<PAGE>



                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

(Mark One)

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the quarterly period ended July 31, 2003

                                      OR

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the transition period from           to
                                   ----------    ----------

                         Commission File Number 0-13283

                             REX Stores Corporation
             (Exact name of registrant as specified in its charter)

<TABLE>

<S>                                               <C>
                   Delaware                            31-1095548
      (State or other jurisdiction of               (I.R.S. Employer
       incorporation or organization)            Identification Number)

     2875 Needmore Road, Dayton, Ohio                    45414
 (Address of principal executive offices)              (Zip Code)

                                 (937) 276-3931
              (Registrant's telephone number, including area code)

</TABLE>

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes (X) No ( )

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

At the close of business on September 12, 2003, the registrant had 10,839,499
shares of Common Stock, par value $.01 per share, outstanding.




<PAGE>



                     REX STORES CORPORATION AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>

                                                                      Page

<S>                                                                    <C>
PART I.   FINANCIAL INFORMATION

Item 1.   Consolidated Condensed Financial Statements

            Consolidated Condensed Balance Sheets..................... 3
            Consolidated Condensed Statements of Income............... 4
            Consolidated Condensed Statements of
               Shareholders' Equity................................... 5
            Consolidated Condensed Statements of
               Cash Flows............................................. 6
            Notes to Consolidated Condensed Financial
               Statements............................................. 7

Item 2.   Management's Discussion and Analysis of
            Financial Condition and Results of Operations.............11

Item 3.   Quantitative and Qualitative Disclosures About
            Market Risk...............................................17

Item 4.  Controls and Procedures......................................17

PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.............................18
</TABLE>

                                 2




<PAGE>




PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                     REX STORES CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                   A S S E T S

<TABLE>
<CAPTION>
                                                              July 31     January 31              July 31
                                                               2003          2003                   2002
                                                                        (In Thousands)
                                                             Unaudited                           Unaudited
<S>                                                           <C>         <C>                   <C>
CURRENT ASSETS:
      Cash and cash equivalents                              $   2,116    $   1,380             $  10,039
      Accounts receivable, net                                   1,844        3,413                   548
      Synthetic fuel receivable                                    400        6,619                 3,327
      Merchandise inventory                                    169,101      142,063               138,860
      Prepaid expenses and other                                 3,068        2,567                 3,073
      Future income tax benefits                                10,350       10,350                12,614
                                                             ---------    ---------             ---------
        Total current assets                                   186,879      166,392               168,461

PROPERTY AND EQUIPMENT, NET                                    133,439      134,563               136,940
OTHER ASSETS                                                     2,434        1,656                  --
FUTURE INCOME TAX BENEFITS                                       6,070        6,070                 7,320
SYNTHETIC FUEL ESCROW                                           10,042         --                    --
RESTRICTED INVESTMENTS                                           2,250        2,241                 2,232
                                                             ---------    ---------             ---------
        Total assets                                         $ 341,114    $ 310,922             $ 314,953
                                                             =========    =========             =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
      Notes payable                                          $  30,775    $  13,451             $      65
      Current portion of long-term debt                          6,478        5,657                 4,783
      Current portion of deferred income
         and deferred gain on sale and
         leaseback                                              11,301       11,107                11,096
      Accounts payable, trade                                   45,407       27,417                41,138
      Accrued income taxes                                          51         --                   2,847
      Accrued payroll                                            4,495        6,750                 4,914
      Other current liabilities                                  8,738        8,669                 9,454
                                                             ---------    ---------             ---------
        Total current liabilities                              107,245       73,051                74,297
                                                             ---------    ---------             ---------

LONG-TERM LIABILITIES:
      Long-term mortgage debt                                   60,504       64,426                67,723
      Deferred income                                           13,015       13,993                14,069
      Deferred gain on sale and
         leaseback                                                  49          348                   646
                                                             ---------    ---------             ---------
        Total long-term liabilities                             73,568       78,767                82,438
                                                             ---------    ---------             ---------

SHAREHOLDERS' EQUITY:
      Common stock                                                 278          277                   277
      Paid-in capital                                          121,786      121,282               119,026
      Retained earnings                                        163,945      157,640               144,283
      Treasury stock                                          (125,708)    (120,095)             (105,368)
                                                             ---------    ---------             ---------
        Total shareholders' equity                             160,301      159,104               158,218
                                                             ---------    ---------             ---------
        Total liabilities and
             shareholders' equity                            $ 341,114    $ 310,922             $ 314,953
                                                             =========    =========             =========

