
|Operating earnings                                      |               
|Interest expense                                        |               
|                                                        |               
|Earnings (loss) before income taxes                     |               
|Income tax benefit (provision)                          |               
|                                                        |               
|Net earnings (loss)                                     |               
|                                                        |               
|Weighted average number of shares outstanding  basic   |               
|                                                        |               
|Weighted average number of shares outstanding  diluted |               
|                                                        |               
|Net earnings (loss) per share  basic and diluted       |               
|                                                        |               

See notes to consolidated financial statements (unaudited).

2

### Pathmark Stores, Inc.
Consolidated Balance Sheets(in millions, except share and per share amounts)

|                                                          | (Unaudited) May 1, 2004 |  | January 31,2004
|--------------------------------------------------------- | ----------------------- |  | ---------------
|ASSETS                                                    |                         |  |                
|Current assets                                            |                         | 
|Cash                                                      |                         |  | $              
|Accounts receivable, net                                  |                         |  |                
|Merchandise inventories                                   |                         |  |                
|Due from suppliers                                        |                         |  |                
|Other current  assets                                     |                         |  |                
|                                                          |                         |  |                
|Total current assets                                      |                         |  |                
|Property and equipment, net                               |                         |  |                
|Goodwill                                                  |                         |  |                
|Other noncurrent assets                                   |                         |  |                
|                                                          |                         |  |                
|Total assets                                              |                         |  | $              
|                                                          |                         |  |                
|LIABILITIES AND STOCKHOLDERS' EQUITY                      |                         | 
|Current liabilities                                       |                         | 
|Accounts payable                                          |                         |  | $              
|Current maturities of long-term debt                      |                         |  |                
|Current portion of lease obligations                      |                         |  |                
|Other accrued expenses and other current liabilities      |                         |  |                
|                                                          |                         |  |                
|Total current liabilities                                 |                         |  |                
|Long-term debt                                            |                         |  |                
|Long-term lease obligations                               |                         |  |                
|Deferred income taxes                                     |                         |  |                
|Other noncurrent liabilities                              |                         |  |                
|                                                          |                         |  |                
|Total liabilities                                         |                         |  |                
|                                                          |                         |  |                
|Stockholders' equity                                      |                         | 
|Preferred stock                                           |                         |  |                
|Authorized: 5,000,000 shares; no shares issued            |                         | 
|Common stock, par value $0.01 per share                   |                         |  |                
|Authorized: 100,000,000 shares; issued: 30,099,510 shares |                         | 
|at May 1, 2004 and at January 31, 2004                    |                         | 
|Common stock warrants                                     |                         |  |                
|Paid-in capital                                           |                         |  |                
|Accumulated deficit                                       |                         |  |                
|Accumulated other comprehensive loss                      |                         |  |                
|Treasury stock, at cost: 28,318 shares at May 1, 2004 and |                         | 
|at January 31, 2004                                       |                         |  |                
|                                                          |                         |  |                
|Total stockholders' equity                                |                         |  |                
|                                                          |                         |  |                
|Total liabilities and stockholders' equity                |                         |  | $              
|                                                          |                         |  |                

See notes to consolidated financial statements (unaudited).

3

### Pathmark Stores, Inc.
Consolidated Statements of Cash Flows (Unaudited)(in millions)

|                                                                                           | 13 Weeks Ended
|------------------------------------------------------------------------------------------ | --------------
|
|Operating Activities                                                                       |               
|Net earnings (loss)                                                                        |               
|Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: |               
|Depreciation and amortization                                                              |               
|Amortization of deferred financing costs                                                   |               
|Gain on sale of real estate                                                                |               
|Deferred income tax provision                                                              |               
|Cash provided by (used for) operating assets and liabilities:                              |               
|Accounts receivable                                                                        |               
|Merchandise inventories                                                                    |               
|Due from suppliers                                                                         |               
|Other current assets                                                                       |               
|Other noncurrent assets                                                                    |               
|Accounts payable                                                                           |               
|Accrued interest                                                                           |               
|Other accrued expenses and other current liabilities                                       |               
|Other                                                                                      |               
|                                                                                           |               
|Cash provided by operating activities                                                      |               
|                                                                                           |               
|Investing Activities                                                                       |               
|Capital expenditures, including technology investments                                     |               
|Acquisition of Community Supermarket Corporation                                           |               
|Proceeds from sale of real estate                                                          |               
|                                                                                           |               
|Cash used for investing activities                                                         |               
|                                                                                           |               
|Financing Activities                                                                       |               
|Borrowings (repayments) under the working capital facility, net                            |               
|Repayments of capital lease obligations                                                    |               
|Repayments of other debt, net                                                              |               
|Proceeds from lease financings                                                             |               
|Repayments of the term loan                                                                |               
|                                                                                           |               
|Cash provided by (used for) financing activities                                           |               
|                                                                                           |               
|Increase in cash                                                                           |               
|Cash at beginning of period                                                                |               
|                                                                                           |               
|Cash at end of period                                                                      |               
|                                                                                           |               
|Supplemental Disclosures of Cash Flow Information                                          |               
|Interest paid                                                                              |               
|                                                                                           |               
|Income taxes paid                                                                          |               
|                                                                                           |               
|Noncash Investing and Financing Activities                                                 |               
|Capital lease obligations incurred                                                         |               
|                                                                                           |               
|                                                                                           |               

See notes to consolidated financial statements (unaudited).

