UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549





FORM 10-K





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



For the Fiscal Year Ended January 3, 2004



OR





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



For the Transition Period From _____ to ____





Commission file number 0-13365



OshKosh B'Gosh, Inc.





|Delaware(State or other jurisdiction of
incorporation or organization)                                     |  | 39-0519915(IRS Employer
Identification Number)
|---------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                                                           |  |                                               
|112 Otter Avenue
Oshkosh, Wisconsin  54901(Address of principal executive offices)                        
|                                                                                                          
|(920) 231-8800                                                                                            
|(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:
Class A Common Stock, Par Value $.01 per share
|                                                                                                          





Indicate by check mark whether the Company (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 Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    X	    No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Company's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   [   ]

Indicate by check mark whether the Company is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes    X	              No



As of July 5, 2003, the last day of the Company's fiscal second quarter, there were outstanding 9,680,444 shares of Class A Common Stock and 2,192,961 shares of Class B Common Stock, of which 8,214,298 shares and 122,651 shares, respectively, were held by non-affiliates of the Company.  Based upon the closing sales price as of July 5, 2003, the aggregate market value of the Class A Common Stock held by non-affiliates was $232,218,204.  The Class B Common Stock is no longer listed or quoted on any established trading market, but it is convertible into Class A Common Stock on a share-for-share basis.  Based on that conversion rate, the value of Class B Common Stock held by non-affiliates was $3,467,344.

As of February 16, 2004, there were outstanding 9,559,719 shares of Class A Common Stock and 2,184,236 shares of Class B Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the OshKosh B'Gosh, Inc. Proxy Statement for its annual meeting to be held on May 4, 2004 (or such later date as the directors may determine), have been incorporated by reference into Part III.

INDEX



|          |  |                                                                                                               |                                              | Page
|--------- |  | ------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ----
|PART I    |  |                                                                                                               |                                              |     
|Item 1.   |  | Business                                                                                                      |                                              |     
|          |  | (a) General Development of Business                                                                           |                                              | 2   
|          |  | (b) Financial Information About Industry Segments                                                             |                                              | 2   
|          |  | (c) Narrative Description of Business                                                                         |                                              | 3   
|          |  |                                                                                                               | Products                                     |     
|          |  |                                                                                                               | Product Design                               |     
|          |  |                                                                                                               | Product Sourcing                             |     
|          |  |                                                                                                               | Merchandise Distribution                     |     
|          |  |                                                                                                               | Wholesale Business                           |     
|          |  |                                                                                                               | Retail Business                              |     
|          |  |                                                                                                               | International Licensing and Distribution     |     
|          |  |                                                                                                               | Trademarks                                   |     
|          |  |                                                                                                               | Seasonality                                  |     
|          |  |                                                                                                               | Working Capital                              |     
|          |  |                                                                                                               | Backlog                                      |     
|          |  |                                                                                                               | Competitive Conditions                       |     
|          |  |                                                                                                               | Environmental Matters                        |     
|          |  |                                                                                                               | Business Risks                               |     
|          |  |                                                                                                               | Employees                                    |     
|          |  | (d)                                                                                                           | Financial Information About Geographic Areas |     
|          |  | (e)                                                                                                           | Available Information                        |     
|          |  |                                                                                                               |                                              |     
|Item 2.   |  | Properties                                                                                                    |                                              | 11  
|Item 3.   |  | Legal Proceedings                                                                                             |                                              | 11  
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                                           |                                              | 11  
|          |  |                                                                                                               |                                              |     
|PART II   |  |                                                                                                               |                                              |     
|Item 5.   |  | Market for the Company's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |                                              | 12  
|Item 6.   |  | Selected Financial Data                                                                                       |                                              | 13  
|Item 7.   |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                         |                                              | 13  
|Item 7A.  |  | Quantitative and Qualitative Disclosures About Market Risk                                                    |                                              | 22  
|Item 8.   |  | Financial Statements and Supplementary Data                                                                   |                                              | 26  
|Item 9.   |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                          |                                              | 39  
|Item 9A.  |  | Controls and Procedures                                                                                       |                                              | 39  
|          |  |                                                                                                               |                                              |     
|PART III. |  |                                                                                                               |                                              |     
|Item 10.  |  | Directors and Executive Officers of the Registrant                                                            |                                              | 39  
|Item 11.  |  | Executive Compensation                                                                                        |                                              | 39  
|Item 12.  |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                |                                              | 40  
|Item 13.  |  | Certain Relationships and Related Transactions                                                                |                                              | 40  
|Item 14.  |  | Principal Accountant Fees and Services                                                                        |                                              | 40  
|          |  |                                                                                                               |                                              |     
|PART IV.  |  |                                                                                                               |                                              |     
|Item 15.  |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                              |                                              | 40  
|          |  | Signatures                                                                                                    |                                              | 41  
|          |  | Exhibit Index                                                                                                 |                                              | 42  
|          |  | Financial Statement Schedule                                                                                  |                                              | 43  



PART I

ITEM 1.	BUSINESS

(a)	General Development of Business

OshKosh B'Gosh, Inc. (together with its subsidiaries, the "Company") was founded in 1895 and was incorporated in the state of Delaware in 1929.  The Company designs, sources and markets apparel primarily for the children's wear and youth wear markets. While its heritage began in the men's work wear market, the Company is currently best known for its line of high quality children's wear.  It is the Company's vision to become the dominant global marketer of branded products for children ages newborn to ten while also pursuing opportunities in lifestyle adult apparel, leveraging our rich heritage of workwear and heartland American spirit.  This concept will be further developed in 2004, as the Company introduces The OshKosh Company Store - family lifestyle retail stores carrying a collection of OshKosh apparel for both adults and children, as well as items for the home.

The success of the children's wear business can be attributed to the Company's core themes: quality, durability, style, trust and its heartland image.  These themes have propelled the Company to the position of a market leader in the branded children's wear industry.  The Company strategically extends the product line and also leverages the economic value of the OshKosh B'Gosh name via both domestic and international licensing agreements, including a sub-brand, Genuine Kids from OshKosh, that was introduced in Target stores as a licensed product in the third quarter of 2003.

The Company's comprehensive strategic planning initiative guides the Company's business focus. Under this initiative, combined with management's commitment to efficiently utilize working capital, the Company continues to take steps to improve its product value proposition, by revitalizing the OshKosh brand, while maintaining its cost structure.  These actions include analysis of product extensions, commitment to the wholesale customer base, strategic retail growth, periodic review of significant licensee arrangements and continued development of an effective global sourcing strategy.

The Company designs and sources substantially all of its OshKosh B'Gosh and related trademark apparel products marketed and sold in the United States.  Company designers develop fabrication, trim accessories and detailed manufacturing specifications.  The product is then manufactured according to detailed Company specifications and production schedules at third-party contractor locations worldwide or in Company-operated manufacturing facilities.  Product sourcing is based predominantly on manufacturing capacity, quality and lead times, in addition to cost and capabilities of specific manufacturing facilities.

The Company leverages its name and brand equity into a wide variety of children's products including children's apparel accessory items such as socks, sleepwear, footwear and outerwear, as well as non apparel brand extensions including eyewear, bedding and other nursery décor and juvenile products including car seats, strollers, books and luggage. The Company regularly reviews the seasonal offerings of all related products both locally and internationally for consistency, brand image and quality.  The Company earns royalties for use of its name on children's and men's wear products throughout the world, and from related accessories distributed in the United States and worldwide.

The Company successfully leverages its design talent and overall brand recognition through use of the Genuine Kids from Oshkosh sub-brand.   Company personnel design Genuine Kids product, including fabrication, trim accessories, use of screen prints or embroidery and manufacturing design specifications.   This product design package is provided to Target to arrange for the product sourcing.  While the Company is responsible for the design element, the Company does not currently source or arrange for the manufacture of this product.

(b)	Financial Information About Industry Segments

The Company designs, sources and markets apparel products using primarily the OshKosh B'Gosh brand.  The apparel products are marketed in two distinct distribution channels:  domestic wholesale and through Company-owned retail stores.  The Company designs and sources product to meet the needs of these distribution channels through a single procurement business unit.

The Company manages its business operations by periodic analysis of business unit operating results.  For this purpose, domestic wholesale, retail and procurement are separately identified for management reporting and are considered business segments.  Licensing activities are currently combined in the "All Other" category.  See Note entitled "Segment Reporting" in the Notes to the Consolidated Financial Statements for additional information about the Company's business segments.

(c)	Narrative Description of Business

Products

The Company designs, sources and markets a broad range of children's clothing as well as lines of youth wear under the OshKosh(Registered), OshKosh B'Gosh(Registered), Genuine Girl(Registered) and Genuine Blues(Registered) labels. The Company's product line includes OshKosh B'Gosh branded product in sizes from newborn to girls 6X and boys 7, and youth wear for girls and boys under the trade names Genuine Girl (girls sizes 7-16) and Genuine Blues (boys sizes 8-20).  The Company's product offering also includes an assortment of mens and womens products which are only sold through Company-owned retail stores and its internet site.  All other products are distributed primarily through department and specialty stores, Company-owned retail stores, the internet and foreign retailers.

The children's wear and youth wear business is targeted to reach the middle to upper middle segment of the sportswear market through the use of innovative designs, quality fabrics and classic styling.  The Company believes that its trade name is a valuable asset in the marketing of its apparel, signifying classic design and high quality construction.  The Company tradename and trademarks are generally displayed on OshKosh product or on the hang tags accompanying the product on the retail shelves.

The Company's children's wear and youth wear business includes a broad range of product categories, which are offered in two main groups:  Fashion and Replenishment.  The Fashion group is organized primarily in a collection format of seasonal themes, developed by an in-house product development staff. The products in a collection share a primary design theme which is carried out through fabric design and the distinctive use of colors, screenprint, embroidery and trim applications.  These collections are generally presented as three to five small groups within each merchandising season. During 2002, the Company revitalized its design effort by assembling an experienced and talented new design team in New York.  This team is bringing new luster to our product offering to reinforce our reputation for style and quality and has had complete responsibility for designing the Company's Holiday 2003 and subsequent seasons' fashion offerings.

The Company also offers a Replenishment product line, consisting primarily of staple denim products with multiple wash treatments and coordinating garments. This product line is developed to be somewhat less seasonal, with signature OshKosh B'Gosh classic styling.  These styles are available to retailers for replenishment throughout the year.  Some Replenishment items are also designed to serve as a foundation for the Fashion group, with seasonal colors and styles to complement the Company's Fashion product offering.

Product Design

The Company made a strategic change to revitalize its design efforts in 2002.  The Company opened a new design studio in New York City's SoHo neighborhood that allows the newly assembled design team direct access to the more creative and compelling trends in children's wear.  This design team is responsible for identifying trends in the apparel industry which can be translated into fresh fashion-relevant designs for our children's wear product, expanding the Company's presence as a premier Heartland/Traditional lifestyle brand.

Once the design direction has been established by the creative design team, the OshKosh-based product development group is responsible for fabric development, pattern design, consistency of the merchandising plan with the Company's wholesale and retail customers and consideration of the financial viability of each product design.  The merchandising process includes a detailed review of historical business performance by type of product, and considers the current style trends and creative designs developed by the design team.  The product development team also works closely with the Company's sourcing department to identify cost-effective production capabilities for the manufacture of this product, while meeting Company quality and manufacturing specifications.

In selecting fabric and prints for its products, the Company seeks, where possible, to obtain exclusive rights to unique fabric designs from its suppliers in order to provide the Company, for a limited period of time, with some protection from imitation by competitors.

Product Sourcing

Substantially all of the Company's product line was sourced from numerous third-party contractors throughout the world and off-shore Company-operated facilities in accordance with the Company's specifications. Due in part to import duty regulations under the North American Free Trade Act, the United States-Caribbean Basin Trade Partnership Act and the African Growth and Opportunity Act, the Company takes a global view of its entire manufacturing process. The North American Free Trade Act, the United States-Caribbean Basin Trade Partnership Act and the African Growth and Opportunity Act, have significantly reduced the requirements that certain manufacturing processes be performed in the United States to receive preferential duty treatment.   The Company utilizes contractors outside of the U.S. with expertise in any of the five major manufacturing functions -- cutting fabric, screenprinting, embroidery, sewing and finishing. These offshore manufacturing facilities include Company-operated facilities in Mexico and in Honduras, as well as unrelated third-party contractors. In 2003, approximately 28% of the Company's sourced units were from these Company-operated offshore facilities, with the remaining units sourced from third-party contractors.  Approximately 28% of total units sourced from unrelated contractors in 2003 were from the Company's largest five contractors, with the largest contractor accounting for approximately 7% of total units sourced.

For product sourced in Mexico or Central America, the Company generally arranges for the purchase of necessary raw materials. All raw materials used in the manufacture of Company products are purchased from unaffiliated suppliers.  The Company purchases its raw materials directly for its manufacturing facilities and may also procure and retain ownership of fabric related to garments cut and assembled by contract manufacturers.  In other circumstances, fabric is procured by the contract manufacturer directly but in accordance with the Company's specifications.  In 2003, approximately 56% of the Company's direct expenditures for raw materials (fabric) were from its five largest suppliers, with the largest such supplier accounting for approximately 19% of total raw material expenditures.  Fabric and various non-fabric items such as thread, zippers, rivets, buckles and snaps are purchased from a variety of domestic and foreign sources based on quality, pricing and availability.  The fabric and accessory market in which OshKosh B'Gosh purchases its raw materials is composed of a substantial number of  suppliers with similar products and capabilities, and is characterized by a high degree of competition.  As is customary in its industry, the Company has no long-term contracts with its suppliers.  To date, the Company has experienced little difficulty in satisfying its requirements for raw materials, considers its sources of supply to be adequate and believes that it would be able to obtain sufficient raw materials should any one of its product suppliers becomes unavailable.

The Company has established guidelines for each of its third-party manufacturers in order to monitor product quality, labor practices and financial viability.  These guidelines include on-site facility evaluations for all new suppliers, an expectation that the third-party manufacturers become WRAP certified and allow for random on-site facility inspections to observe working conditions.  The Company also employs agents based in regional locations abroad to monitor compliance with design specifications and quality standards. The Company has a quality department which is responsible for reviewing product manufacturing processes at third-party contractor locations, periodically observing working conditions and reviewing the quality of incoming products at the Company's distribution center.  This quality team is responsible for ensuring that all product arriving at the distribution center meets the Company's strict quality standards.The Company believes that its overall global manufacturing strategy gives the Company reasonable flexibility to properly balance the need for timely shipments, high quality products and competitive pricing.

While no long-term formal arrangements exist with its third-party manufacturers, the Company considers these relationships to be satisfactory.  The Company believes it could, over a period of time, obtain adequate alternative production capacity if any of its independent manufacturers becomes unavailable.  As part of the Company's product sourcing strategy, it routinely contracts for apparel products produced by contractors in Asia, Mexico and Central America and has also used contractors in Europe and Africa.  If financial, political or other related difficulties were to adversely impact the Company's contractors in these regions, it could disrupt the supply of products contracted for by the Company.  A sustained disruption of such sources of supply could, particularly on a short-term basis, have an adverse impact on the Company's operations.

Because higher quality apparel manufacturing is generally labor intensive (sewing, pressing, finishing and quality control), the Company and its contract manufacturers have continually sought to take advantage of time saving technical advances in areas like computer-assisted design, computer-controlled fabric cutting, computer evaluation and matching of fabric colors, automated sewing processes and computer-assisted inventory control and shipping. Quality control inspections of both semi-finished and finished products are required at manufacturing locations to assure compliance.

Customer orders for Fashion products are booked from three to six months in advance of shipping.  Because a majority of the Company's production of styled products is scheduled to fill orders already booked, the Company believes that it is better able to plan its production and delivery schedules than would be the case if production were in advance of actual orders.  In order to secure necessary fabrics on a timely basis and to obtain manufacturing capacity from independent suppliers, the Company must, in certain instances, make substantial advance commitments prior to receipt of customer orders.  Inventory levels therefore depend on Company judgment of market demand.

Merchandise Distribution

The Company's product is primarily shipped in ocean containers arriving at a variety of ports in the United States.  From these ports, it is shipped via rail or truck to the Company's distribution centers located in White House, Tennessee and Liberty, Kentucky.  Contract manufacturers have specific shipping windows in which the product must be made available for ocean cargo to help ensure receipt at the distribution center in time for shipment of each month's product collection.  This shipping schedule allows the Company to rely primarily on lower cost ocean freight transportation of product to the United States.