</TABLE>


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

                                       3


<PAGE>




                     REX STORES CORPORATION AND SUBSIDIARIES

                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                    Unaudited
<TABLE>
<CAPTION>

                                                          Three Months Ended                 Six Months Ended
                                                                July 31                           July 31
                                                        2003               2002            2003            2002
                                                               (In Thousands, Except Per Share Amounts)

<S>                                                   <C>                 <C>             <C>             <C>
NET SALES                                              $91,436            $93,070         $186,847       $186,606

COSTS AND EXPENSES:
     Cost of merchandise sold                           63,079             63,740          130,652        130,022
     Selling, general and administrative expenses
                                                        25,979             26,012           51,901         51,017
                                                     ---------          ---------         --------       --------
Total costs and expenses                                89,058             89,752          182,553        181,039
                                                     ---------          ---------         --------       --------

INCOME FROM OPERATIONS                                   2,378              3,318            4,294          5,567

INVESTMENT INCOME                                           23                133               40            283
INTEREST EXPENSE                                        (1,297)            (1,267)          (2,497)        (2,850)
GAIN ON SALE OF REAL ESTATE                                  -                  -              386              -
INCOME FROM LIMITED PARTNERSHIPS                         3,119              5,004            6,183          9,640
                                                     ---------          ---------         --------       --------
Income before provision for income taxes                 4,223              7,188            8,406         12,640

PROVISION FOR INCOME TAXES                               1,056              1,797            2,101          3,065
                                                     ---------          ---------         --------       --------
NET INCOME                                             $ 3,167            $ 5,391          $ 6,305        $ 9,575
                                                     =========          =========         ========       ========

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC             10,705             12,522           10,821         12,411
                                                     =========          =========         ========       ========
BASIC NET INCOME PER SHARE                              $ 0.30             $ 0.43           $ 0.58         $ 0.77
                                                     =========          =========         ========       ========

WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED           12,626             14,728           12,567         14,755
                                                     =========          =========         ========       ========

DILUTED NET INCOME PER SHARE                            $ 0.25             $ 0.37           $ 0.50         $ 0.65
                                                     =========          =========         ========       ========

</TABLE>
              The accompanying notes are an integral part of
        these unaudited consolidated condensed financial statements.



                                       4


<PAGE>



                     REX STORES CORPORATION AND SUBSIDIARIES

            CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
                                    Unaudited
<TABLE>
<CAPTION>

                                        Common Shares
                                 ----------------------------
                                 Issued               Treasury                                              Total
                          -------------------    -------------------        Paid-in      Retained       Shareholders'
                          Shares      Amount     Shares       Amount        Capital      Earnings          Equity
                                                            (In Thousands)

<S>                        <C>         <C>        <C>         <C>           <C>           <C>             <C>
Balance at
  January 31, 2003         27,746      $ 277      16,607      $120,095      $121,282      $157,640        $159,104

Net income                      -          -          -             -              -         6,305           6,305

Treasury stock
  acquired                      -          -        560         6,060              -             -          (6,060)

Stock options
exercised and
related tax effects            44          1        (62)         (447)           504             -             951
                           ------     ------     ------      --------       -------- -    --------        --------
Balance at
  July 31, 2003            27,790      $ 278     17,105      $125,708       $121,786      $163,945        $160,301
                           ======     ======     ======      ========       ========      ========        ========
</TABLE>

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


                                       5


<PAGE>




                     REX STORES CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                    Unaudited

<TABLE>
<CAPTION>
                                                                        Six Months Ended
                                                                              July 31
                                                                      2003             2002
                                                                         (In Thousands)
<S>                                                               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                                   $  6,305          $  9,575
      Adjustments to reconcile net
      income to net cash provided
      by (used in) operating activities:
         Depreciation and amortization, net                           2,056             2,167
         Income of limited partnerships                              (6,183)           (9,640)
         (Gain) Loss on disposal of fixed assets                       (320)              262
         Deferred income                                               (784)           (1,798)
      Changes in assets and liabilities:
         Accounts receivable                                          1,569               572
         Merchandise inventory                                      (27,038)          (37,843)
         Other current assets                                          (503)             (522)
         Other long term assets                                        (778)               -
         Accounts payable, trade                                     17,990             8,519
         Other current liabilities                                   (2,135)              667
                                                                  ---------          --------
NET CASH USED IN
      OPERATING ACTIVITIES                                           (9,821)          (28,041)
                                                                  ---------          --------