4

### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)

##### Note 1. Significant Accounting Policies

Business.
Pathmark Stores, Inc. (the "Company" or "Pathmark") operated 142 supermarkets as of May 1, 2004,
primarily in the New York-New Jersey and Philadelphia metropolitan areas.

Basis of
Presentation. The unaudited consolidated financial statements included herein have
been prepared by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission (the SEC). In the opinion of management, the consolidated
financial statements included herein reflect all adjustments which are of a normal and
recurring nature and are necessary to present fairly the results of operations and
financial position of the Company. This report should be read in conjunction with the
audited financial statements and notes thereto included in the Companys Annual
Report on Form 10-K for the year ended January 31, 2004.

Principles of
Consolidation. The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are 100% owned. All intercompany transactions
have been eliminated in consolidation.

Stock-Based
Compensation. The Company accounts for stock-based compensation plans using the
intrinsic value recognition and measurement principles of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees. Since the exercise
price of all stock options granted under the Companys stock-based compensation plans
was equal to the market price of the underlying common stock on the grant date, no
stock-based compensation expense is recognized in the Companys operating results.

The following pro forma
disclosure illustrates the effect on net earnings (loss) and net earnings
(loss) per share if the Company had applied the fair value recognition
provisions of the Financial Accounting Standard Boards (FASB) Statement
of Financial Accounting Standards (SFAS) No. 123, as amended by SFAS No. 148
(in millions, except per share amounts):

|                                                                  | 13 Weeks Ended
|----------------------------------------------------------------- | --------------
|
|Net earnings (loss), as reported                                  |               
|Less: stock-based compensation expense, net of related tax effect |               
|                                                                  |               
|Net loss, pro forma                                               |               
|                                                                  |               
|Weighted average number of shares outstanding - basic             |               
|                                                                  |               
|Weighted average number of shares outstanding - diluted           |               
|                                                                  |               
|Net earnings (loss) per share - basic and diluted, as reported    |               
|Less: stock-based compensation expense, net of related tax effect |               
|                                                                  |               
|Net loss per share - basic and diluted, pro forma                 |               
|                                                                  |               
|                                                                  |               

5

### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 2. Long-Term Debt

Long-term debt is comprised of the following (in millions):

|                                                          | May 1, 2004 |  | January 31,2004
|--------------------------------------------------------- | ----------- |  | ---------------
|Senior subordinated notes                                 |             |  | $              
|Term loan                                                 |             |  |                
|Working capital facility                                  |             |  |                
|Mortgages                                                 |             |  |                
|Other debt                                                |             |  |                
|                                                          |             |  |                
|Total debt                                                |             |  |                
|Less: current maturities and the working capital facility |             |  |                
|                                                          |             |  |                
|Long-term debt                                            |             |  | $              
|                                                          |             |  |                

The Company was in
compliance with all debt covenants as of May 1, 2004.

##### Note 3. Interest Expense

Interest expense is
comprised of the following (in millions):

|                                         | 13 Weeks Ended
|---------------------------------------- | --------------
|
|Senior subordinated notes                |               
|Term loan                                |               
|Working capital facility                 |               
|Mortgages                                |               
|Lease obligations                        |               
|Amortization of deferred financing costs |               
|Other                                    |               
|                                         |               
|Interest expense                         |               
|                                         |               

##### Note 4. Comprehensive Earnings (Loss)

Comprehensive earnings
(loss) is comprised of the following (in millions):

|                                               | 13 Weeks Ended
|---------------------------------------------- | --------------
|
|Net earnings (loss)                            |               
|Other comprehensive earnings:                  |               
|Unrealized gain on cash flow hedge, net of tax |               
|                                               |               
|Comprehensive earnings (loss)                  |               
|                                               |               
|                                               |               

6

### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 5. Guarantees

In the normal course of
business, the Company has assigned to third parties various leases related to former
businesses that the Company sold as well as former operating Pathmark supermarkets (the
Assigned Leases). When the Assigned Leases were assigned, the Company
generally remained secondarily liable with respect to these lease obligations. As such, if
any of the assignees were to become unable to continue making payments under the Assigned
Leases, the Company could be required to assume the lease obligation. As of January 31,
2004, 68 Assigned Leases remain in place. Assuming that each respective assignee became
unable to continue to make payments under an Assigned Lease, an event the Company believes
to be remote, management estimates its maximum potential obligation with respect to the
Assigned Leases to be approximately $121.5 million, which could be partially or totally
offset by reassigning or subletting such leases. The Company has recognized a liability on
its consolidated balance sheet as of May 1, 2004 of approximately $2.8 million, which
represents certain guarantees attributable to the Companys secondary liability in
connection with Assigned Leases assigned after December 31, 2002.