The Company's product clears customs upon entry into the United States.  Upon receipt in the warehouse, product is stored until called for by the Company's warehouse management system.  This warehouse management system matches outstanding customer purchase orders with available product to most efficiently support the Company's distribution process.

A significant portion of product destined for the Company's retail stores is sent directly to the Company's retail distribution center in Liberty, Kentucky in pre-packs for immediate distribution to the retail store.  This pre-pack of product from the factory results in a reasonably efficient distribution network to the Company's retail stores.  Additional orders are picked from available stock through the Company's warehouse management system in its White House, Tennessee facility.

Wholesale Business

In 2003, the Company's products were sold to approximately 400 wholesale customers with over 4,100 retail store locations throughout the United States.  The Company's wholesale customers included national chain retailers (Kohl's, Kids R Us, JC Penney, Mervyn's and Babies R Us), national department stores (May Company, Federated Department Stores and Saks Inc.), regional department stores and specialty stores.  National chain retailers and national department stores accounted for approximately 66% of the Company's wholesale unit shipments.

The Company's broad distribution base insulates the Company from reliance on any one customer. While no single customer accounted for more than 10% of the Company's 2003 total net sales, the Company's largest ten and largest 100 customers accounted for approximately 34% and 39% of 2003 total Company sales, respectively.

The Company maintains an active marketing program aimed at both wholesale accounts and ultimate consumers, with a main goal of increasing overall brand awareness.  A national marketing program includes advertising in both consumer and trade publications, local cooperative advertising, promotions and in-store merchandising.

The Company's sales force has been restructured to meet the demands of its customer base.  A centralized sales management team focuses on the unique requirements of each major customer.  The Company's sales force is supported by a product planning team located in Oshkosh that monitors current product sell-through as a basis for future demand planning at the account level.  This type of planning helps to ensure that the proper product will be placed with the correct customer at the optimum time to increase sell-through.  This sales planning process also lends discipline and accuracy to the forecasting required for raw material commitments and production capacity.

Retail Business

The Company currently operates 165 retail stores under four formats: factory outlet stores, showcase stores, strip mall stores and Lifestyle stores.   The Company operates 157 domestic factory outlet stores located throughout the United States in outlet malls.  These stores carry a wide assortment of OshKosh product that is consistently value-priced.  The two showcase stores are full service stores featuring a comprehensive line of OshKosh B'Gosh product in a signature environment designed to convey the total OshKosh image and build brand recognition among customers. The Company also operates five strip mall stores.  These strip mall stores feature a large selection of OshKosh B'Gosh products that are consistently value-priced.  During the fourth quarter of 2003, the Company opened its first childrens only family lifestyle store.  Further development of this concept will take place in 2004.

The Company maintains an e-commerce site (www.oshkoshbgosh.com), offering a comprehensive collection of the Company's current product at pricing comparable to its outlet stores.  The Company is also affiliated with Amazon.com as an alternative e-commerce location.

In evaluating potential retail store sites, the Company generally looks for 4,000-6,000 square foot locations in factory outlet centers or lifestyle centers across the country.  The Company considers the surrounding trade area, location and visibility of the center, placement of the store within the center, tenant mix, performance of other tenants if the center has already opened, landlord reputation and the economic terms of the lease in making a determination of new store locations. The Company also considers lease renewals based on similar factors, in addition to its own performance in the location.  The Company generally commits to five-year lease terms on its retail store leases across the country.

The Company's retail store strategy includes having a substantial collection of the Company's product offering available in all size ranges to meet the needs of our consumers.  The retail store environment is designed for easy access for a mother with children, and displays the Company's fashion offerings along with classic products.  Products are priced to clearly demonstrate the value proposition of obtaining the OshKosh B'Gosh product in an outlet environment.  The Company's retail staff focuses on customer service to provide a level of assistance a shopper is requesting, with an aim of both satisfying the shopper and increasing the potential sale of coordinating pieces to enhance the Company's sales.  Staff levels at stores are carefully monitored and correlated with anticipated sales to provide a cost efficient level of staffing in the store at all times with suitable sales staff available to assist all shoppers.

Family lifestyle stores will further develop the Brand's image as a heartland, family brand through a unique, pleasant, back to the basics store atmosphere that includes the use of picnic tables, wash boards, wardrobes, and other frequently updated store props to create a well organized and pleasant retail shopping atmosphere.   Family Lifestyle stores will include childrens and  adult apparel, as well as home accessories in product categories where the OshKosh label provides value.  Family lifestyle stores will focus on customer service to convert customers' pleasant shopping experiences into product sales.

The Company spends considerable effort on the visual presentation of its products.  The products are neatly and carefully displayed on retail fixtures to provide a positive brand image to the consumer.  The Company uses a retail prototype directing the layout of each retail store so that every store across the country will have an inviting and pleasant appearance.  The Company ensures that the retail store facilities are well-maintained to enhance the brand presentation.  The Company also uses appropriate signage, graphics and other point of sale displays to highlight the Company's product offering on a seasonal basis.

The combination of a complete product offering, a pleasant store environment and an appropriate level of customer service creates the environment for enhanced success of a fashion-right product that is sold with a proper value equation to the primary consumer, a mother age 28-44. The Company's return and exchange policy eases the return process when the purchase of apparel does not meet the size requirements of the intended user.

International Licensing and Distribution

The Company's products are distributed worldwide through approximately 32 licensees and distributors in over 50 countries.  Licensing and distribution agreements allow the Company to develop international markets without the need to maintain a capital commitment in localized warehousing, offices, personnel and inventory.

The Company provides design assistance to its licensees to ensure products are appropriate to each foreign market and consistent with the Company's brand image.  The licensees and distributors may purchase finished product directly from the Company, manufacture their own product or contract the production of the product from third-party manufacturers.  Each licensee and distributor is responsible for the marketing and distribution of specific product categories within defined regions specified in the licensing or distribution agreement.  Distribution must be through marketing channels consistent with the Company's domestic operations and as approved by the Company.  The Company also provides advertising guidelines and support in the development of localized marketing programs.

Trademarks

The Company utilizes the OshKosh(Registered), OshKosh B'Gosh(Registered), Genuine Girl(Registered), Genuine Blues(Registered) or Genuine Kids(Registered) trademarks on most of its products.  Other significant trademarks include a white triangular patch on the back of bib garments and the Genuine Article(Registered).  The Company currently has approximately 37 trademark registrations and 42 pending trademark applications in the United States and has trademark registrations in approximately 115 countries outside the U.S.  These trademarks and awareness of the OshKosh B'Gosh name are significant in marketing the products.  Therefore, it is the Company's policy to vigorously defend its trademarks against infringement under the laws of the U.S. and other countries.  The Company is not aware of any current material infringement.

Seasonality

Products are designed and marketed primarily for four principal selling seasons:

|RETAIL 
SALES SEASON | PRIMARY 
BOOKING PERIOD | SHIPPING PERIOD   
|-------------------- | ----------------------- | ------------------
|                     |                         |                   
|                     |                         |                   
|Spring               | August-September        | December-March    
|Summer               | October-November        | April-May         
|Fall/Back-to-School  | January-February        | June-August       
|Winter/Holiday       | April-May               | September-November

The Company's business is increasingly seasonal, with highest sales and income in the third quarter, which is the Company's peak wholesale shipping period and a major retail selling season at its retail stores.  The Company's second quarter sales and income are the lowest because of both relatively low domestic wholesale unit shipments and relatively modest retail store sales during this period.  The Company anticipates this seasonality trend to continue to impact 2004 quarterly sales and income.

Working Capital

Working capital needs are affected primarily by inventory levels, outstanding accounts receivable, trade payables and the level of other current liabilities. The Company's unsecured credit agreement with a number of banks provides a $75 million revolving credit facility available for general corporate purposes, including cash borrowings and issuances of letters of credit. The revolving credit facility expires October 28, 2004.  The Company intends to renew this revolving credit before its expiration.  There were no outstanding borrowings against the revolving credit arrangement at January 3, 2004.

Inventory levels are affected by order backlog and anticipated sales.  Accounts receivable are affected by payment terms offered.  It is general practice in the apparel industry to offer payment terms of ten to sixty days from date of shipment.  The Company generally offers net 30 day terms.

The Company believes that its working capital requirements and financing resources are comparable with those of other major, financially sound, like-sized apparel companies.

Backlog

As of the end of 2003, the Company had outstanding customer orders of approximately $44 million, compared to approximately $65 million of such orders at the end of 2002.  These amounts include orders that are confirmed or based on industry practice and prior experiences will be confirmed.  The amount of outstanding customer orders at a particular time is influenced by numerous factors, including the product mix, timing of the receipt and processing of customer orders, shipping schedules for the product and specific customer shipping windows.  Due to these factors, a comparison of outstanding customer orders from period to period is not necessarily meaningful and may not be indicative of eventual actual shipments.

Competitive Conditions

The children's apparel industry is highly competitive and consists of a number of branded products in addition to private labels.  The Company's primary branded competitors include Carters, Healthtex, Baby Gap, Gap Kids, Gymboree, Old Navy, The Children's Place and Disney licensed apparel products, in addition to private label product offerings carried by certain retailers, including our customers.

A characteristic of the apparel industry is the requirement that a marketer recognize fashion trends and adequately provide products to meet such trends.  Competition within the apparel industry is generally in terms of consumer brand recognition, quality, price, service and style.  The Company is focusing attention on each of these issues and has taken, and will continue to take steps to reduce costs, become more competitive in the eyes of value conscious consumers and deliver the service expected by its customers while maintaining the quality, style and consumer recognition our product is known for.

The Company's share of the overall children's wear market is quite small.  This is due to the diverse structure of the market where there is no truly dominant producer of children's garments across all size ranges and garment types.  The Company believes that in its primary channel of wholesale distribution, department and specialty stores, it holds the largest share of the branded children's wear market.

Environmental Matters

The Company's compliance with Federal, State and local environmental laws and regulations in recent years had no material affect upon its capital expenditures, earnings, or competitive position.  The Company does not anticipate any material capital expenditures for environmental control in either the current or succeeding fiscal years.

Business Risks

The following discussion highlights some of the risks that affect the financial success of the Company.  Because it is not possible to determine the impact of these factors or changes in these factors, these risks and uncertainties may affect the Company's operating results in future periods.

Brand Risks

Wholesale customer and consumer tastes and preferences, along with fashion trends, will affect the acceptance of our product in the market place.

The OshKosh B'Gosh brand has represented quality, style and a proper value proposition to its consumers for over a century.  We believe that continued success depends on our ability to deliver trend-relevant merchandise that embodies the OshKosh brand essence, and provides a unique and compelling value proposition for our consumers in the Company's distribution channels.  The Company conducts its design activities from a design studio in New York.  There can be no assurance that the demand for OshKosh B'Gosh product will not decline, or that we will be able to successfully evaluate and adapt our product to be aware of fashion trends in addition to wholesale customer and consumer preferences.  A decline in the demand for our product would have a material adverse affect on our business, financial position and results of operations.

The Company's licensing income is greatly impacted by the Company's brand reputation.

The Company's brand image as a consumer product with outstanding quality and name recognition makes it valuable as a license source.  The Company is able to license complementary products and obtain license income from use of the OshKosh, OshKosh B'Gosh and related trademarks.  The Company is able to obtain substantial amounts of foreign license income as the OshKosh label carries an international reputation for quality and American style.  While the Company takes significant steps to ensure the reputation of its brand is maintained through its license agreements, there can be no guarantee the Company's brand image will be enhanced or potentially be deteriorated through its association with products outside of the core OshKosh B'Gosh apparel products.

The Company's reputation may be severely harmed if contractors used to manufacture its clothing engage in practices that our consumers believe are unethical.

The Company regularly uses contractors located outside the United States.  Accordingly, the labor laws and business practices in these countries may vary from those generally accepted in the United States.  The Company requires its independent manufacturers to operate their businesses in compliance with local laws and regulations. However, due to their status as independent manufacturers, the Company cannot assure compliance with applicable local laws and cannot be certain that these laws are not different than those generally accepted in the United States.  The Company could experience negative publicity as a result of media attention focused on international apparel manufacturing operations.  Any negative publicity received by the Company could have a detrimental impact on its net sales and results of operations.

The Company licenses the Genuine Kids from OshKosh(Registered) label exclusively to Target(Registered).

The Company has licensed the Genuine Kids from OshKosh label exclusively to Target, for use in Target stores.  The license agreement makes the Company responsible for substantially all design activities and Target responsible for sourcing and sales of this product in its stores.  Due to the exclusive nature of this arrangement, the Company is dependent on the results of the sourcing, distribution and product presentation processes, which are done by Target.  Further, the overall retail traffic and acceptance of this product offering by Target shoppers will have a significant impact on the Company's royalty income.

Sales Risks

The Company's wholesale distribution channel is dependent upon a number of key wholesale accounts.

The Company sells its products to a number of department stores, including Kohl's, Babies R Us, JC Penney, May Co., Mervyn's and Federated Department Stores.  The success of the Company's wholesale business is, in part, aligned with the success of these retailers and the levels of customer traffic in these department stores.  While the Company believes that its target consumers will stay aligned with target customers of these department stores, further prospects for growth of the Company's wholesale business depend upon the success of these companies. The inability of these distribution channels to grow or achieve sales targets for the Company's products may have a significant material adverse affect on the Company's sales and results of operations.

There are deflationary pressures on the selling price of apparel products.

In part due to the actions of discount retailers, and in part due to the worldwide supply of low cost garment sourcing, the average selling price of children's apparel continues to decrease.   To the extent these deflationary pressures are offset by reductions in manufacturing costs, there is modest affect on the gross margin percentage.  However, the inability to leverage certain fixed costs of the Company's design, sourcing, distribution, and support costs over a smaller gross sales base could have an adverse impact on the Company's operating income.

Our business is sensitive to overall levels of consumer spending, particularly in the apparel segment.

The Company believes that spending on children's apparel is somewhat discretionary.  While certain apparel purchases are less discretionary due to size changes as children grow, the amount of clothing consumers desire to purchase, specifically name brand apparel products, is impacted by the overall level of consumer spending.  Overall economic conditions that affect discretionary consumer spending include employment levels, business conditions, tax rates, interest rates, overall levels of consumer indebtedness and other factors that affect consumer spending.  Reductions in the level of discretionary spending or shifts in consumer spending to other products may have a material adverse affect on the Company's sales and results of operations.

The children's wear apparel business is highly competitive.

The children's apparel segment of the retail business is highly competitive.  There are a number of brands, including Baby Gap, Gap Kids, The Children's Place, Gymboree, Carters, Healthtex, Old Navy, Disney licensed apparel products and a variety of private label brands that compete with our product offering in the higher quality department store market.  There are also a number of competitors in the private label and discount channels that indirectly compete with the Company's product.  Increased competition may reduce our sales and gross margins, therefore impacting our Company's operating results.

The Company's sales are seasonal with the Fall/Back-to-School season as the key selling season.

A significant amount of our retail sales and shipments to wholesale customers for the Fall/Back-to-School season occur in the months of July, August and September.  Changes in consumer spending or buying habits during key marketing periods could have a major impact on the Company's profitability.  Consumer spending during any season may be influenced by weather conditions.  For example, if the country were to experience unseasonably warm weather during the Fall/Back-to-School season, consumers may reduce their purchases of heavier and long-sleeve apparel.  If the Company's product offering for a particular season was not well received due to consumer spending factors unforeseen by the Company, the Company would have a substantial increase in obsolete product which would require significant markdowns out of season.  If the Company was unable to meet its forecasted sales levels for the Fall/Back-to-School season, this would have a material affect on the Company's sales, gross margin and results of operations for the year.

Gross Margin Risks

The Company's gross margins are influenced by the success of its wholesale customers.

The retail industry is rapidly evolving due to the influences of discount retailers.  As consumers place pressure on department store retailers to deliver quality products at a discount from traditional selling prices, the retailers' margins are adversely affected.  The retailers, in turn, are placing significant pressure on their suppliers to support their margins through price discounts and negotiated margin support agreements.  The Company is under constant pressure to support its wholesale customers, which causes the Company's gross margin to be reduced.  The Company's ability to withstand these influences continues to relate to its ability to deliver market-right product at competitive selling prices.  If the Company is unable to offer market-right product at compelling retail prices, the Company's margin and operating results will be adversely impacted.