CASH FLOWS FROM INVESTING ACTIVITIES:
         Capital expenditures                                        (1,752)             (468)
         Proceeds from sale of partnership
                  interest                                            2,361             7,858
         Proceeds from sale of real estate
                  and fixed assets                                      843               300
         Restricted investments                                          (9)              (10)
                                                                  ---------          --------
NET CASH PROVIDED BY
      INVESTING ACTIVITIES                                            1,443             7,680
                                                                  ---------          --------
CASH FLOWS FROM FINANCING ACTIVITIES:
         Increase (Decrease) in notes payable                        17,324                (1)
         Payments of long-term debt                                  (3,101)           (9,710)
         Stock options exercised and related
                  tax effects                                           504             2,328
         Treasury stock issued                                          447               373
         Treasury stock acquired                                     (6,060)           (2,031)
                                                                  ---------          --------
NET CASH PROVIDED BY (USED IN)
      FINANCING ACTIVITIES                                            9,114            (9,041)
                                                                  ---------          --------
NET INCREASE (DECREASE) IN CASH
      AND CASH EQUIVALENTS                                              736           (29,402)

CASH AND CASH EQUIVALENTS,
      beginning of period                                             1,380            39,441
                                                                  ---------          --------

CASH AND CASH EQUIVALENTS,
      end of period                                                $  2,116          $ 10,039
                                                                  =========          ========

</TABLE>


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



                                       6


<PAGE>



                     REX STORES CORPORATION AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                  July 31, 2003

Note 1.  Consolidated Condensed Financial Statements

         The consolidated condensed financial statements included in this report
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission and include, in the
opinion of management, all adjustments necessary to state fairly the
information set forth therein. Any such adjustments were of a normal recurring
nature. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested that
these unaudited consolidated condensed financial statements be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K for the year ended
January 31, 2003 (fiscal 2002). The results of operations for the interim
periods are not necessarily indicative of the results to be expected for
the year.

Note 2.  Accounting Policies

         The interim consolidated condensed financial statements have been
prepared in accordance with the accounting policies described in the notes to
the consolidated financial statements included in the Company's 2002 Annual
Report on Form 10-K. While management believes that the procedures followed in
the preparation of interim financial information are reasonable, the accuracy of
some estimated amounts is dependent upon facts that will exist or calculations
that will be accomplished at fiscal year end. Examples of such estimates include
changes in the LIFO reserve (based upon the Company's best estimate of inflation
to date), management bonuses and the provision for income taxes. Any adjustments
pursuant to such estimates during the quarter were of a normal recurring nature.
The provision for income taxes could vary based upon full year synthetic fuel
production levels, federal income tax law changes and Internal Revenue Service
audits.

         Warehousing and distribution cost are included in cost of goods sold.

         Interest expense of $2,497,000 for the six months ended July 31, 2003
is net of approximately $37,000 of interest capitalized. Total interest expense
approximated interest paid for the first half of fiscal 2003. Interest expense
of $2,850,000 for the six months ended July 31, 2002 includes approximately
$248,000 for loan fee write-offs related to



                                       7


<PAGE>


early termination of mortgage loans resulting in actual interest paid of
approximately $2,602,000.

         The Company paid income taxes of approximately $1,522,000 and
$1,751,000 for the six months ended July 31, 2003 and 2002, respectively.

Note 3.  Recently Issued Accounting Standards

         In April 2003, the Financial Accounting Standards Board (FASB) issued
Statement No. 149, "Amendments of Statement 133 on Derivative Instruments and
Hedging Activities" which amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities under Statement 133,
"Accounting for Derivative Instruments and Hedging Activities." This Statement
is effective for contracts and hedging relationships entered into or modified
after June 30, 2003, and should be applied prospectively. The Company has
adopted the Statement, as required, but does not expect the adoption to have a
material impact on its financial statements.

         In May 2003, the FASB issued Statement No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity" which
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of these instruments
were previously classified as equity. This Statement is effective for all
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the first interim period beginning after June 15, 2003. The
Company will adopt the Statement, as required, but does not expect the adoption
to have a material impact on its financial statements.