##### Note 6. Benefits

The Company sponsors a
qualified pension plan and several nonqualified pension plans for its associates as well
as retiree health and life insurance benefits, primarily for union groups and retired
non-union associates. The components of net periodic cost (cost reduction) are as follows
(in millions):

|                                           | Pension Benefitsfor the 13 Weeks Ended |  |   | Other Postretirement Benefitsfor the 13 Weeks Ended |  
|------------------------------------------ | -------------------------------------- |  | - | --------------------------------------------------- | -
|
|Service cost                               |                                        |  | $ | 0.8                                                 |  
|Interest cost                              |                                        |  |   | 3.0                                                 |  
|Expected return on plan assets             |                                        |  |   | (5.6                                                | )
|Amortization of prior service costs        |                                        |  |   | 0.1                                                 |  
|Amortization of losses                     |                                        |  |   | 0.7                                                 |  
|Retirement incentive program               |                                        |  |   |                                                    |  
|                                           |                                        |  |   |                                                     |  
|Net periodic benefit cost (cost reduction) |                                        |  | $ | (1.0                                                | )
|                                           |                                        |  |   |                                                     |  

##### Note 7. Goodwill

On February 20, 2004, the
Company purchased the remaining 67% of the common stock of Community Supermarket
Corporation (CSC) that it did not already own from the other shareholder for
$4.5 million in cash (the Acquisition). As a result of the Acquisition, the
Company owns 100% of CSC. CSC has been a tenant under a lease for a supermarket in Newark,
New Jersey (the Newark Store) and prior to the acquisition, had retained the
Company to manage the supermarket for it. The Acquisition was accounted for utilizing the
purchase method, in which the purchase price was allocated to the fair value of assets
acquired and liabilities assumed, and resulted in additional goodwill of $4.5 million. The
results of operations of CSC are included in the Companys consolidated financial
statements subsequent to the acquisition date.

7

### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 8. Consolidating Financial Information

The following represents
the consolidating financial statements of Pathmark and its 100% owned guarantor and
nonguarantor subsidiaries. The guarantor subsidiaries are comprised of seven 100% owned
entities, including Pathmarks distribution subsidiary, and guarantee on a full and
unconditional and joint and several basis, the 8.75% Senior Subordinated Notes, due 2012
(the Senior Subordinated Notes.) The nonguarantor subsidiaries are comprised
of four 100% owned single-purpose entities. Each of those entities owns the real estate on
which a supermarket leased to Pathmark is located.

|                                             | Pathmark | GuarantorSubsidiaries | Non-GuarantorSubsidiaries | Intercompany Elimination | ConsolidatedTotal
|-------------------------------------------- | -------- | --------------------- | ------------------------- | ------------------------ | -----------------
|
|Consolidating Statements of Operations:      |          |                       |                           |                          |                  
|For the 13 Weeks Ended May 1, 2004           |          |                      
|Sales                                        |          |                       | $                         | 990.1                    |                  
|Cost of goods sold                           |          |                       |                           | (711.4                   | )                
|                                             |          |                       |                           |                          |                  
|Gross profit                                 |          |                       |                           | 278.7                    |                  
|Selling, general and administrative expenses |          |                       |                           | (247.0                   | )                
|Depreciation and amortization                |          |                       |                           | (19.4                    | )                
|                                             |          |                       |                           |                          |                  
|Operating earnings                           |          |                       |                           | 12.3                     |                  
|Interest expense                             |          |                       |                           | (16.0                    | )                
|Equity in earnings of subsidiaries           |          |                       |                           | 0.5                      |                  
|                                             |          |                       |                           |                          |                  
|Earnings (loss) before income taxes          |          |                       |                           | (3.2                     | )                
|Income tax benefit                           |          |                       |                           | 1.4                      |                  
|                                             |          |                       |                           |                          |                  
|Net earnings (loss)                          |          |                       | $                         | (1.8                     | )                
|                                             |          |                       |                           |                          |                  
|                                             |          |                       |                           |                          |                  
|                                            
|For the 13 Weeks Ended May 3, 2003           |          |                      
|Sales                                        |          |                       | $                         | 1,004.7                  |                  
|Cost of goods sold                           |          |                       |                           | (716.4                   | )                
|                                             |          |                       |                           |                          |                  
|Gross profit (loss)                          |          |                       |                           | 288.3                    |                  
|Selling, general and administrative expenses |          |                       |                           | (248.4                   | )                
|Depreciation and amortization                |          |                       |                           | (19.0                    | )                
|                                             |          |                       |                           |                          |                  
|Operating earnings (loss)                    |          |                       |                           | 20.9                     |                  
|Interest expense                             |          |                       |                           | (16.3                    | )                
|Equity in loss of subsidiaries               |          |                       |                           | (3.1                     | )                
|                                             |          |                       |                           |                          |                  
|Earnings (loss) before income taxes          |          |                       |                           | 1.5                      |                  
|Income tax provision                         |          |                       |                           | (0.6                     | )                
|                                             |          |                       |                           |                          |                  
|Net earnings (loss)                          |          |                       | $                         | 0.9                      |                  
|                                             |          |                       |                           |                          |                  
|                                             |          |                      