The Company must continue to reduce the cost of it products.

Due to the impact of deflationary pressure on selling prices, the Company must continue to reduce or control the cost of sourcing or manufacturing its products.  The cost of apparel products is influenced by many factors, including raw material cost (especially cotton), the availability of quota to access certain low cost global markets, the transportation infrastructure to import garments manufactured overseas, and the labor cost in worldwide labor markets. If any of these costs were to increase, the Company would find it difficult to increase its selling price to maintain its gross margin, resulting in reduced operating income.

The Company's products are imported into the United States in accordance with international trade and U.S. customs procedures.

The Company is dependent upon a variety of seaports for the importation of the Company's products, and is responsible for compliance with procedures established by U.S. customs for the importing of products.  Changes in U.S. customs procedures concerning the importation of apparel products could have a material adverse impact on the Company's ability to utilize its global sourcing matrix.  Further, the complications and stringent regulations that may be developed as part of the Homeland Security Program may result in delays or further costs in importing the Company's products.  Unforeseen delays in customs clearance of any goods could have material adverse impact on our ability to deliver shipments in accordance with customer shipping specifications, resulting in material adverse affects on the Company's sales and profitability.

The majority of the Company's products are sourced outside of the United States. This sourcing matrix creates risks associated with international business.

The Company routinely sources its product in Asia, Mexico, Central America, and to a lesser degree, other areas of the world.  Due to the inability of the Company to forecast or control these countries' political environments, labor climates or infrastructures, there is inherent risk associated with this product sourcing plan.  Our business is subject to risks associated with foreign international business, including foreign governmental regulation and intervention, foreign currency fluctuation, social or political unrest, natural disasters, health and disease management, shipping and customs clearance in foreign countries and in the U.S., local business practices and economic conditions in countries outside of the United States. If any of these factors hinder the Company's ability to obtain products on a timely basis, there could be a significant disruption in the Company's operations.

The Company is dependent upon a global transportation network to import its products.

Since the majority of the Company's products are imported, the Company is dependent upon a fleet of international ocean carriers to deliver product on a timely basis.  If this global transportation matrix were to be disrupted by factors such as a port strike, world trade restrictions or war, the Company would be unable to timely receive product sourced overseas.  This could have a material adverse affect on the Company's sales and results of operations.

Operating Risks

The Company's retail success and future growth is dependent upon identifying locations and negotiating appropriate lease terms for retail stores.

The Company's retail stores are located in leased retail locations across the country.  Successful operation of a retail store depends in part on the overall acceptance of the retail location to attract a customer base sufficient to make store sales volume profitable.  If the Company is unable to identify new retail locations with anticipated consumer traffic sufficient to support a profitable sales level, retail growth may consequently be limited.  This risk is magnified as the Company explores new retail venues with its Family Lifestyle concept stores.  Further, if existing outlet centers do not attract a sufficient customer base to obtain a reasonable sales volume, that could have a material adverse impact on the Company's sales, gross margin and results of operations.  Further, the Company invests in an initial build out at these retail locations. If the Company determined that a certain retail store location was not successful, additional impairment of the retail build out and related fixtures may be necessary to reflect the reduced ongoing market value of these improvements.  This would have an adverse affect on the Company's results of operations and financial position.

The Company's success is dependent upon retaining key individuals within the organization to execute the Company's strategic direction.

The Company's ability to attract and retain qualified design, sourcing and sales personnel, executive management and support function staff is key to the Company's success.  If the Company were unable to attract and retain qualified individuals in these areas, an adverse impact on the Company's growth and results of operations may result.

The Company has made significant financial commitments to the development of the Oshkosh Company Store, its family lifestyle concept.

In conjunction with the rollout of its family lifestyle concept store, the Company has made financial commitments including dedicated personnel, product design activities, leasehold commitments, and retail store build out costs.   If this venture is not successful and the Company decides to curtail further development of this concept, the value of certain assets might be impaired and certain financial commitments will remain, having an adverse impact on operating profit.

Employees

At January 3, 2004, the Company employed approximately 4,690 persons.  This includes approximately 1,500 production employees at the Company's manufacturing facilities in Mexico and Honduras, and 700 full time and 1,500 part-time retail store sales associates. Approximately 10% of the Company's personnel are covered by collective bargaining agreements with the United Food and Commercial Workers Union.

(d)	Financial Information About Geographic Areas

Substantially all of the Company's sales are to customers located in the United States.  As more fully described in the "International Licensing and Distribution" section of this report, the Company does export its product on a limited basis, and obtains licensing income from licenses throughout the world.  OshKosh B'Gosh product is available in over 50 countries under this network of licensing and distribution agreements.

(e)	Available Information

The Company maintains a website with the address www.oshkoshbgosh.com.  The Company is not including the information contained on the Company's website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K.  The Company makes available free of charge (other than an investor's own Internet access charges) through its website its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, director and officer reports on Forms 3, 4 and 5 and amendments to these reports, as soon as reasonably practicable after the Company electronically files such material with, or furnishes such material to, the Securities and Exchange Commission.

ITEM 2.	PROPERTIES

|                                                                                                                                                                            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Location                                                                                                                                                                    
|                                                                                                                                                                            
|Albany, KY
Celina, TN
Choloma, Honduras (2)
Gainesboro, TN
Liberty, KY
New York City, NY (1)
New York City, NY (4) 
Oshkosh, WI
Oshkosh, WI
Uman, Mexico (3)
White House, TN
|                                                                                                                                                                            

All properties are owned by the Company with the exception of:

1. Lease expiration date--2007, (2) Lease expiration date--2006, (3) Lease expiration date--2006, (4) Lease expiration date--2008.

A portion of the 128,000 square foot Oshkosh, WI facility was occupied under a short-term lease.  This facility was sold in early 2004.

The Company believes that its properties are well maintained and its manufacturing and distribution equipment is in good operating condition and adequate for current production and distribution requirements. The Company's retail store locations are leased with lease terms  generally in the range of five to seven years, frequently with renewal options.  The Company's retail stores have an average size of approximately 5,000 square feet.  These leasehold interests are generally well suited for the Company's retail operations. For information regarding the terms of the leases and rental payments thereunder, refer to the note to the consolidated financial statements of this Form 10-K entitled "Leases".

ITEM 3.	LEGAL PROCEEDINGS

The Company is subject to various legal actions and proceedings in the normal course of business.  Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, management does not believe the final outcome will have a significant effect on the consolidated financial statements.

ITEM 4. 	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5.	MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Quarterly Common Stock Data

|                    
|--------------------
|                    
|                    
|                    
|                    
|                    
|                    
|Class A Common Stock
|1st                 
|2nd                 
|3rd                 
|4th                 
|                    
|Class B Common Stock
|1st                 
|2nd                 
|3rd                 
|4th                 
|                    



The Company's Class A common stock trades on the Over-The-Counter market and is quoted on NASDAQ under the symbol GOSHA.  The table reflects the "last" price quotation on the NASDAQ National Market System and does not reflect mark-ups, mark-downs, or commissions and may not represent actual transactions.  The Company's Class B common stock is not publicly traded, but it is convertible into Class A common stock on a one-for-one basis.

As of February 16, 2004, there were approximately 5,500 Class A common stock beneficial owners and shareholders of record and approximately 200 Class B common stock beneficial owners and shareholders of record.

Issuer Purchases of Equity Securities

|Period                                    | Total
Number of 
Shares
Purchased | Average 
Price Paid
 per Share | Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs | Maximum
Number of 
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs
|----------------------------------------- | --------------------------------- | ------------------------------ | -------------------------------------------------------------------------------- | -------------------------------------------------------------------------------
|                                          |                                   |                                |                                                                                  |                                                                                
|                                          |                                   |                                |                                                                                  |                                                                                
|October 5 through November 1, 2003        | 233,500                           | $    21.41                     | 233,500                                                                          | 156,200                                                                        
|November 2 through November 29, 2003      | 5,000                             | 21.15                          | 5,000                                                                            | 151,200                                                                        
|November 30, 2003 through January 3, 2004 | --                                | --                             | --                                                                               | 151,200                                                                        
|                                          |                                   |                                |                                                                                  |                                                                                
|Total                                     | 238,500                           | $    21.40                     | 238,500                                                                          | 151,200                                                                        
|                                          |                                   |                                |                                                                                  |                                                                                



On December 6, 1999, the Company's Board of Directors authorized a repurchase program for up to 1.5 million shares of its Class A common stock.  On December 11, 2000, the Company's Board of Directors authorized an addition of 1.0 million shares to this repurchase program.



ITEM 6.	SELECTED FINANCIAL DATA

Financial Highlights(Dollars in thousands, except per share amounts)

|                                                    | Year Ended
|--------------------------------------------------- | ----------
|                                                    |           
|                                                    | January 3,
|                                                    | 2004      
|                                                   
|Financial results                                   |           
|                                                   
|Net sales                                           | $         
|Net income                                          |           
|Return on sales                                     |           
|Financial condition                                 |           
|                                                   
|Working capital                                     | $         
|Total assets                                        |           
|Long-term debt
    (including current 
    portion) |           
|Shareholders' equity                                |           
|Data per common share                               |           
|                                                   
|Net income                                          |           
|Basic                                               | $         
|Diluted                                             |           
|Cash dividends declared                             |           
|Class A                                             |           
|Class B                                             |           
|Shareholders' equity                                |           
|                                                   
|                                                    |           



ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Our fiscal years are based on the 52 to 53 week period ended on the Saturday closest to December 31.  Results for 2003 represent the 53 weeks ended January 3, 2004.  Results for 2002 and 2001 represent the 52-week periods ended December 28, 2002 and December 29, 2001, respectively.  During 2003, the Company experienced a reduction in net sales to its wholesale customers as well as lower net sales in our own retail stores.  Both our wholesale and retail business units struggled with relatively weak product "sell-thru" which pressured our gross profit margins.

Our wholesale business was also adversely affected by reduced bookings as our customers remained cautious on their approach to managing their inventories.  Significant increases in margin support to our wholesale customers along with liquidation of close-out merchandise through off-price channels had signficantly reduced selling prices which hurt both our net sales and gross profit margin.

We experienced a comparable store sales decrease at our outlet stores, as this distribution channel is maturing.  Aggressive markdowns were needed to support our sales and to liquidate excess inventories, with a negative impact on gross margin.  We expanded our store base to 165 stores, which added selling, general and administrative costs on a reduced level of gross margin, resulting in reduced operating income.

The Company saw a significant increase in its royalties, due to initial sales of the Genuine Kids from OshKosh product, sold exclusively at Target stores.  Sales of licensed product began in July 2003 with the back-to-school season.  Other license income from the OshKosh B'Gosh label both domestically and internationally was affected by the same pressures as our wholesale business, and was down from previous years.

Despite the decline in operating profit, the Company maintained a solid balance sheet, with no long-term debt and sufficient working capital to continue to invest in the development of new business ideas, including our OshKosh Company Stores family lifestyle store concept. The company increased its quarterly dividend in mid 2003 to $.11 per share, to return a larger portion of its income to shareholders.

A more detailed analysis of the Company's results of operation and financial condition follows.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, selected Company income statement data expressed as a percentage of net sales.

|                                             |  | As a Percentage of Net Sales
|-------------------------------------------- |  | ----------------------------
|                                             |  |                             
|                                             |  |                             
|                                             |  |                             
|                                             |  |                             
|                                             |  |                             
|Net Sales                                    |  |                             
|Cost of products sold                        |  |                             
|                                             |  |                             
|Gross profit                                 |  |                             
|Selling, general and administrative
expenses |  |                             
|Royalty income, net                          |  |                             
|                                             |  |                             
|Operating income                             |  |                             
|Other income (expense) -- net                |  |                             
|                                             |  |                             
|Income before income taxes                   |  |                             
|Income taxes                                 |  |                             
|                                             |  |                             
|Net income                                   |  |                             
|                                             |  |                             



2003 COMPARED TO 2002

Net Sales

Net sales in 2003 were $417.3 million, a $19.7 million (4.5%) decrease compared to 2002 net sales of $437.0 million.  A summary of the Company's net sales for the years ended January 3, 2004 and December 28, 2002 follows:



|                            |  | Net Sales(in millions)
|--------------------------- |  | ----------------------
|                            |  |                       
|                            |  | Domestic              
|                            |  |                       
|                            |  |                       
|                            |  |                       
|                            |  |                       
|2003                        |  | $                     
|2002                        |  | $                     
|                            |  |                       
|                            |  |                       
|                            |  |                       
|Increase (decrease)         |  | $                     
|                            |  |                       
|Percent increase (decrease) |  |                       
|                           



Wholesale net sales for 2003 of $165.7 million were approximately 9.3% less than 2002 net wholesale sales of  $182.7 million. The Company's 2003 domestic wholesale unit shipments increased approximately 2.5% as compared to 2002. The 2003 increase in unit shipments is primarily the result of an increase in the number of "close-out" units sold offset, in part, by lower seasonal booked orders.  Overall price reductions in the Company's Spring and Summer '03 product offering (which averaged approximately 10%) had a significant impact on net sales in dollars.  Net sales were also affected by a highly promotional market, which resulted in increased customer margin support to assist in more effective flow of Company products through the retail channels.

The Company's 2003 retail sales decrease resulted from a comparable store sales decrease of 6.3% compared to 2002, offset by sales volume generated from newly opened stores and an additional week of retail sales due to our 53 week fiscal year.  The comparable store sales decrease resulted from a combination of our decision to lower retail price points, a more promotional sales environment and a general decline in store traffic reflecting the challenging retail environment.  During 2003, the Company opened ten factory outlet stores and its first Lifestyle store.  At January 3, 2004, the Company operated 165 domestic OshKosh B'Gosh retail stores, including 157 factory outlet stores, two showcase stores, five strip mall stores and a children's only Lifestyle store.

Gross Profit

The Company's gross profit margin as a percentage of net sales was 36.2% in 2003 compared with 43.5% in 2002. The Company's gross margin declined for several reasons.  In both our wholesale and retail businesses, the decision made in 2002 to reduce selling prices an average of ten percent implemented with our 2002 Fall/Back-to-School season had a continuing impact on our margins in 2003, particularly in the first half of the year. The Company also continued to support wholesale customers' margins through negotiated support payments.  In addition, a substantial increase in the number of units sold as "close-outs", at substantially reduced selling prices, lowered our gross margin. The Company also recorded a charge of approximately $1.3 million against cost of sales to reduce excess inventory and related Spring 2004 purchase commitments resulting from the decision of a significant customer to close its children's apparel stores in early 2004 and cancel orders.

In the Company's retail stores, lower customer traffic and sluggish product "sell-thru" necessitated markdowns to effectively flow seasonal inventory through our retail stores.

The Company continues to evaluate and execute its sourcing strategy to reduce the overall cost of its product offering, considering production capacity in Mexico and Central America, the Far East and other regions of the world. However, pressures on selling prices could not be fully offset by product cost reductions.  In addition, the Company's reinvigorated design direction is to add distinguishing features to its product which frequently results in incremental product costs.  The Company makes its ultimate global sourcing decisions on the basis of quality, timeliness of delivery and price.

Finally, the comparable 2002 gross margin had a $1.5 million favorable pre-tax LIFO impact, due to the substantial deflationary affects of our product sourcing in 2002.   The impact of LIFO inventory was insignificant on 2003 gross margin.

Selling, General and Administrative Expenses (SG&A)

The Company's SG&A expenses for 2003 of $151.3 million were $2.4 million over 2002 SG&A expenses of $148.9 million.  As a percentage of net sales, SG&A expenses were 36.2% in 2003 as compared to 34.1% in 2002.  The increase in SG&A expenses in both dollars and as a percentage of sales relates primarily to continued expansion of the Company's retail operations, including approximately $4.7 million in costs incurred to develop our Family Lifestyle store concept, approximately $1.0 million in severance related costs for personnel reductions and the further development of our OshKosh brand and Genuine Kids from OshKosh brand design teams.  These cost increases are offset in part by the effects of cost cutting measures taken to align our corporate support functions with current business activities.  SG&A expenses as a percentage of sales are also directly impacted by our sales decreases.

Royalty Income

The Company licenses a childrens apparel line under the Genuine Kids from OshKosh trademark which is available exclusively in Target stores.  The Company is responsible for all product design activities associated with this product.  Genuine Kids product was introduced in Target stores in July 2003.  The Company earned royalty income of $2.7 million based on sales from the product launch through the end of the year.