Note 4.  Stock Option Plans

         The Company has stock-based compensation plans under which stock
options are granted to officers and key employees at the market price on the
date of the grant.

         The following summarizes options granted, exercised and canceled or
expired during the six months ended July 31, 2003:
<TABLE>

<S>                                                                                    <C>
Outstanding at January 31, 2003 ($3.61 to $16.04 per share).........................    6,735,594
Issued ($12.04 per share)...........................................................       33,220
Exercised ($4.61 to $10.14 per share)...............................................     (106,275)
Canceled or expired ($5.11 to $14.745 per share)....................................      (17,600)
                                                                                        ---------
Outstanding at July 31, 2003 ($3.61 to $16.04 per share)............................    6,644,939
                                                                                        =========
</TABLE>



                                       8


<PAGE>


         Pursuant to SFAS No. 123, "Accounting for Stock-Based Compensation,"
the Company has elected to account for its employee stock option plans under APB
Opinion No. 25, "Accounting for Stock Issued to Employees," which recognizes
expense based on the intrinsic value at date of grant. As stock options have
been issued with exercise prices equal to grant date fair value, no compensation
cost has resulted. Had compensation cost for all options granted been determined
based on the fair value at grant date consistent with SFAS No. 123, the
Company's net earnings and earnings per share would have been as follows:

<TABLE>
<CAPTION>

                                                                 Three Months Ended                 Six Months Ended
                                                                     July 31                            July 31
                                                                 ------------------                 ----------------
                                                                2003              2002             2003             2002
                                                               ------            ------           ------           ------
<S>                                  <C>                       <C>               <C>              <C>             <C>
Net Income                                 As Reported         $3,167            $5,391           $6,305          $9,575
                                     Compensation Cost            682               949            1,416           1,820
                                             Pro forma          2,484             4,442            4,889           7,755

Basic net income per share                 As Reported         $ 0.30            $ 0.43           $ 0.58          $ 0.77
                                     Compensation Cost            .06               .08              .13             .14
                                             Pro forma           0.24              0.35             0.45            0.63


Diluted net income per share               As Reported         $ 0.25            $ 0.37           $ 0.50          $ 0.65
                                     Compensation Cost            .05               .07              .11             .12
                                             Pro forma           0.20              0.30             0.39            0.53
</TABLE>

The assumptions used to calculate the fair value of options granted are
evaluated and revised, as necessary, to reflect market conditions and
experience.



                                       9


<PAGE>




Note 5.  Net Income Per Share

         The following table reconciles the basic and diluted net income per
share computation for each period presented:

<TABLE>
<CAPTION>

                                                   Three Months Ended                      Six Months Ended
                                                      July 31, 2003                         July 31, 2003
                                              -------------------------------      ---------------------------------
                                                                         Per                                   Per
                                              Income       Shares       Share      Income       Shares        Share
                                              ------       ------       -----      ------       -------       -----
<S>                                           <C>          <C>          <C>         <C>          <C>          <C>
Basic net income per share                    $3,167       10,705       $0.30       $6,305       10,821       $0.58
                                                                        =====                                 =====
Effect of stock options                                     1,921                                 1,746
                                              ------       ------                   ------       ------
Diluted net income per share                  $3,167       12,626       $0.25       $6,305       12,567       $0.50
                                              ======       ======       =====       ======       ======       =====
</TABLE>

<TABLE>
<CAPTION>

                                                   Three Months Ended                      Six Months Ended
                                                       July 31, 2002                         July 31, 2002
                                             --------------------------------      --------------------------------
                                                                         Per                                   Per
                                              Income       Shares       Share      Income       Shares        Share
                                              ------       ------       -----      ------       -------       -----
<S>                                           <C>          <C>          <C>         <C>          <C>          <C>
Basic net income per share                    $5,391       12,522       $0.43       $9,575       12,411       $0.77
                                                                        =====                                 =====
Effect of stock options                                     2,206                                 2,344
                                              ------       ------                   ------       ------
Diluted net income per share                  $5,391       14,728       $0.37       $9,575       14,755       $0.65
                                              ======       ======       =====       ======       ======       =====
</TABLE>

         For the three months ended July 31, 2003 and 2002, a total of 341,936
shares and 349,936 shares, respectively, and for the six months ended July 31,
2003 and 2002, a total of 375,156 and 24,936 shares, respectively, subject to
outstanding options were not included in the common equivalent shares
outstanding calculation as the exercise prices were above the average trading
price of the Company's common stock for that period.