8

### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 8. Consolidating Financial Information  (Continued)

|                                           | Pathmark | GuarantorSubsidiaries | Non-GuarantorSubsidiaries | Intercompany Elimination | ConsolidatedTotal
|------------------------------------------ | -------- | --------------------- | ------------------------- | ------------------------ | -----------------
|
|Consolidating Balance Sheets:              |          |                       |                           |                          |                  
|As of May 1, 2004                          |          |                      
|Merchandise inventories                    |          |                       | $                         | 175.8                    |                  
|Other current assets                       |          |                       |                           | 122.7                    |                  
|                                           |          |                       |                           |                          |                  
|Total current assets                       |          |                       |                           | 298.5                    |                  
|Property and equipment, net                |          |                       |                           | 493.9                    |                  
|Goodwill                                   |          |                       |                           | 438.5                    |                  
|Investment in subsidiaries                 |          |                       |                           | 58.7                     |                  
|Other noncurrent assets                    |          |                       |                           | 179.3                    |                  
|                                           |          |                       |                           |                          |                  
|Total assets                               |          |                       | $                         | 1,468.9                  |                  
|                                           |          |                       |                           |                          |                  
|Accounts payable                           |          |                       | $                         | 73.9                     |                  
|Other current liabilities                  |          |                       |                           | 178.8                    |                  
|                                           |          |                       |                           |                          |                  
|Total current liabilities                  |          |                       |                           | 252.7                    |                  
|Long-term debt                             |          |                       |                           | 400.2                    |                  
|Long-term lease obligations                |          |                       |                           | 173.0                    |                  
|Other noncurrent liabilities               |          |                       |                           | 269.8                    |                  
|                                           |          |                       |                           |                          |                  
|Total liabilities                          |          |                       |                           | 1,095.7                  |                  
|Stockholders equity                       |          |                       |                           | 373.2                    |                  
|                                           |          |                       |                           |                          |                  
|Total liabilities and stockholders equity |          |                       | $                         | 1,468.9                  |                  
|                                           |          |                       |                           |                          |                  
|                                          
|As of January 31, 2004                     |          |                      
|Merchandise inventories                    |          |                       | $                         | 163.5                    |                  
|Other current assets                       |          |                       |                           | 141.5                    |                  
|                                           |          |                       |                           |                          |                  
|Total current assets                       |          |                       |                           | 305.0                    |                  
|Property and equipment, net                |          |                       |                           | 496.1                    |                  
|Goodwill                                   |          |                       |                           | 434.0                    |                  
|Investment in subsidiaries                 |          |                       |                           | 58.2                     |                  
|Other noncurrent assets                    |          |                       |                           | 171.1                    |                  
|                                           |          |                       |                           |                          |                  
|Total assets                               |          |                       | $                         | 1,464.4                  |                  
|                                           |          |                       |                           |                          |                  
|Accounts payable                           |          |                       | $                         | 80.0                     |                  
|Other current liabilities                  |          |                       |                           | 168.6                    |                  
|                                           |          |                       |                           |                          |                  
|Total current liabilities                  |          |                       |                           | 248.6                    |                  
|Long-term debt                             |          |                       |                           | 400.4                    |                  
|Long-term lease obligations                |          |                       |                           | 176.1                    |                  
|Other noncurrent liabilities               |          |                       |                           | 264.5                    |                  
|                                           |          |                       |                           |                          |                  
|Total liabilities                          |          |                       |                           | 1,089.6                  |                  
|Stockholders equity                       |          |                       |                           | 374.8                    |                  
|                                           |          |                       |                           |                          |                  
|Total liabilities and stockholders equity |          |                       | $                         | 1,464.4                  |                  
|                                           |          |                       |                           |                          |                  

9

### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 8. Consolidating Financial Information  (Continued)