The Company also continues to license the OshKosh B'Gosh and related trademarks, domestically and internationally.

Domestically, royalty income relates to product extensions including footwear, hosiery, underwear, juvenile products, and certain outerwear.  Royalty income from domestic licenses totaled $3.0 million in 2003, a $.9 million (23.1%) decrease compared to $3.9 million in 2002.  The reduction in domestic royalty income is primarily attributable to reduced sales of licensed products, which are generally distributed in the same channels as the OshKosh B'Gosh apparel product.

Internationally, the Company receives royalty income for the use of its trademarks in key international markets, including Japan, Europe, Australia and Canada.  Royalty income of $6.0 million is a small decrease compared to $6.3 million in 2002.  The reduction is primarily attributable to a strategic change in licensee for menswear in Japan.

Operating Income

The combined effect of reduced sales, a significantly lower gross margin percentage and a modest increase in SG&A costs contributed to a significant decline in operating income in 2003 compared to 2002.

Other Income (Expense) - Net

The Company's 2003 net other income (expense) was a $.4 million expense compared to a $.6 million expense in 2002.  This decrease was primarily due to a decrease in interest expense during 2003.  The Company's interest expense decreased as a result of prepayment of all of the Company's long-term debt in mid 2002.

Income Taxes

The Company's 2003 effective income tax rate was approximately 36.0% as compared to 37.0% in 2002.  A reduced level of taxable income reduced the Company's effective federal statutory income tax rate.  Substantially all income is subject to taxation in the United States, and various state and local jurisdictions.

Net Income

Net income for the year ended January 3, 2004 of $7.2 million was down $24.8 million (77.5%) from net income for the year ended December 28, 2002 of $32.0 million. Diluted earnings per share of $.60 were 76.4% less than 2002 diluted earnings per share of $2.54.



2002 COMPARED TO 2001

Net Sales

Net sales in 2002 were $437.0 million, a $26.1 million (5.6%) decrease compared to 2001 net sales of $463.1 million.  A summary of the Company's net sales for the years ended December 28, 2002 and December 29, 2001 follows:



|                            |  | Net Sales(in millions)
|--------------------------- |  | ----------------------
|                            |  |                       
|                            |  | Domestic              
|                            |  |                       
|                            |  |                       
|                            |  |                       
|                            |  |                       
|2002                        |  | $                     
|2001                        |  |                       
|                            |  |                       
|                            |  |                       
|Increase (decrease)         |  | $                     
|                            |  |                       
|Percent increase (decrease) |  |                       
|                           



The Company licensed its footwear and outerwear products effective May 1, 2001.  The Company's wholesale sales of footwear and outerwear for 2001 were approximately $1.8 million.

Excluding its footwear and outerwear products, wholesale net sales for 2002 of $182.7 million were approximately 13.7% less than 2001 net wholesale sales of  $211.8 million. The Company's 2002 domestic wholesale unit shipments decreased approximately 7.7% as compared to 2001. The 2002 decrease in unit shipments is primarily the result of lower booked orders for the year reflecting broad based weakness in the apparel industry along with a reduction in the number of "close-out" units sold.  In addition to the unit decreases, overall price reductions in the Company's Fall/Back-to-School, Holiday and Spring '03 product offering (which averaged approximately 10%) had a significant impact on net sales in dollars.  Net sales were also affected by a highly promotional market, which resulted in increased customer support to assist in more effective flow of Company products through the retail channels.  Sales to Kohl's Department Stores, a major new customer, were $36.5 million.

The Company's 2002 increased retail sales resulted from sales volume generated from newly opened stores, offset in part by a comparable store sales decrease of 5.0% compared to 2001.  The comparable store sales decrease resulted from a combination of lower retail price points, a more promotional sales environment and a general decline in store traffic reflecting the challenging retail environment.  During 2002, the Company opened 13 factory outlet stores.  At December 28, 2002, the Company operated 154 domestic OshKosh B'Gosh retail stores, including 147 factory outlet stores, two showcase stores and five strip mall stores.

Gross Profit

The Company's gross profit margin as a percentage of net sales was 43.5% in 2002 compared with 41.8% in 2001.  The increase in gross margin percentage for 2002 was due to the higher proportion of sales from the Company's retail business unit as compared to its wholesale business unit, more favorable production costs realized from offshore sourcing and a continued focus on inventory management, which resulted in lower off-price sales of "close-outs" to discounters, as well as the effects of the Company's LIFO inventory accounting method in a deflationary environment.  The growth in the Company's retail business, which normally attains higher gross margins than the Company's wholesale business, had a positive impact on gross profit margin.  Although the Company decreased selling prices in both its wholesale and retail businesses, efficient sourcing and a deflationary global sourcing environment allowed the Company to retain its normal margins.  This deflationary sourcing environment resulted in additional LIFO income of approximately $1.5 million before income taxes, as the Company ended the year with lower-cost product in its ending inventory.

The Company continues to evaluate and execute its sourcing strategy to reduce the overall cost of its product offering, considering production capacity in Mexico and Central America, the Far East and other regions of the world. The Company makes its ultimate global sourcing decisions on the basis of quality, timeliness of delivery and price.

Selling, General and Administrative Expenses (SG&A)

The Company's SG&A expenses for 2002 of $148.9 million were $.6 million over 2001 SG&A expenses of $148.3 million.  As a percentage of net sales, SG&A expenses were 34.1% in 2002 as compared to 32.0% in 2001.  The increase in SG&A expenses in both dollars and as a percentage of sales relates primarily to continued expansion of the Company's retail operations and the development of our New York design team, offset in part by employee reductions in certain support functions as well as other cost containment initiatives.  SG&A expenses as a percentage of sales is also directly impacted by our sales decreases.

Royalty Income

The Company licenses the use of its trade names to selected licensees in the U.S. and in foreign countries.  The Company's net royalty income was $10.2 million in 2002, a $.9 million increase compared to 2001 net royalty income of $9.3 million.  Royalty income from domestic licensees was approximately $3.9 million in 2002 as compared to $3.6 million in 2001.  This increase was due primarily to the licensing of the Company's footwear and outerwear businesses which was effective May 1, 2001.  Royalty income from foreign licensees was approximately $6.3 million in 2002 as compared to $5.7 million in 2001.  The increase was due primarily to increased business levels by the Company's Japanese and Australian licensees.

Operating Income

As a result of the factors described above, the Company's 2002 operating income was $51.5 million, a decrease of $3.2 million (5.9%) from 2001 operating income of $54.7 million.

Other Income (Expense) - Net

The Company's 2002 net other income (expense) was a $.6 million expense compared to a $1.5 million expense in 2001.  This decrease was due to an approximate $1.2 million decrease in interest expense during 2002.  The Company's interest expense decreased substantially as a result of lower interest rates and prepayment of all of the Company's long-term debt in 2002.

Income Taxes

The Company's 2002 effective income tax rate was approximately 37.0% as compared to 38.4% in 2001.  Substantially all income is subject to taxation in the United States, and various state and local jurisdictions.

Net Income

Net income for the year ended December 28, 2002 of $32.0 million represented a $.8 million (2.3%) decrease compared to net income for the year ended December 29, 2001 of $32.8 million. Diluted earnings per share of $2.54 (including $.08 per share relating to use of the LIFO inventory accounting method) were 2.7% less than 2001 diluted earnings per share of $2.61.



SEASONALITY OF BUSINESS

The Company's business continues to be seasonal, with highest sales and income in the second half of the year, which includes significant wholesale shipping periods and a major retail selling season at its retail stores.  The Company's second quarter sales and income are the lowest of the year  because of relatively low domestic wholesale unit shipments and relatively modest retail store sales during this period.  The Company anticipates this seasonality trend to continue to impact 2004 quarterly sales and income.



FINANCIAL POSITION, CAPITAL RESOURCES AND LIQUIDITY

At January 3, 2004, the Company's cash and cash equivalents were $23.9 million, compared to $36.2 million at the end of 2002.  Net working capital at January 3, 2004 was $69.9 million compared to $71.0 million at December 28, 2002.  Accounts receivable at January 3, 2004 and December 28, 2002 were $16.7 million.

Inventories at January 3, 2004 were $61.4 million, compared to $57.1 million at the end of 2002. The increase in inventories relates primarily to finished goods.  Year end 2003 inventory levels slightly exceed inventory levels needed to fulfill Spring '04 product shipments as a result of order cancellations.  Excess inventory has been written down to the lower of cost or net realizable value on a season by season basis.  Inventory levels at the Company's retail stores exceed prior year levels due in part to an expansion of the Company's product offering of adult product.

Cash provided by operations amounted to approximately $3.6 million in 2003, compared to $54.1 million in 2002 and $42.9 million in 2001.  The decrease in cash provided by operating activities in 2003 compared to 2002 is primarily attributable to reduced net income and to a lesser degree, changes in operating assets and liabilities. Compared to 2002 levels, the Company experienced an increase in inventory levels and prepaid expenses, which used operating cash flow.  In addition, cash provided by operations in 2002 included cash flows related to a $9.0 million reduction in accounts receivable as the Company's wholesale business contracted.  Accounts receivable levels at the end of 2003 were very comparable with levels as of the end of 2002 and, accordingly, did not provide comparable cash flows in 2003.  2003 cash flows from operations were also affected by minimal stock option transactions in 2003, compared to positive cash flows in 2002 and 2001.  2002 operating cash flows also benefited from the reversal of certain temporary differences, reducing the cash payments for income taxes.  The increase in cash provided by operating activities in 2002 compared to 2001 is primarily attributable to changes in items of working capital.

Cash used in investing activities totaled $3.6 million in 2003, compared to $5.4 million in 2002 and $5.6 million in 2001. Capital expenditures were $3.7 million in 2003, compared with $5.4 million in 2002 and $5.1 million in 2001.  Capital expenditures in each year related primarily to retail store expansions and remodeling.

Cash used in financing activities totaled $12.2 million in 2003, compared to $41.8 million in 2002 and $27.7 million in 2001.  The Company's primary financing activities consisted of long-term debt prepayments, ongoing stock repurchase transactions, cash dividends and issuances of common shares through stock option exercises.

On December 6, 1999, the Company's Board of Directors authorized a repurchase program for up to 1.5 million shares of its Class A common stock.  On December 11, 2000, the Company's Board of Directors authorized an addition of 1.0 million shares to this repurchase program.  During 2003, 2002 and 2001, the Company repurchased 400,400, 712,000 and 397,300 shares, respectively, of its Class A common stock under this program for approximately $8.9, $21.2 and $10.3 million, respectively.

Cash dividends on the Company's Class A and Class B common stock totaled $.36 per share and $.31 per share, respectively, in 2003, $.26 per share and $.225 per share, respectively, in 2002, and $.22 per share and $.19 per share, respectively, in 2001.  The Company's current quarterly cash dividend on its Class A and Class B Common stock is $.11 and $.095, respectively.

The Company made cash contributions of $3.5 million and $6.0 million to its defined benefit pension plans covering hourly and salaried employees to maintain a funding status in excess of accumulated benefits obligation during 2003 and 2002, respectively.  After evaluating current market conditions and future expectations, the Company lowered its discount rate again in 2003 to 6.0% and maintained its expected long-term rate of return of 8.0% to reflect current market expectations.

On October 30, 2003, the Company amended its unsecured credit agreement with a number of banks that provides a $75 million revolving credit facility available for general corporate purposes, including cash borrowings and issuances of letters of credit.  The amended revolving credit facility expires October 28, 2004.  There were no outstanding borrowings against the revolving credit arrangement at January 3, 2004 although the Credit Agreement is used to support merchandise letters of credit with its international vendors.  The Company believes that this credit facility, along with cash generated from operations, will be sufficient to finance the Company's seasonal working capital needs as well as its capital expenditures for the Family Lifestyle stores and other business development needs.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following tables summarize our contractual and commercial obligations as of January 3, 2004:

|                                           |  | Payment Due By Period                       |       
|------------------------------------------ |  | ------------------------------------------- | ------
|                                           |  |                                             |       
|                                           |  | Total                                       |       
|                                           |  |                                             |       
|Contractual Obligations(in thousands)      |  |                                             |       
|Long-term debt                             |  | $                                           | --    
|Capital leases                             |  |                                             | --    
|Operating leases                           |  |                                             | 55,420
|Purchase obligations                       |  |                                             | 37,551
|                                           |  |                                             |       
|                                           |  |                                             |       
|                                           |  | Amounts of Commitment Expiration Per Period |       
|                                           |  |                                             |       
|                                           |  |                                             | Total 
|                                           |  |                                             |       
|Other Commercial Commitments(in thousands) |  |                                             |       
|Working capital facility                   |  | $                                           | --    
|Merchandise Letters of Credit              |  |                                             | 16,190
|Standby Letters of Credit                  |  |                                             | 740   
|Employee benefit plans                     |  |                                             | 3,448 
|                                           |  |                                             |       



CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, and revenues and expenses during the period.  Significant accounting policies employed by the Company, including the use of estimates, are presented in the Notes to Consolidated Financial Statements of the Company's Annual Report.

Critical accounting policies are those that are most important to the presentation of the Company's financial condition and the results of operations, require management's most difficult, subjective and complex judgments, and involve uncertainties.  The Company's most critical accounting policies, discussed below, pertain to revenue recognition, accounts receivable, net, inventories, accrued expenses, income taxes and stock-based compensation.  Management must use informed judgments and best estimates to properly apply these critical accounting policies.  Because of the uncertainty in these estimates, actual results could differ from estimates used in applying the critical accounting policies. The Company is not aware of any reasonably likely events or circumstances which would result in different amounts being reported that would materially affect its financial condition or results of operations.

Revenue Recognition

Retail store revenue is recognized at the time of sale and is net of returns.

Revenue within the Company's wholesale business is recognized at the time merchandise is shipped from the Company's distribution centers, as this is when title and risk of loss passes to the customer. Revenue is reduced by provision for returns when the return is authorized by the Company.  Revenue reductions related to margin support, allowances and advertising support are recorded when revenue from the related shipment of product is recognized.

Wholesale revenue is recorded net of returns, margin support, allowances and certain advertising support.





|Returns
The Company determines the amount of potential returns of unsaleable products, and reduces sales for the full amount of the credit that is anticipated will be issued or has been issued to its wholesale customers.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Margin Support
In the apparel industry, a supplier often faces pressure from its customers to support retail margins on the sale of the supplier's product.  The Company has periodically provided allowances to its customers to assist the customer in meeting its margin expectations, and to maintain or establish long-term customer relationships.  To determine the adequacy of its support, as reflected on the financial statements, the Company periodically reviews potential customer support obligations for all product shipped through the date of the financial statements.  These amounts are evaluated on a customer-by-customer basis based on an evaluation of product sell-through results, retailer performance, current market conditions, the strategic importance of the customer's ongoing business relationship and any unauthorized deductions taken by the customer.  Settlements of margin support arrangements are periodically compared to the Company's original estimates to enhance the Company's ability to predict support levels in subsequent seasons.  Margin support arrangements are recorded as a reduction of sales.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Advertising Support
Support for customers' advertising activities, product presentation or other promotions are considered reductions of revenue unless such support relates to advertising material the Company could obtain independently, which is recorded as advertising expense provided it does not exceed the fair value of such services.  The Company records advertising commitments during the year as they are formalized, considering the Company's prior history in dealing with customer advertising support.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Accounts Receivable, Net

In the normal course of business, the Company extends credit to customers.  Accounts receivable, as shown on the Consolidated Balance Sheets, is net of allowances for doubtful accounts and other allowances.

An allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the date of the financial statements, assessments of collectibility based on historic trends and an evaluation of the impact of economic conditions.

The Company regularly receives unauthorized charge backs from its customers for a variety of operational reasons.  The Company periodically evaluates the adequacy of its reserve for such amounts by reviewing the historical collection of operational charge backs.  The Company also considers likely charge backs that are anticipated to be taken in the foreseeable future based on historical charge back rates to properly match subsequent charge back activity with the revenue reflected in the Company's financial statements.

Allowances for returns of unsaleable products and margin support which reduce net sales are also reflected as a reduction to accounts receivable as they are generally settled upon payment of customer invoices.