                                       10


<PAGE>


         On February 11, 2002, the Company effected a 3-for-2 stock split. The
year-to-date per share data shown above has been retroactively restated to
reflect this split.

Note 6.  Synthetic Fuel

         Net income for the second quarter and first half of fiscal 2003
reflects approximately $3.1 million and $6.2 million, respectively, of pre-tax
investment income from the sales of the Company's entire Partnership interest
in Colona SynFuel Limited Partnership, L.L.L.P., a synthetic fuel limited
partnership. The Internal Revenue Service is presently auditing this limited
partnership. Approximately $1.9 million and $3.7 million of the payments due the
Company and reported as income during the fiscal 2003 second quarter and first
half, respectively, relating to sales of certain portions of the limited
partnership interest is being held in escrow pending the results of the IRS
audit. Subsequent payments relating to certain of these sales will also be held
in escrow pending the results of the IRS audit. The amount to be held in escrow
is approximately $10 million at July 31, 2003. Based on recent developments and
IRS announcements the Company has classified the escrowed money as a long-term
asset at July 31, 2003. The timing of the completion of the audit has not been
determined.

         On September 5, 2002, the Company closed on its purchase of a plant
located in Gillette, Wyoming designed and constructed for the production of
synthetic fuel, which qualifies for tax credits under Section 29 of the Internal
Revenue Code. The Company has obtained a Private Letter Ruling from the IRS
which would allow the disassembly, and reconstruction, of the facility at a yet
to be determined host site. The previously disclosed letter of intent as to the
potential relocation and commercialization of the plant has been terminated.
The Company remains obligated to disassemble the plant and remove it from its
existing site at a currently estimated total cost of $2.4 million, including
related expenses. Through July 31, 2003, approximately $1.4 million has been
spent on this project, with an additional $0.9 million being held in escrow to
guarantee the Company's future performance. The total of $2.4 million is
classified as a long-term asset on the balance sheet. While this acquisition
may result in the future production of synthetic fuel, there can be no
assurances that this facility will ever be placed into commercial operation,
and if not placed into commercial operation this asset could be deemed impaired.

         The Internal Revenue Service (IRS) has recently issued Announcement
2003-46, stating it has reason to question the scientific validity of testing
procedures and results related to Section 29 income tax credits. The notice also
announced that it would suspend the issuance of new rulings until its review is
complete and that rulings could be revoked if the IRS did not determine that the
test procedures demonstrate a significant chemical change between the feedstock
coal and the synthetic fuel.

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

         We are a specialty retailer in the consumer electronics/appliance
industry. As of July 31, 2003 we operated 249 stores in 37 states, predominantly
in small to medium-sized markets under the trade name "REX".




                                       11


<PAGE>


Fiscal Year

         All references in this report to a particular fiscal year are to REX's
fiscal year ended January 31. For example, "fiscal 2003" means the period
February 1, 2003 to January 31, 2004.

Results of Operations

         The following table sets forth, for the periods indicated, the relative
percentages that certain income and expense items bear to net sales:

<TABLE>
<CAPTION>

                                                             Three Months Ended               Six Months Ended
                                                                  July 31                         July, 31
                                                              ------------------               ----------------
                                                            2003              2002            2003         2002
                                                            ----              ----            ----         ----
<S>                                                        <C>               <C>             <C>          <C>
Net sales.............................................     100.0%            100.0%          100.0%       100.0%
Cost of merchandise sold..............................      69.0              68.5            69.9         69.7
                                                          ------            ------          ------       ------
     Gross profit.....................................      31.0              31.5            30.1         30.3
Selling, general and administrative expenses..........      28.4              27.9            27.8         27.3
                                                          ------            ------          ------       ------
     Income from operations...........................       2.6               3.6             2.3          3.0
Investment income.....................................         -               0.1               -          0.1
Interest expense......................................      (1.4)             (1.4)           (1.3)        (1.5)
Gain on sale of real estate...........................         -                 -             0.2            -
Income from limited partnerships......................       3.4               5.4             3.3          5.2
                                                          ------            ------          ------       ------
     Income before provision for income taxes.........       4.6               7.7             4.5          6.8
Provision for income taxes............................       1.1               1.9             1.1          1.7
                                                          ------            ------          ------       ------
Net income............................................       3.5%              5.8%            3.4%         5.1%
                                                          ======            ======          ======       ======
</TABLE>

Comparison of Three and Six Months Ended July 31, 2003 and 2002.