|                                                   | Pathmark | GuarantorSubsidiaries | Non-GuarantorSubsidiaries | Intercompany Elimination | ConsolidatedTotal
|-------------------------------------------------- | -------- | --------------------- | ------------------------- | ------------------------ | -----------------
|
|Consolidating Cash Flow Statements:                |          |                       |                           |                          |                  
|For the 13 Weeks Ended May 1, 2004                 |          |                      
|Operating Activities                               |          |                      
|Cash provided by operating activities              |          |                       | $                         | 12.6                     |                  
|                                                   |          |                       |                           |                          |                  
|Investing Activities                               |          |                      
|Capital expenditures, including technology         |          |                      
|investments                                        |          |                       |                           | (19.6                    | )                
|Acquisition of Community Supermarket Corporation   |          |                       |                           | (4.5                     | )                
|Proceeds from sale of real estate                  |          |                       |                           | 2.5                      |                  
|                                                   |          |                       |                           |                          |                  
|Cash used for investing activities                 |          |                       |                           | (21.6                    | )                
|                                                   |          |                       |                           |                          |                  
|Financing Activities                               |          |                      
|Borrowings under the working capital facility, net |          |                       |                           | 15.9                     |                  
|Repayments of capital lease obligations            |          |                       |                           | (2.1                     | )                
|Repayments of other debt, net                      |          |                       |                           | (2.1                     | )                
|Intercompany equity transactions                   |          |                       |                           | 0.2                      |                  
|                                                   |          |                       |                           |                          |                  
|Cash provided by (used for) financing activities   |          |                       |                           | 11.9                     |                  
|                                                   |          |                       |                           |                          |                  
|Increase in cash                                   |          |                       |                           | 2.9                      |                  
|Cash at beginning at period                        |          |                       |                           | 8.7                      |                  
|                                                   |          |                       |                           |                          |                  
|Cash at end of period                              |          |                       | $                         | 11.6                     |                  
|                                                   |          |                       |                           |                          |                  
|                                                  
|For the 13 Weeks Ended May 3, 2003                 |          |                      
|Operating Activities                               |          |                      
|Cash provided by operating activities              |          |                       | $                         | 12.4                     |                  
|                                                   |          |                       |                           |                          |                  
|Investing Activities                               |          |                      
|Capital expenditures, including technology         |          |                      
|investments                                        |          |                       |                           | (7.9                     | )                
|Proceeds from sale of real estate                  |          |                       |                           | 3.0                      |                  
|                                                   |          |                       |                           |                          |                  
|Cash used for investing activities                 |          |                       |                           | (4.9                     | )                
|                                                   |          |                       |                           |                          |                  
|Financing Activities                               |          |                      
|Repayments of capital lease obligations            |          |                       |                           | (3.1                     | )                
|Proceeds from lease financings                     |          |                       |                           | 1.8                      |                  
|Borrowings under the working capital facility, net |          |                       |                           | (1.2                     | )                
|Repayments of other debt, net                      |          |                       |                           | (1.1                     | )                
|Repayments of the term loan                        |          |                       |                           | (0.2                     | )                
|Intercompany equity transactions                   |          |                       |                           | 0.2                      |                  
|                                                   |          |                       |                           |                          |                  
|Cash used for financing activities                 |          |                       |                           | (3.6                     | )                
|                                                   |          |                       |                           |                          |                  
|Increase in cash                                   |          |                       |                           | 3.9                      |                  
|Cash at beginning at period                        |          |                       |                           | 11.0                     |                  
|                                                   |          |                       |                           |                          |                  
|Cash at end of period                              |          |                       | $                         | 14.9                     |                  
|                                                   |          |                       |                           |                          |                  

10

### Pathmark Stores, Inc.

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

##### Results of Operations

The following table sets
forth selected consolidated statements of operations data (dollars in millions):

|                                             | 13 Weeks Ended
|-------------------------------------------- | --------------
|                                             |               
|                                             |               
|Sales                                        |               
|                                             |               
|Gross profit                                 |               
|Selling, general and administrative expenses |               
|Depreciation and amortization                |               
|                                             |               
|Operating earnings                           |               
|Interest expense                             |               
|                                             |               
|Earnings (loss) before income taxes          |               
|Income tax benefit (provision)               |               
|                                             |               
|Net earnings (loss)                          |               
|                                             |               

Sales. Sales in the
first quarter of fiscal 2004 were $990.1 million, down 1.5% from $1,004.7 million in the
first quarter of fiscal 2003. The sales decrease in the first quarter of fiscal 2004 was
primarily due to a 1.4% decrease in same-store sales (stores open the entire first quarter
in both fiscal 2004 and fiscal 2003, including replacement stores and enlargements) and
closed stores, partially offset by new stores. We believe sales during the first quarter
of fiscal 2004 were negatively impacted by customer resistance to price
increases caused by steep inflation in certain categories, including beef, poultry, pork,
butter and cheese as well as unproductive sales promotions. The Company operated 142
stores and 144 stores at the end of the first quarters of fiscal 2004 and fiscal 2003,
respectively.

Gross Profit. Gross
profit represents the difference between sales and cost of goods sold, which includes the
cost of inventory sold and the related purchase and distribution costs, net of vendor
allowances and rebates. Gross profit in the first quarter of fiscal 2004 was $279.4
million or 28.2% of sales compared to $285.8 million or 28.4% of sales in the first
quarter of fiscal 2003. The decrease in gross profit in the first quarter of fiscal 2004
was primarily due to lower sales, unproductive sales promotions and the inability to pass
on the full cost of increases in wholesale prices.