Inventories

Inventories are stated at lower of cost (using the last-in, first-out method) or market.  The Company continually evaluates the composition of its inventories by season to assess slow-turning, current season product as well as prior season fashion product.  This analysis is significantly influenced by customer cancellations that occur after the Company has made commitments to produce its seasonal products.  Due to a limited sales period for each fashion season, excess product from current and prior seasons has a diminished market value.  The Company sells these units as "close-outs", generally at substantially reduced selling prices.  Factors influencing net realizable value include desirability of the product, quantity and size range of each item available, the overall supply of close-out merchandise in the off-price market, recent negotiated selling prices and the seasonality of the product being sold.  The Company evaluates the net realizable value of remaining inventory by season and records the inventory at the lower of cost or net realizable value.

Accrued Expenses

Accrued expenses for employee health insurance, workers' compensation, profit sharing, contracted advertising, professional fees and other outstanding Company obligations are assessed based on statistical trends and estimates based on projections and current expectations, and are updated periodically as additional information becomes available.

Income Taxes

The Company estimates its current tax expense (state and federal), and identifies temporary and permanent differences resulting from different treatment of items for tax and financial reporting purposes.  Temporary differences result in deferred tax assets, which are included on the Company's consolidated balance sheet.  The Company's consistent history of taxable income makes the realization of the benefit of deferred tax assets probable.  The Company also periodically evaluates and has sufficiently provided for potential assessments of additional tax and interest by federal and state governmental authorities based on the ultimate settlement of current or pending audits.

Stock-Based Compensation

The Company accounts for stock-based compensation on stock options and restricted stock grants under the intrinsic value method, as permitted by APB No. 25.  Under this pronouncement, compensation expense is recorded based on the difference between the exercise price of stock options and the fair market value of the underlying stock on the date of the option grant.  Under the Company's non-qualified stock option program, the exercise price has consistently been set at the fair value of the underlying stock on the date of the option grant, resulting in no additional compensation expense.  For restricted stock grants, the Company calculates compensation expense based on the fair value of the stock on date of the restricted stock grant, and amortizes this amount over the vesting period of the underlying restricted stock grant.

SFAS No. 123, "Accounting for Stock-Based Compensation", as amended by SFAS No. 148, "Accounting for Stock-Based Compensation--Transition and Disclosure" requires proforma disclosure concerning the impact on net income had fair value accounting called for under SFAS No. 123 been applied.

The Company utilizes the Black-Sholes method to determine the fair market value of non-qualified stock option grants, and discloses all relevant assumptions inherent in this valuation model and the proforma information required under SFAS No. 148 in a footnote to its financial statements.  The Company updates the assumptions necessary to properly value stock options on the date of non-qualified stock option grants or restricted stock grants.

Application of Critical Accounting Policies AND ESTIMATES

The Company makes certain judgements and uses estimates and assumptions when applying significant accounting policies in the preparation of the Company's consolidated financial statements in accordance with accounting principles generally accepted in the United States.  The development and selection of critical accounting policies and the related disclosures have been reviewed with the Audit Committee of the Board of Directors.  While there have not been any changes in the selection or application of significant accounting policies during the year, the Company utilizes critical estimates and assumptions relating to the application of its provision for obsolete inventory, as described below.

In evaluating the need for a valuation allowance to reduce the carrying value of inventory to net realizable value, the Company estimates what portion of its seasonal inventory, including non-cancelable inventory commitments, may ultimately become obsolete.  Obsolete inventory is generally sold as "close-outs", generally at substantially reduced selling prices.  In applying this accounting principle, the Company must estimate the portion of each season's inventory that may result in excess or obsolete inventory, and further must estimate the net realizable value of this inventory.  Net realizable value is affected by the timing of product availability, quantities of product available, and overall market conditions including the availability of similar product.  Changes in the assumptions regarding what portion of seasonal inventory will be obsolete, or the net realizable value of obsolete inventory could have a significant impact on the Company's results of operations and financial position.  For example, if the Company were to over-estimate the net realizable value of its obsolete inventory by 10%, the impact on cost of goods sold, gross margin and operating income would be approximately $600,000.  While the Company uses historic information and carefully analyzes current market conditions in making these estimates, it cannot be assured that the ultimate liquidation of this inventory or the actual amount of obsolete inventory that must be sold through off-price channels will correspond with its estimates as of January 3, 2004.



FORWARD OUTLOOK

The retail climate, particularly in many of the channels in which the Company's products are sold, remains challenging. The Company currently projects 2004 net sales will be in the range of $390 million to $410 million. The Company's booked orders in dollars for the 2004 Spring and Summer seasons were below orders booked in dollars for the comparable 2003 season.  The Company believes that this reduction is due primarily to lower unit price points, the economic pressure being placed on the Company's wholesale customers for market share and the cautious approach to inventory management by many of the Company's wholesale customers. The promotional environment that exists in our wholesale business is likely to continue well into 2004.

The Company is currently planning comparable store sales in our retail business unit to be flat for early 2004, gradually improving to low single digit increases over the remainder of 2004. Two new retail outlet stores are expected to be opened during 2004, and the Company expects to experience incremental sales in stores opened during 2003.  Five under-performing retail stores were closed in early 2004.  The impact of these closings is immaterial to the Company's consolidated financial statements.

The Company remains committed to its retail Family Lifestyle Store concept.  The Company intends to open 14 Family Lifestyle Stores during 2004.  Seven Family Lifestyle store locations are under lease, with six stores scheduled to open in the first half of the year.

The Company anticipates that royalty income from Domestic and International use of OshKosh B'Gosh and related trademarks for 2004 will be comparable with 2003 amounts. The Genuine Kids licensing arrangement will generate royalty income throughout the entire year 2004.  However, due to the seasonal nature of children's apparel sales, we anticipate that this royalty income will be greater in the second half of the year.

For the entire year 2004, capital expenditures are expected to total $11.0 million, due primarily to anticipated Lifestyle store build-out costs.  The Company is currently budgeting depreciation and amortization for 2004 of $7.0 million.  The Company's effective tax rate is expected to be approximately 36.5% for 2004.

The foregoing forward-looking statements are qualified in their entirety by the reference to the risks and uncertainties set forth under the heading "Forward-Looking Statements" below.

FORWARD-LOOKING STATEMENTS

Statements contained herein and in future filings by the Company with the Securities and Exchange Commission (the "SEC"), in Company press releases and in oral statements made by, or with the approval of, authorized personnel that relate to the Company's future performance, including, without limitation, statements with respect to the Company's anticipated financial position, results of operations and level of business for 2004 or any other future period, are forward-looking statements within the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.  Such statements, which are generally indicated by words or phrases such as "plan", "estimate", "project", "anticipate", "the Company believes", "management expects", "currently anticipates", "remains optimistic" and similar phrases are based on current expectations only and are subject to certain risks, uncertainties and assumptions.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, projected or estimated.

Among the factors that could cause actual results to materially differ include the level of consumer spending for apparel, particularly in the children's wear segment, the impact of deflation on children's wear apparel prices; risks associated with competition in the market place, including the financial condition of and consolidations, restructurings and other ownership changes in, the apparel and related products industry and the retail industry, the introduction of new products or pricing changes by the Company's competitors, and the Company's ability to remain competitive with respect to product, service and value; risks associated with the Company's dependence on sales to a limited number of large department and specialty store customers, including risks related to customer requirements for vendor margin support, as well as risks related to extending credit to large customers; risks associated with possible deterioration in the strength of the retail industry, including, but not limited to, business conditions and the economy, natural disasters, and the unanticipated loss of a major customer; risks related to the failure of Company suppliers to timely deliver needed raw materials, risks associated with importing its products into the United States under current and future customs and quota rules and regulations, risks associated with using a global transportation matrix and the Company's ability to correctly balance the level of its commitments with actual orders; risks associated with terrorist activities as well as risks associated with foreign operations; risks related to the Company's ability to defend and protect its trademarks and other proprietary rights and other risks related to managing intellectual property issues.  In addition, the inability to ship Company products within agreed time frames due to unanticipated manufacturing, distribution system or freight carrier delays or the failure of Company contractors to deliver products within scheduled time frames are risk factors in ongoing business.  As a part of the Company's product sourcing strategy, it routinely contracts for apparel products produced by contractors in Asia, Mexico and Central America.  If financial, political or other related difficulties were to adversely impact the Company's contractors in these regions, it could disrupt the supply of product contracted for by the Company.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

The Company has an unsecured $75 million revolving credit facility available for general corporate purposes.  Borrowings under this agreement bear interest at a variable rate, based on the London Interbank Offered Rates.  The Company does not presently hedge its interest rate risk.  Since the Company does not have any outstanding debt at the end of 2003, a 1% change in interest rates would not have a material impact on the Company's interest expense for fiscal 2004.

Foreign Currency Risk

The Company contracts for the manufacture of apparel with contractors in Asia, Central America, and Mexico.  While these contracts are stated in terms of U.S. dollars, there can be no assurance that the cost for the production of the Company's products will not be affected by exchange fluctuations between the United States and the local currencies of these contractors.  Due to the number of currencies involved, the Company cannot quantify the potential impact of future currency fluctuations on net income in future years.  The Company does not hedge its foreign currency risk.

Inflation Risk

While the current deflationary environment, especially in the apparel industry, affects the Company's results of operations, the Company manages its inflation/deflation risks by ongoing review of product selling prices and production costs.  Management believes the Company's ability to match product selling prices with production cost reduces these risks and their affect on the Company's business, its consolidated financial position, results of operations or cash flows.

Investment Risk

The Company does not believe it has material exposure to market risk with respect to any of its investments, all of which are cash equivalents.  The Company does not utilize market rate sensitive instruments for trading or other purposes.  For information regarding the Company's investments, refer to the Cash and cash equivalents portion of Note 1 to the consolidated financial statements.

ITEM 8.	 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

|                                                                                                                                  |  |    |  | Page
|--------------------------------------------------------------------------------------------------------------------------------- |  | -- |  | ----
|                                                                                                                                  |  |    |  |     
|Report of Independent Auditors                                                                                                    |  | 24
|                                                                                                                                  |  |    |  |     
|Report of Independent Public Accountants                                                                                          |  | 25
|                                                                                                                                  |  |    |  |     
|Consolidated Balance Sheets - January 3, 2004 and December 28, 2002                                                               |  | 26
|                                                                                                                                  |  |    |  |     
|Consolidated Statements of Income - years ended January 3, 2004, December 28, 2002, and December 29, 2001                         |  | 27
|                                                                                                                                  |  |    |  |     
|Consolidated Statements of Changes in Shareholders' Equity - years ended January 3, 2004, December 28, 2002 and December 29, 2001 |  | 28
|                                                                                                                                  |  |    |  |     
|Consolidated Statements of Cash Flows - years ended January 3, 2004 , December 28, 2002 and December 29, 2001                     |  | 29
|                                                                                                                                  |  |    |  |     
|Notes to Consolidated Financial Statements                                                                                        |  | 30





REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of
OshKosh B'Gosh, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of OshKosh B'Gosh, Inc. and subsidiaries (the "Company") as of January 3, 2004 and December 28, 2002, and the related consolidated statements of income, shareholders' equity and cash flows for the years then ended. These consolidated financial statements and the financial statement schedule are the responsibility of the Company's management.  Our responsibility is to express an opinion on the 2003 and 2002 consolidated financial statements and financial statement schedule based on our audits.  The consolidated financial statements and financial statement schedule of the Company for the period ended December 29, 2001 were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements and stated that such financial statement schedule, when considered in relation to the 2001 basic consolidated financial statements taken as a whole, presented fairly in all material respects the information set forth therein their report dated January 30, 2002.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the 2003 and 2002 consolidated financial statements present fairly, in all material respects, the financial position of the Company as of January 3, 2004 and December 28, 2002,and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.  Also, in our opinion, the 2003 and 2002 financial statement schedule when considered in relation to the 2003 and 2002 basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.



DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin
February 10, 2004



The following is a copy of a report previously issued by Arthur Andersen LLP in connection with the Company's Annual Report on Form 10-K for the year ended December 29, 2001.  This opinion has not been reissued by Arthur Andersen LLP.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of OshKosh B'Gosh, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheet of OshKosh B'Gosh, Inc. (a Delaware Corporation) and subsidiaries as of December 29, 2001 and the related consolidated statements of income, changes in shareholders' equity and cash flows for the year then ended. These consolidated financial statements and the supplemental schedule referred to below are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements and supplemental schedule based on our audit.  The consolidated financial statements of OshKosh B'Gosh, Inc. and subsidiaries as of December 30, 2000 and for each of the two years in the period ended December 30, 2000 were audited by other auditors whose report dated January 26, 2001, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of OshKosh B'Gosh, Inc. and subsidiaries as of December 29, 2001 and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.

Our audit was made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole.  The supplemental schedule listed in the index to Item 14(a) is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements.  The supplemental schedule for the year ended December 29, 2001 has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLPMilwaukee, Wisconsin
January 30, 2002





OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Consolidated Balance Sheets(Dollars in thousands, except per share amounts)



|                                                |                                                   |                               |                             | January 3,
2004            |    | December 28, 
2002 |        
|----------------------------------------------- | ------------------------------------------------- | ----------------------------- | --------------------------- | -------------------------- | -- | ------------------ | -------
|                                                |                                                   |                               |                             |                            |    |                    |        
|                                                |                                                   |                               |                             |                            |    |                    |        
|ASSETS                                          |                                                   |                               |                             |                            |    |                    |        
|Current assets                                  |                                                   |                               |                             |                            |    |                    |        
|                                                | Cash and cash equivalents                         |                               | $                           | 23,931                     |    |                    | $      
|                                                | Accounts receivable, net                          |                               |                             | 16,669                     |    |                    |        
|                                                | Inventories                                       |                               |                             | 61,358                     |    |                    |        
|                                                | Prepaid expenses and other current assets         |                               |                             | 8,316                      |    |                    |        
|                                                | Deferred income taxes                             |                               |                             | 10,100                     |    |                    |        
|                                                |                                                   |                               |                             |                            |    |                    |        
|Total current assets                            |                                                   |                               | 120,374                     |                            |    |                    | 121,326
|                                                |                                                   |                               |                             |                            |    |                    |        
|Property, plant and equipment, net              |                                                   |                               | 23,696                      |                            |    |                    | 27,127 
|Deferred income taxes                           |                                                   |                               | 2,000                       |                            |    |                    | 2,300  
|Other assets                                    |                                                   |                               | 5,855                       |                            |    |                    | 5,001  
|                                                |                                                   |                               |                             |                            |    |                    |        
|                                                |                                                   |                               |                             |                            |    |                    |        
|Total assets                                    |                                                   | $                             | 151,925                     |                            |    | $                  | 155,754
|                                                |                                                   |                               |                             |                            |    |                    |        
|                                                |                                                   |                               |                             |                            |    |                    |        
|LIABILITIES AND SHAREHOLDERS' EQUITY            |                                                   |                               |                             |                            |    |                    |        
|Current liabilities                             |                                                   |                               |                             |                            |    |                    |        
|                                                | Accounts payable                                  |                               | $                           | 16,961                     |    |                    | $      
|                                                | Accrued liabilities                               |                               |                             | 33,552                     |    |                    |        
|                                                |                                                   |                               |                             |                            |    |                    |        
|Total current liabilities                       |                                                   |                               | 50,513                      |                            |    |                    | 50,303 
|                                                |                                                   |                               |                             |                            |    |                    |        
|Employee benefit plan liabilities               |                                                   |                               | 13,647                      |                            |    |                    | 13,062 
|Shareholders' equity                            |                                                   |                               |                             |                            |    |                    |        
|                                                | Preferred stock, par value $.01 per share:        |                               |                             |                            |    |                    |        
|                                                |                                                   | Authorized - 1,000,000 shares |                             |                            |    |                    |        
|                                                |                                                   | Issued and outstanding - None |                             |                            | -- |                    |        
|                                                | Common stock, par value $.01 per share:           |                               |                             |                            |    |                    |        
|                                                |                                                   | Class A, authorized           | - 30,000,000 shares;        |                            |    |                    |        
|                                                |                                                   | Issued and outstanding        | - 9,436,869 shares in 2003, |                            |    |                    |        
|                                                |                                                   |                               |                             | - 9,758,459 shares in 2002 |    |                    | 94     
|                                                |                                                   | Class B, authorized           | - 4,425,000 shares;         |                            |    |                    |        
|                                                |                                                   | Issued and outstanding        | - 2,184,261 shares in 2003, |                            |    |                    |        
|                                                |                                                   |                               |                             | - 2,194,561 shares in 2002 |    |                    | 22     
|                                                | Retained earnings                                 |                               |                             | 87,649                     |    |                    |        
|                                                | Unearned compensation under restricted stock plan |                               |                             | --                         |    |                    |        
|                                                |                                                   |                               |                             |                            |    |                    |        
|Total shareholders' equity                      |                                                   |                               | 87,765                      |                            |    |                    | 92,389 
|                                                |                                                   |                               |                             |                            |    |                    |        
|                                                |                                                   |                               |                             |                            |    |                    |        
|Total liabilities and shareholders' equity      |                                                   | $                             | 151,925                     |                            |    | $                  | 155,754
|                                                |                                                   |                               |                             |                            |    |                    |        
|                                                |                                                   |                               |                             |                            |    |                    |        
|See notes to consolidated financial statements.







OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Consolidated Statements of Income(Dollars in thousands, except per share amounts)





|                                                |                  |   |         | For the Year Ended |  
|----------------------------------------------- | ---------------- | - | ------- | ------------------ | -
|                                                |                  |   |         |                    |  
|                                                |                  |   |         | January 3, 
2004   |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|Net sales                                       |                  | $ | 417,272 |                    |  
|Cost of products sold                           |                  |   | 266,119 |                    |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|Gross profit                                    |                  |   | 151,153 |                    |  
|                                                |                  |   |         |                    |  
|Selling, general and administrative expenses    |                  |   | 151,251 |                    |  
|Royalty income, net                             |                  |   | (11,688 | )                  |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|Operating income                                |                  |   | 11,590  |                    |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|Other income (expense):                         |                  |   |         |                    |  
|                                                | Interest expense |   |         | (718               | )
|                                                | Interest income  |   |         | 200                |  
|                                                | Miscellaneous    |   |         | 162                |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|Other income (expense) - net                    |                  |   | (356    | )                  |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|Income before income taxes                      |                  |   | 11,234  |                    |  
|                                                |                  |   |         |                    |  
|Income taxes                                    |                  |   | 4,045   |                    |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|Net income                                      |                  | $ | 7,189   |                    |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|Net income per common share                     |                  |   |         |                    |  
|                                                | Basic            |   | $       | 0.61               |  
|                                                | Diluted          |   | $       | 0.60               |  
|                                                |                  |   |         |                    |  
|                                                |                  |   |         |                    |  
|See notes to consolidated financial statements.







OSHKOSH B'GOSH, INC. AND SUBSIDIARIES

|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   | Unearned   |    
|----------------------------------------------- | --------------------------- | ------------ | ---- | - | ---------- | -- | - | ------- | -- | - | ------------ | -- | - | ---------------- | ------- | - | -------- | ------ | - | ---------- | ---
|                                                |                             | Common Stock |      |   | Additional |    |   |         |    |   | Compensation |   
|                                                |                             | Class A      |      |   | Class B    |    |   | Paid-In |    |   | Retained     |    |   | Under Restricted |        
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |        
|                                                |                             | Shares       |      |   | Amount     |    |   | Shares  |    |   | Amount       |    |   | Capital          |         |   | Earnings |        |   | Stock Plan |    
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|Balance -- December 30, 2000                    |                             | 9,944        |      | $ | 99         |    |   | 2,229   |    | $ | 22           |    | $ | --               |         | $ | 45,054   |        | $ | (702       | )  
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|Net income                                      |                             | --           |      |   | --         |    |   | --      |    |   | --           |    |   | --               |         |   | 32,808   |        |   | --         |    
|Dividends                                       |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | - Class A ($.22 per share)  |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | (2,198 | ) |            | -- 
|                                                | - Class B ($.19 per share)  |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | (422   | ) |            | -- 
|Conversions of common shares                    |                             | 21           |      |   | --         |    |   | (21     | )  |   | --           |    |   | --               |         |   | --       |        |   | --         |    
|Stock options exercised                         |                             | 452          |      |   | 5          |    |   | --      |    |   | --           |    |   | 5,234            |         |   | --       |        |   | --         |    
|Income tax benefit from stock                   |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Options exercised           |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | 3,754   |   |          | --     |   |            | -- 
|Compensation earned under                       |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Restricted stock plan       |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | --     |   |            | 390
|Repurchase and retirement of                    |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Common shares               |              | (397 | ) |            | (4 | ) |         | -- |   |              | -- |   |                  | (3,649  | ) |          | (6,691 | ) |            | -- 
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|Balance -- December 29, 2001                    |                             | 10,020       |      |   | 100        |    |   | 2,208   |    |   | 22           |    |   | 5,339            |         |   | 68,551   |        |   | (312       | )) 
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|Net income                                      |                             | --           |      |   | --         |    |   | --      |    |   | --           |    |   | --               |         |   | 32,045   |        |   | --         |    
|Dividends                                       |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | - Class A ($.26 per share)  |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | (2,635 | ) |            | -- 
|                                                | - Class B ($.225 per share) |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | (495   | ) |            | -- 
|Conversions of common shares                    |                             | 13           |      |   | --         |    |   | (13     | )  |   | --           |    |   | --               |         |   | --       |        |   | --         |    
|Stock options exercised                         |                             | 437          |      |   | 4          |    |   | --      |    |   | --           |    |   | 6,614            |         |   | --       |        |   | --         |    
|Income tax benefit from stock                   |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Options exercised           |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | 4,108   |   |          | --     |   |            | -- 
|Compensation earned under                       |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Restricted stock plan       |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | --     |   |            | 292
|Repurchase and retirement of                    |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Common shares               |              | (712 | ) |            | (7 | ) |         | -- |   |              | -- |   |                  | (16,061 | ) |          | (5,176 | ) |            | -- 
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|Balance -- December 28, 2002                    |                             | 9,758        |      |   | 97         |    |   | 2,195   |    |   | 22           |    |   | --               |         |   | 92,290   |        |   | (20        | )) 
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|Net income                                      |                             | --           |      |   | --         |    |   | --      |    |   | --           |    |   | --               |         |   | 7,189    |        |   | --         |    
|Dividends                                       |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | - Class A ($.36 per share)  |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | (3,460 | ) |            | -- 
|                                                | - Class B ($.31 per share)  |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | (679   | ) |            | -- 
|Conversions of common shares                    |                             | 11           |      |   | --         |    |   | (11     | )  |   | --           |    |   | --               |         |   | --       |        |   | --         |    
|Stock options exercised, net                    |                             | 68           |      |   | 1          |    |   | --      |    |   | --           |    |   | 867              |         |   | --       |        |   | --         |    
|Income tax benefit from stock                   |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   | --       |        |   | --         |    
|                                                | Options exercised           |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | 321     |   |          | --     |   |            | -- 
|Additional consideration under                  |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Restricted stock plan       |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | 67      |   |          | --     |   |            | (67
|Compensation earned under                       |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Restricted stock plan       |              | --   |   |            | -- |   |         | -- |   |              | -- |   |                  | --      |   |          | --     |   |            | 87 
|Repurchase and retirement of                    |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                | Common shares               |              | (400 | ) |            | (4 | ) |         | -- |   |              | -- |   |                  | (1,255  | ) |          | (7,691 | ) |            | -- 
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|Balance -- January 3, 2004                      |                             | 9,437        |      | $ | 94         |    |   | 2,184   |    | $ | 22           |    | $ | --               |         | $ | 87,649   |        | $ | --         |    
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|                                                |                             |              |      |   |            |    |   |         |    |   |              |    |   |                  |         |   |          |        |   |            |    
|See notes to consolidated financial statements.





OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows



|                                                     |                                                                                    |                                                 |         | For the Year Ended |       
|---------------------------------------------------- | ---------------------------------------------------------------------------------- | ----------------------------------------------- | ------- | ------------------ | ------
|                                                     |                                                                                    |                                                 |         |                    |       
|                                                     |                                                                                    |                                                 |         | January 3, 
2004   |       
|                                                     |                                                                                    |                                                 |         |                    |       
|                                                     |                                                                                    |                                                 |         |                    |       
|Cash flows from operating activities                 |                                                                                    |                                                 |         |                    |       
|                                                     | Net income                                                                         |                                                 | $       | 7,189              |       
|                                                     | Adjustments to reconcile net income to net 
cash provided by operating activities: |                                                 |         |                    |       
|                                                     |                                                                                    | Depreciation                                    |         |                    | 6,774 
|                                                     |                                                                                    | Amortization                                    |         |                    | 598   
|                                                     |                                                                                    | (Gain) loss on disposal of assets               |         |                    | (158  
|                                                     |                                                                                    | Deferred income taxes                           |         |                    | (200  
|                                                     |                                                                                    | Compensation earned under restricted stock plan |         |                    | 87    
|                                                     |                                                                                    | Income tax benefit from stock option exercises  |         |                    | 321   
|                                                     |                                                                                    | Benefit plan expense, net of contributions      |         |                    | (446  
|                                                     |                                                                                    | Changes in operating assets and liabilities:    |         |                    |       
|                                                     |                                                                                    | Accounts receivable                             |         |                    | 60    
|                                                     |                                                                                    | Inventories                                     |         |                    | (4,244
|                                                     |                                                                                    | Prepaid expenses and other current assets       |         |                    | (6,631
|                                                     |                                                                                    | Accounts payable                                |         |                    | 5,054 
|                                                     |                                                                                    | Accrued liabilities                             |         |                    | (4,844
|                                                     |                                                                                    |                                                 |         |                    |       
|Net cash provided by operating activities            |                                                                                    |                                                 | 3,560   |                    |       
|                                                     |                                                                                    |                                                 |         |                    |       
|Cash flows from investing activities                 |                                                                                    |                                                 |         |                    |       
|                                                     | Additions to property, plant and equipment                                         |                                                 |         | (3,695             | )     
|                                                     | Proceeds from disposal of assets                                                   |                                                 |         | 510                |       
|                                                     | Sale of investments, net                                                           |                                                 |         | --                 |       
|                                                     | Changes in other assets                                                            |                                                 |         | (421               | )     
|                                                     |                                                                                    |                                                 |         |                    |       
|Net cash used in investing activities                |                                                                                    |                                                 | (3,606  | )                  |       
|                                                     |                                                                                    |                                                 |         |                    |       
|Cash flows from financing activities                 |                                                                                    |                                                 |         |                    |       
|                                                     | Payments on long-term debt                                                         |                                                 |         | --                 |       
|                                                     | Dividends paid                                                                     |                                                 |         | (4,139             | )     
|                                                     | Net proceeds from issuance of common shares                                        |                                                 |         | 868                |       
|                                                     | Repurchase of common shares                                                        |                                                 |         | (8,950             | )     
|                                                     |                                                                                    |                                                 |         |                    |       
|Net cash used in financing activities                |                                                                                    |                                                 | (12,221 | )                  |       
|                                                     |                                                                                    |                                                 |         |                    |       
|                                                     |                                                                                    |                                                 |         |                    |       
|Net increase (decrease) in cash and cash equivalents |                                                                                    |                                                 | (12,267 | )                  |       
|Cash and cash equivalents at beginning of year       |                                                                                    |                                                 | 36,198  |                    |       
|                                                     |                                                                                    |                                                 |         |                    |       
|Cash and cash equivalents at end of year             |                                                                                    | $                                               | 23,931  |                    |       
|                                                     |                                                                                    |                                                 |         |                    |       
|Supplementary disclosures                            |                                                                                    |                                                 |         |                    |       
|                                                     | Cash paid for interest                                                             |                                                 | $       | 287                |       
|                                                     | Cash paid for income taxes                                                         |                                                 | $       | 6,625              |       
|                                                     |                                                                                    |                                                 |         |                    |       
|See notes to consolidated financial statements.      |                                                                                    |                                                 |         |                   





OSHKOSH B'GOSH, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements(Dollars in thousands, except per share amounts)

NOTE 1. 	SIGNIFICANT ACCOUNTING POLICIES

Business

OshKosh B'Gosh, Inc. and its wholly-owned subsidiaries (the Company) are engaged primarily in the design, sourcing and marketing of apparel to wholesale customers and through Company-owned retail stores.

Principles of consolidation

The consolidated financial statements include the accounts of all wholly-owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.



Cash and cash equivalents

Cash equivalents consist of highly liquid debt instruments such as money market accounts and commercial paper with original maturities of three months or less and other financial instruments that can be readily liquidated.  The Company's policy is to invest cash in conservative instruments as part of its cash management program and to evaluate the credit exposure of any investment.  Cash equivalents are stated at cost.

Financial instruments

The fair value of financial instruments, primarily cash equivalents, accounts receivable, accounts payable and accrued liabilities do not materially differ from their carrying value due to their short-term nature.

Accounts receivable

Accounts receivable are recorded net of allowances, which totaled $5,602 in 2003 and $5,237 in 2002.

Inventories



Inventories are stated at the lower of cost or market on the last-in, first-out (LIFO) basis.

Property, plant and equipment

Property, plant and equipment are carried at cost or at management's estimate of fair market value if considered impaired under the provisions of Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" less accumulated depreciation.  Expenditures for improvements that increase asset values and extend usefulness are capitalized.  Expenditures for maintenance and repairs are expensed as incurred.  Depreciation and amortization for financial reporting purposes are calculated using the straight-line method based on the following useful lives:





|                                  | Years   
|--------------------------------- | --------
|Land improvements                 | 10 to 15
|Buildings                         | 10 to 40
|Leasehold improvements            | 5 to 10 
|Machinery, fixtures and equipment | 3 to 10 



Revenue recognition

Revenue within wholesale operations is recognized at the time merchandise is shipped and title and risk of loss is transferred to customers. Wholesale revenue is recorded net of returns, margin support, allowances, and certain co-op advertising support.  Returns are recorded when the company authorizes the return of product.  Margin support arrangements are based on management's estimate of seasonal support levels that correspond with current period product shipments.  Allowances for the settlement of operational chargebacks are estimated based on prior experience and existing open chargeback levels.  Advertising support arrangements not specifically relating to the reimbursement for actual advertising expenses by the Company's customers are recorded in the period corresponding with the shipment of seasonal products, as a reduction of revenues.

Retail store revenues are recognized at the time of sale, net of all promotional discounts.

Royalty income is recognized based on actual sales of licensed products.

Use of estimates



The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

Advertising



Advertising costs are expensed as incurred and totaled $7,867, $11,550 and $14,896 in 2003, 2002 and 2001, respectively.

Stock-based compensation

The Company has elected to use the intrinsic value method permitted under Accounting Principles Board (APB) Opinion No. 25 in accounting for its employee stock options.

Under this method, compensation expense is determined using the difference between the exercise price of stock based compensation and the fair value of the underlying securities.  Compensation expense for the Company's restricted stock grants is reflected over the period in which services were performed and when the financial performance targets are met.

The Company complies with the provisions of SFAS No. 148 "Accounting for Stock-Based Compensation -Transition and Disclosure", and discloses the value of stock option grants, and includes proforma information concerning the impact on net income had the fair value accounting called for under SFAS No. 123 been applied in all periods presented.

Earnings per share



The numerator for the calculation of basic and diluted earnings per share is net income. The denominator is computed as follows (in thousands):



|                                                                     | 2003   | 2002   | 2001  
|-------------------------------------------------------------------- | ------ | ------ | ------
|                                                                     |        |        |       
|Denominator for basic earnings per share--
  Weighted average shares | 11,833 | 12,381 | 12,191
|Employee stock options (treasury stock method)                       | 111    | 260    | 390   
|Denominator for diluted earnings per share                           | 11,944 | 12,641 | 12,581
|                                                                     |        |        |       

The Company had 339,225, 317,500 and 26,500 employee stock options that were anti-dilutive in 2003, 2002 and 2001, respectively, and, accordingly, are not included in the diluted earnings per share calculations.

Fiscal year

The Company's fiscal year is a 52/53-week year ending on the Saturday closest to December 31.  Fiscal 2003 was a 53-week year and ended on January 3, 2004.  Fiscal 2002 and 2001 were 52-week years and ended on December 28, 2002 and December 29, 2001, respectively. All references to years in this report refer to the fiscal years described above.

Comprehensive income



Comprehensive income equaled net income for all years presented.

Reclassifications

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

NOTE 2.	INVENTORIES

A summary of inventories follows:





|                |  | January 3,
2004 |        | December 28,
2002 | 
|--------------- |  | --------------- | ------ | ----------------- | 
|                |  |                 |        |                   | 
|                |  |                 |        |                   | 
|Finished goods  |  | $               | 51,750 |                   | 
|Work in process |  |                 | 8,817  |                   | 
|Raw materials   |  |                 | 791    |                   | 
|                |  |                 |        |                   | 
|Total           |  | $               | 61,358 |                   | 
|                |  |                 |        |                   | 



The replacement cost of inventory exceeds the above LIFO costs by $10,515 and $10,600 at January 3, 2004 and December 28, 2002, respectively.