         Net sales in the second quarter ended July 31, 2003 were $91.4 million
compared to $93.1 million in the prior year's second quarter, representing a
decrease of $1.6 million or 1.8%. This decrease was primarily due to a net
reduction of six stores since the end of the second quarter of fiscal 2002 and a
decline in comparable store sales of 0.4%. We consider a store to be comparable
after it has been open six full fiscal quarters. Comparable store sales
comparisons do not include sales of extended service contracts.



                                       12


<PAGE>



         The strongest product category for the Company for the second quarter
of fiscal 2003 was televisions which positively impacted comparable store sales
by 7.4%. This increase was primarily caused by strong demand for high definition
ready large screen televisions. All other major product categories negatively
impacted comparable store sales with the appliance category impact being 4.1%,
the video category being 1.6%, the other category being 1.2% and the audio
category being 0.9%. The appliance category would have positively impacted
comparable store sales with the exception of air conditioner sales which
negatively impacted comparable store sales by 4.9%. Air conditioner sales were
impacted by lower demand primarily due to cooler temperatures in certain markets
as compared to the prior year and a lower average selling price.

         Net sales for the first half of fiscal 2003 were $186.8 million
compared to $186.6 million for the first half of fiscal 2002, representing an
increase of $0.2 million or 0.1%. Comparable store sales increased 2.2% for
the first half of fiscal 2003. There was a net decrease of six stores since
the end of the first half of fiscal 2002.

         The only major product category which positively impacted comparable
store sales for the first half of fiscal 2003 was the television category which
increased comparable store sales by 8.4%. This increase was primarily caused by
strong demand for high definition ready large screen televisions. All other
major product categories negatively impacted comparable store sales, with the
appliance category impact being 2.5%, the audio category 1.4%, the other
category 1.2% and the video category 1.1%.

         The following table reflects the approximate percent of net sales for
each major product group for the periods presented.

<TABLE>
<CAPTION>

                                                 Three Months Ended                Six Months Ended
                                                      July 31                           July 31
                                                 ------------------                ----------------
Product Category                                 2003              2002           2003            2002
----------------                                 -----             -----          ----            ----
<S>                                              <C>               <C>            <C>             <C>
Televisions.............................         46.4%             39.2%          49.2%           42.1%
Appliances..............................         26.7              30.6           22.2            25.1
Audio...................................         12.3              13.0           13.7            15.3
Video...................................          6.8               8.2            6.8             8.0
Other...................................          7.8               9.0            8.1             9.5
                                               ------            ------         ------          ------
                                                100.0%            100.0%         100.0%          100.0%
                                               ======            ======         ======          ======
</TABLE>



                                       13


<PAGE>


         As of July 31, 2003, we had 249 stores compared to 255 stores one year
earlier. We did not open any stores and closed three stores in the first half of
fiscal 2003. We did not open any stores and closed seven during the first half
of fiscal 2002.

         Gross profit of $28.3 million (31.0% of net sales) in the second
quarter of fiscal 2003 was approximately $1.0 million lower than the $29.3
million (31.5% of net sales) recorded in the second quarter of fiscal 2002.
Gross profit for the first half of fiscal 2003 was $56.2 million (30.1% of net
sales) compared to $56.6 million (30.3% of net sales) for the first half of
fiscal 2002. Gross profit margin for the second quarter of fiscal 2003 was
negatively impacted in comparison to the second quarter of fiscal 2002 from
lower air conditioner sales, which generally have higher gross profit margins,
in the current year. The prior year gross profit margin on air conditioner sales
was also higher due to opportunistic buying opportunities in the previous
year.

         Selling, general and administrative expenses were $26.0 million for
both the second quarter of fiscal 2003 (28.4% of net sales) and fiscal 2002
(27.9% of net sales). Selling, general and administrative expenses were $51.9
million (27.8% of net sales) for the first half of fiscal 2003, a 1.7% increase
from $51.0 million (27.3% of net sales) for the first half of fiscal 2002. The
increase in selling, general and administrative expense as a percentage of sales
is primarily a result of increased expenditures for television advertising and
increased commissioning cost to the sales staff partially offset by lower
administrative cost.