Selling, General and
Administrative Expenses (SG&A). SG&A in the first quarter of
fiscal 2004 was $244.6 million or 24.7% of sales compared to $246.2 million or 24.5% of
sales in the first quarter of fiscal 2003. SG&A in the first quarter of fiscal 2003
included a charge of $5.1 million related to a labor buyout program in some of our stores
and a headcount reduction program in our corporate office. Excluding this $5.1 million
charge in the first quarter of fiscal 2003, SG&A in the first quarter of fiscal 2004
increased compared to the first quarter of fiscal 2003 by $3.5 million primarily due to
higher payroll, medical and pension expenses, partially offset by lower snow removal
costs.

Depreciation and
Amortization. Depreciation and amortization in the first quarter of fiscal 2004 was
$21.5 million compared to $21.2 million in the first quarter of fiscal 2003. The increase
in depreciation and amortization expense in the first quarter of fiscal 2004 was primarily
due to an increase in related property and equipment.

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### Pathmark Stores, Inc.

Operating Earnings.
Operating earnings in the first quarter of fiscal 2004 were $13.3 million compared to
$18.4 million in the first quarter of fiscal 2003. The decrease in operating earnings in
the first quarter of fiscal 2004 was primarily due to lower sales and lower gross profit.

Interest Expense.
Interest expense was $16.5 million in the first quarter of fiscal 2004 compared to $16.9
million in the first quarter of fiscal 2003. The decrease in interest expense in the first
quarter of fiscal 2004 was primarily due to lower interest rates.

Income Tax Benefit
(Provision).The income tax benefit of $1.4 million in the first quarter of fiscal
2004 is based on an effective tax rate of 43.5% expected to be applicable for fiscal 2004.
The effective tax rate increased in the first quarter of fiscal 2004 due to the expiration
of the Work Opportunity Tax Credit (WOTC) on December 31, 2003. If pending
WOTC legislation is passed retroactive to the beginning of 2004, the effective tax rate
for fiscal 2004 would be 40.4%. The income tax provision of $0.6 million in first quarter
of fiscal 2003 was based on an effective income tax rate of 40.3%.

Summary of
Operations. The net loss of $1.8 million in the first quarter of fiscal 2004 compared
to net earnings of $0.9 million in the first quarter of fiscal 2003 was primarily due to a
decrease in operating earnings, partially offset by lower interest expenses and an income
tax benefit compared to an income tax provision in the prior years first quarter.

##### Liquidity and Capital Resources

Cash Flows. The
following table sets forth certain consolidated statements of cash flow data (in millions):

|                             | 13 Weeks Ended
|---------------------------- | --------------
|
|Cash provided by (used for): |               
|Operating activities         |               
|Investing activities         |               
|Financing activities         |               

The increase in cash
provided by operating activities was primarily due to increased collections of supplier
receivables, partially offset by higher cash interest payments related to the Senior
Subordinated Notes. The increase in cash used for investing activities was primarily due
to higher capital expenditures and the acquisition of CSC. The increase in cash provided
by financing activities was primarily due to increased borrowings under the working
capital facility.

Debt Service and
Liquidity. We have outstanding $350 million aggregate principal amount of Senior
Subordinated Notes which pay cash interest semi-annually on February 1 and August 1. The
Senior Subordinated Notes restrict our ability to declare cash dividends on our common
stock. We were in compliance with all related covenants as of May 1, 2004.

The credit agreement (the
Credit Agreement) consists of a term loan (the Term Loan) and a
$175 million revolving working capital facility (the Working Capital Facility)
(including a maximum of $125 million in letters of credit). As of May 1, 2004, borrowings
under the Term Loan and the Working Capital Facility were $45.8 million and $20.4 million,
respectively and outstanding letters of credit were $56.9 million. The Credit Agreement
contains certain covenants which, among other things, place limits on the incurrence of
additional indebtedness, issuance of cash-pay preferred stock, repurchase of Company
stock, incurrence of liens, sale-leaseback transactions, hedging activities, sale or
discount of receivables, investments, loans, advances, guarantees with affiliates, asset
sales, acquisitions, capital expenditures, mergers and consolidations, changing lines of
business, repayments of other indebtedness, amendments to organizational documents and
other matters customarily restricted in such agreements. The Credit Agreement contains
customary events of default, including without limitation, payment defaults, material
breaches of representations and warranties, material covenant defaults, certain events of
bankruptcy and insolvency, and a change of control. In addition, the Credit Agreement
prohibits the payment of cash dividends. We were in compliance with all covenants in the
Credit Agreement as of May 1, 2004.

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### Pathmark Stores, Inc.

Borrowings under the Credit
Agreement bear interest at floating rates equal to LIBOR plus an applicable margin,
subject to decrease, depending on the total debt to consolidated EBITDA ratio. Borrowings
under the Working Capital Facility and the Term Loan bear interest at rates of LIBOR +
3.5% and LIBOR + 4.5%, respectively. We are required to repay a portion of the borrowing
under the Term Loan each year, so as to retire such indebtedness in its entirety by July
15, 2007. The Working Capital Facility expires on July 15, 2005. The weighted-average
interest rate in effect on all borrowings under the Term Loan was 5.7% during the first
quarter of fiscal 2004.