NOTE 3.	PREPAID EXPENSES AND OTHER CURRENT ASSETS

A summary of prepaid expenses and other current assets follows:



|                                 |   | January 3,
2004 |  | December 28,
2002
|-------------------------------- | - | --------------- |  | -----------------
|                                 |   |                 |  |                  
|                                 |   |                 |  |                  
|Deposit under insurance contract | $ | 4,500           |  | $                
|Prepaid rent                     |   | 1,857           |  |                  
|Other current assets             |   | 1,959           |  |                  
|                                 |   |                 |  |                  
|                                 | $ | 8,316           |  | $                
|                                 |   |                 |  |                  



NOTE 4.	PROPERTY, PLANT AND EQUIPMENT







|                                                | January 3,
2004 | December 28,
2002
|----------------------------------------------- | --------------- | -----------------
|                                                |                 |                  
|                                                |                 |                  
|Land and improvements                           | $               | 2,654            
|Buildings                                       |                 | 13,831           
|Leasehold improvements                          |                 | 21,378           
|Machinery, fixtures and equipment               |                 | 34,517           
|Construction in progress                        |                 | 36               
|                                                |                 |                  
|Total                                           |                 | 72,416           
|Less: accumulated depreciation and amortization |                 | 48,720           
|                                                |                 |                  
|Property, plant and equipment, net              | $               | 23,696           
|                                                |                 |                  

NOTE 5.	CREDIT AGREEMENTS

The Company has an unsecured credit agreement with a number of banks which provides a $75,000 revolving credit facility available for general corporate purposes, including cash borrowings and issuances of letters of credit.  The revolving credit facility expires October 28, 2004.  Letters of credit of approximately $16,930 were outstanding at January 3, 2004, with $58,070 of the unused revolving credit facility available for borrowing.

Under the terms of the agreement, interest rates are determined at the time of borrowing and are based on London Interbank Offered Rates plus additional basis points (effectively 1.90% at January 3, 2004).  Commitment fees of 0.15% are required on the revolving credit facility.  The Company is required to maintain certain financial ratios in connection with this agreement.  As of January 3, 2004, the Company is in compliance with all of its financial covenants.



NOTE 6.	ACCRUED LIABILITIES





|                      |   | January 3,
2004 |  | December 28,
2002
|--------------------- | - | --------------- |  | -----------------
|                      |   |                
|                      |   |                 |  |                  
|Compensation          | $ | 5,125           |  | $                
|Workers' compensation |   | 7,800           |  |                  
|Income taxes          |   | 6,098           |  |                  
|Other                 |   | 14,529          |  |                  
|                      |   |                 |  |                  
|Total                 | $ | 33,552          |  | $                
|                      |   |                 |  |                  



NOTE 7.	LEASES

The Company leases certain property and equipment including a design studio, retail sales facilities, manufacturing facilities and a regional sales office under operating leases. Certain leases provide the Company with renewal options.  Leases for retail sales facilities provide for minimum rentals plus contingent rentals based on sales volume.

Minimum future rental payments under noncancellable operating leases are as follows:



|Fiscal Year                  |  |   |       
|---------------------------- |  | - | ------
|                             |  |   |       
|2004                         |  | $ | 16,855
|2005                         |  |   | 12,795
|2006                         |  |   | 8,714 
|2007                         |  |   | 5,774 
|2008                         |  |   | 3,684 
|Thereafter                   |  |   | 7,598 
|                             |  |   |       
|Total minimum lease payments |  | $ | 55,420
|                             |  |   |       

Total rent expense charged to operations for all operating leases is as follows:



|                   | 2003 | 2002   | 2001
|------------------ | ---- | ------ | ----
|                   |      |        |     
|Minimum rentals    | $    | 21,562 |     
|Contingent rentals |      | 710    |     
|                   |      |        |     
|Total rent expense | $    | 22,272 |     
|                   |      |        |     

NOTE 8.	INCOME TAXES

Income tax expense is comprised of the following:



|         | 2003            | 2002  | 2001 
|-------- | --------------- | ----- | -----
|         |                 |       |      
|Current: |                 |       |      
|         | Federal         | $     | 3,659
|         | State and local |       | 586  
|Deferred |                 | (200  | )    
|         |                 |       |      
|Total    | $               | 4,045 |      
|         |                 |       |      

Deferred tax assets and liabilities relate to temporary differences between the financial reporting and income tax basis of Company assets and liabilities and include the following components:



|                                          | January 3,                     | December 28,
|----------------------------------------- | ------------------------------ | ------------
|                                          | 2004                           | 2002        
|                                          | [Assets (Liabilities)]        
|                                          |                                |             
|                                          |                               
|Current deferred taxes                    |                                |             
|                                          | Accounts receivable allowances | $           
|                                          | Inventory valuation            |             
|                                          | Accrued liabilities            |             
|                                          | Other                          |             
|                                          |                                |             
|Total net current deferred tax assets     | $                              | 10,100      
|                                          |                                |             
|Non-current deferred taxes                |                                |             
|                                          | Depreciation                   | $           
|                                          | Deferred employee benefits     |             
|                                          | Trademark                      |             
|                                          | Other                          |             
|                                          |                                |             
|Total net non-current deferred tax assets | $                              | 2,000       
|                                          |                                |             

Substantially all income is subject to United States taxation.  A reconciliation of the federal statutory income tax rate to the effective tax rates reflected in the consolidated statements of income follows:

|                            | 2003                                                            |      | 2002 |      | 2001 |  
|--------------------------- | --------------------------------------------------------------- | ---- | ---- | ---- | ---- | -
|                            |                                                                 |      |      |      |      |  
|Federal statutory tax rate  | 34.0                                                            | %    |      | 35.0 | %    |  
|Differences resulting from: |                                                                 |      |      |      |      |  
|                            | State and local income taxes, net of federal income tax benefit | 3.4  |      |      | 2.2  |  
|                            | Other, including federal employment credits                     | (1.4 | )    |      | (.2  | )
|                            |                                                                 |      |      |      |      |  
|Total                       | 36.0                                                            | %    |      | 37.0 | %    |  
|                            |                                                                 |      |      |      |      |  



NOTE 9. 	RETIREMENT PLANS

The Company has defined contribution and defined benefit pension plans covering substantially all full-time U.S. employees.  Charges to operations by the Company for these plans totaled $4,173, $3,658 and $2,047 for 2003, 2002 and 2001, respectively.

Defined benefit plans

The Company sponsors several defined benefit pension plans covering certain U.S. hourly and salaried employees.  These pension plan assets are invested in group annuity contracts and equity securities based on the Company's overall strategic investment direction as follows:



|                                   | Target Allocation
Percentage |   | Expected Long-Term
Rate of Return
|---------------------------------- | ---------------------------- | - | ---------------------------------
|                                   |                              |   |                                  
|                                   |                              |   |                                  
|Equity investments                 | 50                           | % |                                  
|Intermediate term debt investments | 40                           | % |                                  
|Real estate investments            | 10                           | % |                                  
|                                   |                              |   |                                  
|Total                              | 100                          | % |                                  
|                                   |                              |   |                                  

The long-term rate of return assumption considers historic returns adjusted for changes in overall economic conditions that may affect future returns and a weighting of each investment class.

The defined benefit pension plan assets were invested as follows as of the end of each year:



|                                   | 2003 |   | 2002
|---------------------------------- | ---- | - | ----
|                                   |      |   |     
|                                   |      |   |     
|Equity investments                 | 50   | % |     
|Intermediate term debt investments | 39   | % |     
|Real estate investments            | 11   | % |     
|                                   |      |   |     
|Total                              | 100  | % |     
|                                   |      |   |     



The actuarial computations utilized the following assumptions, using year-end measurement dates:



|Benefit Obligation                      | 2003  |   | 2002
|--------------------------------------- | ----- | - | ----
|                                        |       |   |     
|                                        |       |   |     
|Discount rate                           | 6.0   | % |     
|Rates of increase in compensation level | 0-4.5 | % |     
|                                        |       |   |     





|Net Periodic Pension Cost                   | 2003  | 2002 | 2001 
|------------------------------------------- | ----- | ---- | -----
|                                            |       |      |      
|Discount rate                               | 6.5   | %    | 7.0  
|Expected long-term rate of return on assets | 8.0   | %    | 8.0  
|Rates of increase in compensation levels    | 0-4.5 | %    | 0-4.5
|                                            |       |      |      

Net periodic pension cost was comprised of:



|                                      |  |   | 2003   |   |   | 2002   |   |   | 2001   |  
|------------------------------------- |  | - | ------ | - | - | ------ | - | - | ------ | -
|                                      |  |   |        |   |   |        |   |   |        |  
|Service cost                          |  | $ | 2,184  |   | $ | 2,053  |   | $ | 1,894  |  
|Interest cost                         |  |   | 2,806  |   |   | 2,667  |   |   | 2,540  |  
|Expected return on plan assets        |  |   | (2,926 | ) |   | (2,892 | ) |   | (3,692 | )
|Amortization of prior service cost    |  |   | 323    |   |   | 313    |   |   | 331    |  
|Amortization of transition obligation |  |   | (151   | ) |   | (159   | ) |   | (159   | )
|Recognized actuarial (gain) loss      |  |   | 98     |   |   | (273   | ) |   | (827   | )
|                                      |  |   |        |   |   |        |   |   |        |  
|Net periodic pension cost             |  | $ | 2,334  |   | $ | 1,709  |   | $ | 87     |  
|                                      |  |   |        |   |   |        |   |   |        |  

A reconciliation of changes in the projected pension benefit obligation and plan assets follows:



|                                                  | 2003            | 2002            
|------------------------------------------------- | --------------- | ----------------
|                                                  |                 |                 
|Change in projected benefit obligation            |                 |                 
|Projected benefit obligation at beginning of year | $       44,727  | $        38,751 
|Service cost                                      | 2,184           | 2,053           
|Interest cost                                     | 2,806           | 2,667           
|Amendments                                        | 82              | 54              
|Actuarial loss                                    | 3,333           | 3,499           
|Benefits paid                                     | (1,943)         | (2,297)         
|                                                  |                 |                 
|Projected benefit obligation at end of year       | 51,189          | 44,727          
|                                                  |                 |                 
|                                                  |                 |                 
|Change in plan assets                             |                 |                 
|Fair value of plan assets at beginning of year    | 36,569          | 35,612          
|Actual return on plan assets                      | 6,326           | (2,783)         
|Company contributions                             | 3,527           | 6,037           
|Benefits paid                                     | (1,943)         | (2,297)         
|                                                  |                 |                 
|Fair value of plan assets at end of year          | 44,479          | 36,569          
|                                                  |                 |                 
|                                                  |                 |                 
|Funded status                                     |                 |                 
|Funded status of plan                             | (6,710)         | (8,158)         
|Unrecognized net actuarial loss                   | 3,711           | 3,877           
|Unrecognized prior service cost                   | 1,016           | 1,256           
|Unrecognized transition obligation                | --              | (151)           
|                                                  |                 |                 
|Accrued benefit cost                              | $       (1,983) | $        (3,176)
|                                                  |                 |                 

Amounts recognized in the Consolidated Balance Sheets:



|                          |  |   | 2003   |   | 2002 |       
|------------------------- |  | - | ------ | - | ---- | ------
|                          |  |   |        |   |      |       
|Prepaid benefit cost      |  | $ | 4,009  |   | $    | 2,978 
|Accrued benefit liability |  |   | (5,992 | ) |      | (6,154
|                          |  |   |        |   |      |       
|                          |  | $ | (1,983 | ) | $    | (3,176
|                          |  |   |        |   |      |       



Amounts applicable to the Company's pension plans with accumulated benefit obligations in excess of plan assets are as follows:



|                                | ABO > Assets
January 3, | ABO > Assets
December 28,
|------------------------------- | ----------------------- | -------------------------
|                                | 2004                    | 2002                     
|                                |                         |                          
|Projected benefit obligations   | $          2,672        | $          8,750         
|Accumulated benefit obligations | 2,261                   | 7,769                    
|Fair value of plan assets       | --                      | 6,166                    
|                                |                         |                          



Total accumulated benefit obligations for all defined benefit plans totaled $39,466 and $29,268 at January 3, 2004 and December 28, 2002, respectively.

While limited to funding requirements of federal laws and regulations, the Company intends to annually fund the qualified plans in an amount sufficient to have plan assets in excess of the accumulated benefit obligation at year end.

The Company also sponsors an unfunded defined benefit post-retirement life and health insurance plan that covers qualifying salaried employees.

Defined contribution plans

The Company maintains a defined contribution retirement plan covering certain salaried employees.  Annual contributions are discretionary and are determined by the Company's Retirement Plan Committee.  Charges to operations by the Company for contributions under this plan totaled $1,292, $1,222 and $1,278, for 2003, 2002 and 2001, respectively.

The Company maintains a retirement plan covering certain salaried and hourly employees pursuant to Section 401(k) of the Internal Revenue Code, whereby participants may contribute a percentage of compensation, but not in excess of the maximum allowed under the Code.  Matching contributions by the Company are discretionary, and amounted to approximately $432, $439 and $402 for 2003, 2002 and 2001, respectively.

The Company also has a supplemental retirement program for designated employees. Annual provisions to this unfunded plan are discretionary and are determined by the Company's Retirement Plan Committee.  Charges to operations by the Company for additions to this plan totaled $115, $288 and $280 for 2003, 2002 and 2001, respectively.

NOTE 10.	 COMMON STOCK

The Company maintains a stock conversion plan whereby shares of Class B common stock may be converted to an equal number of Class A common shares.

The Company's common stock authorization provides that dividends be paid on both the Class A and Class B common stock at any time that dividends are paid on either.  Whenever dividends (other than dividends of Company stock) are paid on the common stock, each share of Class A common stock is entitled to receive 115% of the dividend paid on each share of Class B common stock.

The Class A common stock shareholders are entitled to receive a liquidation preference of $1.875 per share before any payment or distribution to holders of the Class B common stock.  Thereafter, holders of the Class B common stock are entitled to receive $1.875 per share before any further payment or distribution to holders of the Class A common stock.  Thereafter, holders of the Class A common stock and Class B common stock share on a pro rata basis in all payments or distributions upon liquidation, dissolution or winding up of the Company.

The Class A common stock shareholders have the right to elect or remove, as a class, 25% of the entire board of directors of the Company.  Class B common stock shareholders are entitled to elect or remove, as a class, the other 75% of the directors (subject to any rights granted to any series of preferred stock) and are entitled to one vote per share on all matters (including an increase or decrease in the unissued authorized capital stock of any class) presented to the shareholders for vote.

On December 6, 1999, the Company's Board of Directors authorized a repurchase program for up to 1.5 million shares of its Class A common stock.  On December 11, 2000, the Company's Board of Directors authorized an addition of 1.0 million shares to this repurchase program.  During 2003, 2002 and 2001, the Company repurchased 400,400, 712,000 and 397,300 shares, respectively, of its Class A common stock under this program for approximately $8,950, $21,244 and $10,344, respectively.  At January 3, 2004, the Company had 151,200 shares remaining under its current repurchase program.

Options

The Company has elected to follow Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees", in accounting for its employee stock options.  Under APB No. 25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant and the number of shares granted is fixed, no compensation expense is recognized.

The Company's Incentive Stock Option Plans have authorized the grant of options to management personnel and directors for up to 3,125,000 of the Company's Class A common stock.  As of January 3, 2004, 572,250 shares are available for grant.  Options granted generally have 10 year terms and vest ratably over a four-year period following date of grant.

The following pro forma information regarding net income and net income per share required by SFAS No. 148, "Accounting for Stock Based Compensation-Transition and Disclosure," has been determined as if the Company had accounted for its employee stock options under the fair value method.  The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2003, 2002 and 2001, respectively: risk-free interest rates of 3.90%, 4.91% and 5.00%; annual dividend yield of 1.19%, 0.68% and 1.14%; volatility factors of the expected market price of the Company's common stock of .364, .514 and .508; and a weighted-average expected life of the option of approximately eight years.  Changes in these subjective assumptions can significantly affect the fair value calculations.