         Interest expense was $1.3 million for both the second quarter of fiscal
2003 (1.4% of net sales) and fiscal 2002 (1.4% of net sales). Interest expense
was $2.5 million (1.3% of net sales) for the first half of fiscal 2003 versus
$2.8 million (1.5% of net sales) for the first half of fiscal 2002. The prior
year first half interest expense includes a charge of approximately $250,000 for
early extinguishment of mortgage loans of $7.0 million. For the current year we
have had higher borrowing costs on the line of credit due to higher outstanding
borrowings. This has been offset by lower interest cost from mortgage debt due
to lower outstanding borrowings and on average lower interest rates on the
variable rate mortgage loans.

         During the first quarter of fiscal 2003, we sold one property for a
gain of approximately $386,000. We had previously closed this store and leased
it to an unrelated party.

         Results for the second quarter and first half of fiscals 2003 and 2002
also reflect the impact of our equity investment in two limited partnerships,
Colona SynFuel Limited Partnership, L.L.L.P., and Somerset SynFuel, L.P., which
produce synthetic fuels. We remain a limited partner in the Somerset limited
partnership but have sold our ownership interest in the Colona limited
partnership through a series of three sales. Effective February 1, 1999, we
entered into an agreement to




                                       14


<PAGE>


sell a portion of our investment in the Colona limited partnership, which
resulted in the reduction in our ownership interest from 30% to 17%. Effective
July 31, 2000, we sold an additional portion of our ownership interest in that
partnership, reducing our ownership percentage from 17% to 8%. Effective May 31,
2001, we sold our remaining 8% ownership interest. We expect to receive payments
from the sales on a quarterly basis through 2007, which will range from 74.25%
to 82.5% of the federal income tax credits attributable to the interest sold.
This partnership is currently being audited by the Internal Revenue Service.
Proceeds related to the July 31, 2000 and May 31, 2001 sales are now being put
into escrow pending the results of the audit. The amount to be held in escrow is
approximately $10 million at July 31, 2003. All proceeds have been reported as
income whether received or put into escrow. Below is a table summarizing the
income from the sales, net of certain expenses. The lower income for the current
year generally reflects lower production levels compared to the previous year.

<TABLE>
<CAPTION>

                                                Three Months Ended                Six Months Ended
                                                      July 31                          July 31
                                              ------------------------         ----------------------
                                              2003               2002           2003            2002
                                                                   (In Thousands)
<S>                                           <C>               <C>            <C>             <C>
February 1, 1999 sale.................        $1,244            $1,850         $2,466          $3,699
July 31, 2000 sale....................           993             1,350          1,951           2,700
May 31, 2001 sale.....................           882             1,436          1,766           2,873
                                             -------           -------        -------         -------
                                              $3,119            $4,636         $6,183          $9,272
                                             =======           =======        =======         =======
</TABLE>

         Our effective tax rate was 25.0% for the second quarter of fiscals 2003
and 2002 and 25.0% and 24.2% for the first half of fiscals 2003 and 2002,
respectively, after reflecting our share of federal income tax credits earned by
the Somerset limited partnership under Section 29 of the Internal Revenue Code.

         The Internal Revenue Service (IRS) has recently issued Announcement
2003-46, stating it has reason to question the scientific validity of testing
procedures and results related to Section 29 income tax credits. The notice also
announced that it would suspend the issuance of new rulings until its review is
complete and that rulings could be revoked if the IRS did not determine that the
test procedures demonstrate a significant chemical change between the feedstock
coal and the synthetic fuel.

         As a result of the foregoing, net income for the second quarter of
fiscal 2003 was $3.2 million, a 41.3% decrease from $5.4 million for the second
quarter of fiscal 2002. Net income for the first half of fiscal 2003 was $6.3
million, a 34.1% decrease from $9.6 million for the first half of fiscal 2002.