As of May 1, 2004, our
remaining Term Loan balance was payable as follows (in millions):

| | Fiscal Years | PrincipalPayments
| | ------------ | -----------------
|
| | 2004         |                  
| | 2005         |                  
| | 2006         |                  
| | 2007         |                  
| |              |                  
| | Total        |                  
| |              |                  

All of the obligations under
the Credit Agreement are guaranteed by the Companys 100% owned subsidiaries, except
our nonguarantor subsidiaries, which are comprised of four 100% owned and consolidated
single-purpose entities. Each of these single-purpose entities owns the real estate on
which a supermarket leased to Pathmark is located. The obligations under the Credit
Agreement and those of the subsidiaries guaranteeing the Credit Agreement are secured by
substantially all of the Companys tangible and intangible assets including, without
limitation, intellectual property, real property, including leasehold interests, and the
capital stock in each of these subsidiaries.

We believe that cash flows
generated from operations, supplemented by the unused borrowing capacity under the Working
Capital Facility and the availability of capital lease financing will be sufficient to
provide for our debt service requirements, working capital needs and capital expenditure
program for the foreseeable future. There can be no assurance, however, that our business
will continue to generate cash flow at or above current levels or that we will maintain
our ability to borrow under the Credit Agreement. There are no credit agency
ratings-related triggers in either our Credit Agreement or in the indenture relating to
the Senior Subordinated Notes that would adversely impact the cost of borrowings, annual
amortization of principal or related debt maturities.

Market Risk. Our
financial results are subject to risk from interest rate fluctuations on debt which
carries variable interest rates. Variable rate debt outstanding under our Term Loan was
$45.8 million on May 1, 2004. On May 1, 2004, the interest rate in effect on all
borrowings under our Term Loan was 5.6%. A 1% change in interest rates applied to the
$45.8 million balance of floating-rate Term Loan debt would affect pre-tax annual results
of operations by approximately $0.5 million. Our Senior Subordinated Notes bear interest
at a fixed rate of 8.75%, and are, therefore, not subject to risk from interest rate
fluctuations.

The principal objective of
our investment management activities is to maintain acceptable levels of interest rate and
liquidity risk to facilitate our funding needs. As part of our risk management, we may use
derivative financial products such as interest rate hedges and interest rate swaps in the
future.

13

### Pathmark Stores, Inc.

Capital Expenditures.
Total investment in the first quarter of fiscal 2004 was $35.4 million,
which was comprised of capital expenditures of $22.1 million, the Acquisition for $4.5
million and capital leases of $8.8 million compared to capital expenditures of $13.0
million in the first quarter of fiscal 2003. During the first quarter of fiscal 2004, we
acquired the Newark Store, renovated four stores and closed one store. During the
remainder of fiscal 2004, we expect to open one new store and complete 16 store
renovations. Capital expenditures for fiscal 2004, including property acquired under
capital leases, the Acquisition and technology investments, are expected to be
approximately $95 million.

##### Critical Accounting Policies

Our discussion of results
of operations and financial condition relies on our consolidated financial statements that
are prepared based on certain critical accounting policies that require management to make
judgments and estimates that are subject to varying degrees of uncertainty. We believe
that investors need to be aware of these policies and how they impact our financial
statements as a whole, as well as our related discussion and analysis presented herein.
While we believe that these accounting policies are based on sound measurement criteria,
actual future events can and often do result in outcomes that can be materially different
from these estimates or forecasts. The accounting policies and related risk described in
our Annual Report on Form 10-K for the year ended January 31, 2004 are those that depend most
heavily on these judgments and estimates. As of May 1, 2004, there have been no material
changes to any of the critical accounting policies contained therein.

##### New Accounting Pronouncements

In December 2003, the FASB
issued SFAS No. 132 (revised 2003), Employers Disclosure about Pensions and
Other Postretirement Benefit, an amendment of SFAS No. 87, 88 and 106. This
statement revises employers disclosures about pension plans and other postretirement
benefit plans. It requires additional disclosures to those in the original SFAS No. 132,
Employers Disclosures about Pensions and Other Postretirement Benefits,
which it replaces, about the assets, obligations, cash flows, and net periodic benefit
cost of defined benefit pension plans and other defined benefit postretirement plans.
Effective with fiscal 2003 year-end reporting, the required information was provided
separately for pension plans and for other postretirement benefit plans. Effective with
fiscal 2004 quarterly reporting, the required information is provided separately for
pension plans and for other postretirement benefit plans for the 13 weeks ended May 1,
2004 and May 3, 2003, respectively. The adoption of SFAS No. 132 (revised 2003) did not
have an impact on our financial position or results of operations.