The estimated fair values of the options are amortized to expense over the options' vesting periods:



|                                        | 2003                                                                                 | 2002         | 2001       
|--------------------------------------- | ------------------------------------------------------------------------------------ | ------------ | -----------
|                                        |                                                                                      |              |            
|Net income as reported                  | $    7,189                                                                           | $    32,045  | $    32,808
|Add: Stock based compensation included  |                                                                                      |              |            
|                                        | in net income as reported, net of related tax effects                                | 55           | 184        
|Deduct stock based compensation         |                                                                                      |              |            
|                                        | determined under fair value based methods for all awards, net of related tax effects | (1,706)      | (2,256)    
|                                        |                                                                                      |             
|Pro forma net income                    | $    5,538                                                                           | $     29,973 | $    31,255
|                                        |                                                                                      |             
|Net income per common share as reported |                                                                                      |              |            
|Basic                                   | .61                                                                                  | 2.59         | 2.69       
|Diluted                                 | .60                                                                                  | 2.54         | 2.61       
|Pro forma net income per common share   |                                                                                      |              |            
|Basic                                   | .47                                                                                  | 2.42         | 2.56       
|Diluted                                 | .47                                                                                  | 2.39         | 2.51       
|                                        |                                                                                      |             



A summary of the Company's stock option activity and related information follows:



|                                                             | 2003            | 2002                            | 2001           
|------------------------------------------------------------ | --------------- | ------------------------------- | ---------------
|                                                             |                 |                                 |                
|                                                             | Options
(000's) | Weighted
average exercise
price | Options
(000's)
|                                                             |                 |                                 |                
|                                                             |                 |                                 |                
|Outstanding-beginning
of year                                | 1,029           | $      26                       | 1,199          
|Granted                                                      | 240             | 24                              | 345            
|Exercised                                                    | (115)           | 18                              | (441)          
|Forfeited                                                    | (99)            | 31                              | (74)           
|                                                             |                 |                                 |                
|Outstanding -end of 
 year                                   | 1,055           | $    26                         | 1,029          
|                                                             |                 |                                 |                
|Exerciseable at end 
of year                                 | 540             | $    23                         | 419            
|Weighted-average 
fair value of  options
granted during year |                 | $ 7.15                          |                
|                                                             |                 |                                 |                





|                         | Options outstanding        |                                           | Options exerciseable            
|------------------------ | -------------------------- | ----------------------------------------- | --------------------------------
|                         |                            |                                           |                                 
|Range of
exercise prices | Number outstanding
(000's) | Weighted-
average
remaining
contract life | Weighted-
average
exercise price
|                         |                            |                                           |                                 
|                         |                            |                                           |                                 
|$  7 to  $  9            | 2                          | 3.1                                       | $       8                       
|$15 to  $17              | 151                        | 6.1                                       | 16                              
|$18 to  $21              | 379                        | 6.0                                       | 19                              
|$24 to  $34              | 256                        | 8.9                                       | 25                              
|$36 to  $42              | 267                        | 8.1                                       | 41                              
|                         |                            |                                           |                                 
|                         | 1,055                      |                                           |                                 
|                         |                            |                                           |                                 

Restricted Stock

On February 15, 2000, the Company issued 55,000 shares of restricted stock to certain key employees.  The restrictions lapse over four years based on attainment of certain financial performance targets and continued employment.  Under APB No. 25, compensation expense was reflected over the period in which services were performed and when the financial performance targets were met.

NOTE 11.	BUSINESS AND CREDIT CONCENTRATIONS

Operations of the Company occur primarily within the United States and its customers are not concentrated in any geographic region.  The Company provides credit, in the normal course of business, to department and specialty stores.  The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses.

In 2003 and 2002 no individual customer had sales in excess of 10% of the Company's net sales.  In 2001 sales to a wholesale customer amounted to approximately 11% of net sales.

NOTE 12.	LITIGATION

The Company is subject to various legal actions and proceedings in the normal course of business.  Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, management does not believe the final outcome will have a significant affect on the consolidated financial statements.

NOTE 13.	SEGMENT REPORTING

The Company designs, sources and markets apparel products using primarily the OshKosh B'Gosh brand.  The apparel products are primarily marketed in two distinct distribution channels:  domestic wholesale and through Company-owned retail stores. The Company designs and sources product to meet the needs of these distribution channels through a single procurement business unit.

Certain operations have been segregated into segments as defined by SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information".  The Company manages its business operations by periodic analysis of business unit results.  For this purpose, domestic wholesale, retail, and procurement are separately identified for management reporting and are considered segments as defined by SFAS No. 131.

Management evaluates the operating performance of each of its business units based on income from operations as well as return on net assets.  For this purpose, product is transferred from procurement to the domestic wholesale and retail business units at cost.  However, procurement receives a markup on product sold by the Company's wholesale and retail business units.  Accounting policies used for segment reporting are consistent with the Company's overall accounting policies, except that inventories are valued on a FIFO basis.  In addition, interest income, interest expense, certain corporate office expenses and the effects of the LIFO inventory valuation method are not allocated to individual business units, and are included in the All Other/Corporate column below.

Segment assets include all assets used in the operation of each business unit, including accounts receivable, inventories and property, plant and equipment.  Certain other corporate assets that cannot be specifically identified with the operation of a business unit are not allocated.  Financial information for the Company's reportable segments follows:



|                                          | Domestic
Wholesale | Retail     | Procurement    | All
Other/ Corporate | Total     
|----------------------------------------- | ------------------ | ---------- | -------------- | -------------------- | ----------
|                                          |                    |            |                |                      |           
|                                          |                    |            |                |                      |           
|January 3, 2004                           |                    |            |                |                      |           
|Net sales                                 | $ 165,700          | $ 248,694  | $         141  | $  2,737             | $ 417,272 
|Income (loss) before
  income taxes       | 2,108              | 9,618      | (1,562)        | 1,070                | 11,234    
|Assets                                    | 34,844             | 63,709     | 15,265         | 38,107               | 151,925   
|Depreciation expense                      | 1,283              | 4,375      | 487            | 629                  | 6,774     
|Property, plant and
  equipment additions | 494                | 2,963      | 165            | 73                   | 3,695     
|                                          |                    |            |                |                      |           
|                                          |                    |            |                |                      |           
|December 28, 2002                         |                    |            |                |                      |           
|Net sales                                 | $ 182,744          | $ 250,539  | $         180  | $  3,526             | $ 436,989 
|Income before income
  taxes              | 16,541             | 22,354     | 11,048         | 918                  | 50,861    
|Assets                                    | 44,026             | 48,983     | 15,638         | 47,107               | 155,754   
|Depreciation expense                      | 1,651              | 4,013      | 555            | 687                  | 6,906     
|Property, plant and
  equipment additions | 425                | 4,833      | 108            | 34                   | 5,400     
|                                          |                    |            |                |                      |           
|                                          |                    |            |                |                      |           
|December 29, 2001                         |                    |            |                |                      |           
|Net sales                                 | $ 213,588          | $  245,112 | $            5 | $     4,364          | $  463,069
|Income before income
  taxes              | 18,671             | 27,732     | 4,931          | 1,929                | 53,263    
|Assets                                    | 57,831             | 46,207     | 13,753         | 43,549               | 161,340   
|Depreciation expense                      | 1,651              | 3,662      | 1,073          | 824                  | 7,210     
|Property, plant and
  equipment additions | 248                | 4,166      | 669            | 23                   | 5,106     
|                                          |                    |            |                |                      |           



NOTE 14.	QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

|                                    | 2003 Quarter Ended
|----------------------------------- | ------------------
|                                    |                   
|                                    | April 5,
2003     
|                                    |                   
|Net sales                           | $99,287           
|Gross profit                        | 40,704            
|Net income (loss)                   | 1,281             
|Net income (loss) per common share: |                   
|Basic                               | .11               
|Diluted                             | .11               
|                                    |                   



|                             | 2002 Quarter Ended
|---------------------------- | ------------------
|                             |                   
|                             | March 30,
2002    
|                             |                   
|Net sales                    | $                 
|Gross profit                 |                   
|Net income                   |                   
|Net income per common share: |                   
|Basic                        |                   
|Diluted                      |                   
|                             |                   





ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None



ITEM 9A.	CONTROLS AND PROCEDURES



Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission is recorded, processed, summarized and reported on a timely basis.  The Company's principal executive officer and principal financial officer have reviewed and evaluated the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this report on Form 10-K (the "Evaluation Date").  Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are effective in bringing to their attention on a timely basis material information relating to the Company required to be included in the Company's periodic filings under the Exchange Act.

Changes in Internal Controls

There have not been any significant changes in the Company's internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the Company's most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART III

ITEM 10. 	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is incorporated by reference to the definitive Proxy Statement of OshKosh B'Gosh, Inc. for its annual meeting to be held on May 4, 2004, under the captions "Directors and Executive Officers" and "Section 16(a) Beneficial Ownership Reporting Compliance".

ITEM 11.  	EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the definitive Proxy Statement of OshKosh B'Gosh, Inc. for its annual meeting to be held on May 4, 2004, under the captions "Management Compensation" and "Directors' Compensation".

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference to the definitive Proxy Statement of OshKosh B'Gosh, Inc. for its annual meeting to be held on May 4, 2004, under the captions "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plans".

ITEM 13.  	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated by reference to the definitive Proxy Statement of OshKosh B'Gosh, Inc. for its annual meeting to be held on May 4, 2004, under the caption "Directors and Executive Officers".



ITEM 14.  	PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference to the definitive Proxy Statement of OshKosh B'Gosh, Inc. for its annual meeting to be held on May 4, 2004, under the caption, "Report of the Audit Committee".

PART IV

ITEM 15.  	EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)	(1)	Financial Statements

Financial statements for OshKosh B'Gosh, Inc. listed in the Index to Financial Statements and Supplementary Data are filed as part of this Annual Report.

(2)	Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts

Schedules not included have been omitted because the schedules are not applicable, the amounts are immaterial or the required information is included in the consolidated financial statements or notes thereto.

(3)	Index to Exhibits

(b)	Reports on Form 8-K

On July 23, 2003, the Registrant filed an 8-K to accompany its press release announcing certain financial results for the second quarter ended July 5, 2003.

On August 7, 2003, the Registrant filed a report on Form 8-K to accompany its press release announcing an increase in the quarterly cash dividend rates.

On August 28, 2003, the Registrant filed a report on Form 8-K announcing the Company's Senior Vice President of Product Development's retirement in December 2003.

On October 10, 2003, the Registrant filed a report on Form 8-K to accompany its press release announcing that James J. Martin will assume the position of Senior Vice President of Merchandising and Special Markets and Rich Kaplan has been promoted to Vice President of Wholesale.  Both moves are related to the retirement of the Company's Senior Vice President of Product Development.

On October 22, 2003, the Registrant filed a report on Form 8-K to accompany its press release announcing certain financial results for the third quarter ended October 4, 2003.

On November 6, 2003 the Registrant filed a report on Form 8-K to report on an amended credit agreement.  This $75,000,000 revolving credit agreement (the "Credit Agreement"), originally dated as of October 30, 2002, between the Company and U.S. Bank National Association and participating banks, was amended to extend its maturity date to October 28, 2004.

On December 11, 2003, the Registrant filed a report on Form 8-K accompanying its press release providing an update on recent business developments including the financial impact on its business of an anticipated significant reduction in sales to a major customer.

On February 4, 2004, the Registrant filed a report on Form 8-K accompanying its press release announcing certain financial results for the fourth quarter and year ended January 3, 2004.

On February 18, 2004, the Registrant filed a report on Form 8-K to accompany its press release announcing that David L. Omachinski has been promoted to President and Chief Operating Officer and that Michael L. Heider has been promoted to Vice President Finance, Treasurer and Chief Financial Officer.

(c)	Exhibits

See Exhibit Index, attached hereto.



SIGNATURES



Date:  March 16, 2004

Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

OSHKOSH B'GOSH, INC.

|                                                              
|--------------------------------------------------------------
|By:  /S/ DOUGLAS W. HYDE                                      
|Chairman of the Board and Chief Executive Officer             
|                                                              
|By:  /S/ MICHAEL L. HEIDER                                    
|Vice President Finance, Treasurer and Chief Financial Officer 
|(Principal Financial Officer and Principal Accounting Officer)







Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

|                             | 
|---------------------------- | 
|Signature                    | 
|                             | 
|                             | 
|By:  /S/ DOUGLAS W. HYDE     | 
|                             | 
|                             | 
|                             | 
|By:  /S/ DAVID L. OMACHINSKI | 
|                             | 
|                             | 
|                             | 
|By:  /S/ MICHAEL L. HEIDER   | 
|                             | 
|                             | 
|                             | 
|By:  /S/ STEVEN R. DUBACK    | 
|                             | 
|                             | 
|By:  /S/ WILLIAM F. WYMAN    | 
|                             | 
|                             | 
|                             | 
|By:  /S/ PAUL A. LOWRY       | 
|                             | 
|                             | 
|By:  /S/ PHOEBE A. WOOD      | 
|                             | 
|                             | 
|By:  /S/ SHIRLEY A. DAWE     | 
|                             | 
|                             | 
|By:  /S/ TAMARA L. HEIM      | 
|                             | 
|                             | 
|By:  /S/ ROBERT C. SIEGEL    | 
|                             | 
|                             | 



Exhibit Index

3.1   	Restated Certificate of Incorporation of OshKosh B'Gosh, Inc., dated May 9, 2002 previously filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2002, Commission File Number 0-13365, is incorporated herein by reference.

3.2	By-laws of OshKosh B'Gosh, Inc., as amended.



*10.1	OshKosh B'Gosh, Inc. 401(K) Plan, as amended into which to OshKosh B'Gosh Profit Sharing Plan was merged, effective January 1, 2003.



*10.2	OshKosh B'Gosh, Inc. Pension Plan, previously filed as Exhibit 10.2 to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2002, Commission File Number 0-13365, is incorporated herein by reference.

*10.3	OshKosh B'Gosh, Inc. Executive Non-Qualified Profit Sharing Plan, as amended and restated.

*10.4	OshKosh B'Gosh, Inc. Excess Benefit Plan, previously filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2002, Commission File Number 0-13365, is incorporated herein by reference.



*10.5	OshKosh B'Gosh, Inc. Executive Deferred Compensation Plan, previously filed as Exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2002, Commission File Number 0-13365, is incorporated herein by reference.

*10.6	OshKosh B'Gosh, Inc. Officers Medical and Dental Reimbursement Plan, as amended, previously filed as Exhibit 10.6 to the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2000, Commission File Number 0-13365, is incorporated herein by reference.

*10.7	OshKosh B'Gosh, Inc. 1994 Incentive Stock Plan, as amended, previously filed as Exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, Commission File Number 0-13365, is incorporated herein by reference.

10.8	OshKosh B'Gosh, Inc. 1995 Outside Director's Stock Option Plan, previously filed as Exhibit 10.8 to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2002, Commission File Number 0-13365, is incorporated herein by reference.

10.9	Credit agreement between OshKosh B'Gosh, Inc. and U.S. Bank N.A. and participating banks as amended, dated as of October 30, 2003.

21.	List of subsidiaries

23.	Consent of Deloitte & Touche LLP

31.1	Certification by the Chief Executive Officer

31.2	Certification by the Vice President Finance, Treasurer and Chief Financial Officer

32.1	Section 906 of the Sarbanes-Oxley Act Certification by the Chief Executive Officer

32.2	Section 906 of the Sarbanes-Oxley Act Certification by the Vice President Finance, Treasurer and Chief Financial Officer

*	Represents a plan that covers compensation, benefits and/or related arrangements for executive management.



OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Schedule II
Valuation and Qualifying Accounts(Dollars in thousands)





|                                                                            | 2003      | 2002     | 2001    
|--------------------------------------------------------------------------- | --------- | -------- | --------
|                                                                            |           |          |         
|Accounts receivable - allowances:                                           |           |          |         
|Balance at beginning of period                                              | $   5,237 | $  7,075 | $  5,510
|Charged to costs and expenses                                               | 48,204    | 35,534   | 31,177  
|Deductions - bad debts and other
 allowances written off, net of recoveries | (47,839)  | (37,372) | (29,612)
|                                                                            |           |          |         
|                                                                            |           |          |         
|Balance at end of period                                                    | $   5,602 | $  5,237 | $  7,075
|                                                                            |           |          |