                                       15


<PAGE>


Liquidity and Capital Resources

         Net cash used in operating activities was approximately $9.8 million
for the first six months of fiscal 2003, compared to $28.0 million for the first
six months of fiscal 2002. For the first half of fiscal 2003, cash was provided
by net income of $6.3 million, adjusted for the impact of $6.2 million for gains
on our installment sales of the limited partnership interest, non-cash items of
$1.3 million which consisted of deferred income and depreciation and
amortization and $0.3 million gain on disposal of fixed assets. The primary use
of cash was an increase in inventory of $27.0 million due to opportunistic
purchases and seasonal fluctuations. The other uses of cash were a decrease in
other liabilities of $2.1 million and an increase in other assets of $1.3
million. Cash was provided by an increase in accounts payable of $18.0 million
due to the increase in inventory and the timing of purchases and payments to
vendors. Cash was also provided by an increase in accounts receivable of $1.6
million.

         At July 31, 2003, working capital was $79.6 million compared to $93.3
million at January 31, 2003. The ratio of current assets to current liabilities
was 1.7 to 1 at July 31, 2003 and 2.3 to 1 at January 31, 2003.

         We received proceeds of approximately $2.4 million for installment
sales of a portion of our ownership interest in a limited partnership and $0.8
million from the sale of a previously closed store location during the first
half of fiscal 2003. We had capital expenditures of approximately $1.8 million
during the first half of fiscal 2003, primarily for the addition currently in
process to the warehouse in Dayton, Ohio.

         Cash provided by financing activities totaled approximately $9.1
million for the first half of fiscal 2003. Cash was provided by increased
borrowings of approximately $17.3 million on the line of credit. We received
proceeds of approximately $650,000 from the exercise of stock options by
employees and directors. The exercise of non-qualified stock options resulted in
a tax benefit of approximately $300,000 for the first half of fiscal 2003 which
was reflected as an increase in additional paid-in capital. Cash of $3.1 million
was used for scheduled payments of mortgage debt. Cash of approximately $6.1
million was also used to acquire 560,000 shares of our common stock. We
currently have approximately 170,500 authorized shares remaining under the stock
buy-back program.

Recently Issued Accounting Standards

         In April 2003, the Financial Accounting Standards Board (FASB) issued
Statement No. 149 "Amendments of Statement 133 on Derivative Instruments and
Hedging Activities" which amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities under Statement 133,
"Accounting for Derivative Instruments



                                       16


<PAGE>



and Hedging Activities." This Statement is effective for contracts and hedging
relationships entered into or modified after June 30, 2003, and should be
applied prospectively. The Company will adopt the Statement, as required, but
does not expect the adoption to have a material impact on its financial
statements.

         In May 2003, the FASB issued Statement No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity" which
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of these instruments
were previously classified as equity. This Statement is effective for all
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the first interim period beginning after June 15, 2003. The
Company will adopt the Statement, as required, but does not expect the adoption
to have a material impact on its financial statements.

Forward-Looking Statements

         This Form 10-Q contains or may contain forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. The words
"believes", "estimates", "plans", "expects", "intends", "anticipates" and
similar expressions as they relate to the Company or its management are intended
to identify such forward-looking statements. Forward-looking statements are
inherently subject to risks and uncertainties. Factors that could cause actual
results to differ materially from those in the forward-looking statements are
set forth in Exhibit 99(a) to the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 2003 (File No. 0-13283).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

         No material changes since January 31, 2003.

Item 4. Controls and Procedures

         The Company's management evaluated, with the participation of the
Company's Chief Executive Officer and Chief Financial Officer, the effectiveness
of the Company's disclosure controls and procedures, as of the end of the period
covered by this report. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms.


                                       17


<PAGE>



        There were no changes in the Company's internal control over financial
reporting that occurred during the Company's last fiscal quarter that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

Item 6. Exhibits and Reports on Form 8-K.

    (a) Exhibits. The following exhibits are filed with this report:

<TABLE>

        <S>      <C>
        31       Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

        32       Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>

    (b) Reports on Form 8-K.

        On June 9, 2003, the Company filed a Form 8-K reporting under Item 12
the issuance of a press release announcing financial results for the quarter
ended April 30, 2003 and transcript of the related conference call with analysts
and other interested parties.



                                       18


<PAGE>



                                   SIGNATURES


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



                                        REX STORES CORPORATION
                                        Registrant



September 15, 2003                      STUART A. ROSE
                                        Stuart A. Rose
                                        Chairman of the Board
                                        (Chief Executive Officer)



September 15, 2003                      DOUGLAS L. BRUGGEMAN
                                        Douglas L. Bruggeman
                                        Vice President, Finance and Treasurer
                                        (Chief Financial Officer)





                                       19