In May 2004, the staff of
the FASB issued FASB Staff Position (FSP) No. FAS 106-2, Accounting and
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and
Modernization Act of 2003, which superseded FSP No. FAS 106-1. This FSP provides
guidance on the accounting for the effects of the Medicare Prescription Drug, Improvement
and Modernization Act of 2003 (the Act) for employers that sponsor
postretirement health care plans that provide prescription drug benefits. This FSP also
requires those employers to provide certain disclosures regarding the effect of the
federal subsidy provided by the Act (the Subsidy). The guidance in this FSP
related to the accounting for the Subsidy applies only to the sponsor of a single-employer
defined benefit postretirement health care plan for which (a) the employer has concluded
that prescription drug benefits available under the plan to some or all participants for
some or all future years are actuarially equivalent to Medicare Part D and
thus qualify for the Subsidy under the Act and (b) the expected Subsidy will offset or
reduce the employers share of the cost of the underlying postretirement prescription
drug coverage on which the Subsidy is based. This FSP also provides guidance for the
disclosures about the effects of the Subsidy for an employer that sponsors a
postretirement health care benefit plan that provides prescription drug coverage but for
which the employer has not yet been able to determine actuarial equivalency. This FSP is
effective for the first interim period beginning after June 15, 2004. We are currently
investigating the impact of FSP No. FAS 106-2s initial recognition, measurement and
disclosure provisions on our financial statements.

14

### Pathmark Stores, Inc.

##### Forward-Looking Information

This report and the
documents incorporated by reference into this report contain both historical and
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. These statements appear in a number of places in
this report and include statements regarding our intent, belief and current expectations
with respect to, among other things, capital expenditures and technology initiatives, the
ability to borrow funds under our credit facilities, the ability to successfully implement
our operating strategies, including trends affecting our business, financial condition and
results of operations. The words anticipate, believe,
expect, forecast, guidance, intend,
may, plan, project, will and other similar
expressions generally identify forward-looking statements. While these forward-looking
statements and the related assumptions are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. These statements are based upon a number of
assumptions and estimates which are inherently subject to significant uncertainties and
contingencies, many of which are beyond our control and reflect future business decisions
which are subject to change. Some of these assumptions inevitably will not materialize,
and unanticipated events will occur which will affect our results. Some important factors
(but not necessarily all factors) that could negatively affect our revenues, growth
strategies, future profitability and operating results, or that otherwise could cause
actual results to differ materially from those expressed in or implied by any
forward-looking statement, include the following:

- changes in business and economic conditions and other adverse
conditions in our markets;
- unanticipated environmental damages;
- increased competition;
- increased labor and labor related (e.g., health and welfare  and pension) costs
and/or labor disruptions;
- reliance on third-party suppliers;
- our ability to successfully implement our operating,  marketing, renovation and
expansion strategies; and
- natural disasters.

For a discussion of these
factors, see Item I  Business  Factors Affecting Our Business and Prospects in
our Annual Report on Form 10-K for the year ended January 31, 2004.

#### Item 4. Controls and Procedures

The Companys management, with the participation of
the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the Companys disclosure controls and procedures pursuant to Rule
13a-15(b) of the Exchange Act as of May 1, 2004. Based on that evaluation, the
Companys Chief Executive Officer and Chief Financial Officer have concluded that, as
of May 1, 2004, the Companys disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company required to be
included in the Companys Exchange Act reports.

There has been no change during the Companys fiscal
quarter ended May 1, 2004 in the Companys internal controls over financial reporting
(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has
materially affected, or is reasonably likely to materially affect, the Companys
internal controls over financing reporting.

15

### Pathmark Stores, Inc.

### Part II. Other Information

#### Item 6. Exhibits and Report on Form 8-K



|1) | Exhibits:
|-- | ---------



| | 3.1: | Amended
and Restated By-Laws of the Company.
| | ---- | --------------------------------------------



| | 10.1 | Amendment
Number 1 to  Supplemental  Retirement  Agreement,  dated as of March 1, 2000,  between
the  Company and Eileen R. Scott.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------



| | 10.2 | Amendment
Number 1 to  Supplemental  Retirement  Agreement,  dated as of March 1, 2000,  between
the  Company and Frank G. Vitrano.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------



| | 31.1: | Certification
of Eileen R. Scott, under Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
| | ----- | ------------------------------------------------------------------------------------------------------



| | 31.2: | Certification
of Frank  G.  Vitrano,  under  Section  302 of the  Sarbanes-Oxley  Act of 2002,  filed
herewith.
| | ----- | ---------------------------------------------------------------------------------------------------------------



| | 32.1: | Certification
of Eileen R. Scott,  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, filed herewith.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 32.2: | Certification
of Frank G. Vitrano,  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, filed herewith.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|2) | Report on Form 8-K:
|-- | -------------------



| | On April
2, 2004, we furnished a Current Report on Form 8-K to the SEC under Item 12 containing
our press release dated April 2, 2004, attached thereto as  Exhibit 99.1.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

### Pathmark Stores, Inc.

### 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.

| |  | Pathmark Stores, Inc.
| |  | ---------------------
|
| |  | By:                  
|
| |  | By:                  

Date: June 7, 2004

17