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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For quarterly period ended August 4, 2001

[ ] 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: 0-02788

THE ELDER-BEERMAN STORES CORP.
(Exact name of registrant as specified in its charter)

<Table>

OHIO 31-0271980
(State or other jurisdiction (I.R.S. employer
of incorporation or identification no.)
organization)
3155 EL-BEE ROAD, DAYTON, OHIO 45439
(Address of principal (Zip Code)
executive offices)
</Table>

(937) 296-2700
(Registrant's telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
---------------

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of the issuer's classes of common
stock, as of the latest practicable date.

As of September 10, 2001, 11,416,515 shares of the issuer's common stock,
without par value, were outstanding.

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2

THE ELDER-BEERMAN STORES CORP.

INDEX

<Table>
<Caption>
PAGE
----

PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of August 4, 2001
(Unaudited) and as of February 3, 2001...................... 1
Condensed Consolidated Statements of Operations for the 13
weeks ended August 4, 2001 and July 29, 2000 (Unaudited).... 2
Condensed Consolidated Statements of Operations for the 26
weeks ended August 4, 2001 and July 29, 2000 (Unaudited).... 3
Condensed Consolidated Statements of Cash Flows for the 26
weeks ended August 4, 2001 and July 29, 2000 (Unaudited).... 4
Notes to Condensed Consolidated Financial Statements
(Unaudited)................................................. 5
ITEM 2. Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations............... 8
ITEM 3. Quantitative and Qualitative Disclosures About Market
Risk........................................................ 10
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings........................................... 11
ITEM 2. Changes in Securities and Use of Proceeds................... 11
ITEM 3. Defaults Upon Senior Securities............................. 11
ITEM 4. Submission of Matters to a Vote of Security Holders......... 11
ITEM 5. Other Information........................................... 11
ITEM 6. Exhibits and Reports on Form 8-K............................ 11
SIGNATURES............................................................. 13
EXHIBIT INDEX.......................................................... 14
</Table>
3

PART I. -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<Table>
<Caption>
(UNAUDITED)
AUG. 4, 2001 FEB. 3, 2001
------------ ------------

ASSETS
Current assets:
Cash and equivalents...................................... $ 6,213 $ 7,878
Customer accounts receivable (less allowance for doubtful
accounts: August 4, 2001 -- $1,436; February 3,
2001 -- $2,478)........................................ 122,321 135,794
Merchandise inventories................................... 172,303 154,153
Other current assets...................................... 24,900 23,170
-------- --------
Total current assets.............................. 325,737 320,995
Property, fixtures and equipment, less accumulated
depreciation and amortization............................. 92,540 86,450
Other Assets................................................ 51,337 47,872
-------- --------
Total assets...................................... $469,614 $455,317
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations.................. $ 3,880 $ 1,509
Accounts payable.......................................... 54,673 33,236
Other accrued liabilities................................. 21,085 25,086
-------- --------
Total current liabilities......................... 79,638 59,831
Long-term obligations, less current portion................. 162,259 165,632
Deferred items.............................................. 12,227 7,873
Shareholders' equity:
Common stock, no par, 11,416,515 shares on August 4, 2001
and 11,451,953 shares on February 3, 2001 issued and
outstanding............................................ 241,882 242,049
Unearned compensation -- restricted stock, net............ (271) (455)
Deficit................................................... (22,733) (18,950)
Other comprehensive loss.................................. (3,388) (663)
-------- --------
Total shareholders' equity........................ 215,490 221,981
-------- --------
Total liabilities and shareholders' equity........ $469,614 $455,317
======== ========
</Table>

See notes to condensed consolidated financial statements

1
4

THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

<Table>
<Caption>
13-WEEKS ENDED 13-WEEKS ENDED
AUG. 4, 2001 JULY 29, 2000
-------------- --------------

Revenues:
Net sales................................................. $ 130,468 $ 131,358
Financing................................................. 6,605 6,696
Other..................................................... 679 676
----------- -----------
Total revenues.................................... 137,752 138,730
----------- -----------
Costs and expenses:
Cost of merchandise sold, occupancy, and buying
expenses............................................... 94,333 92,468
Selling, general, administrative, and other expenses...... 40,825 45,935
Depreciation and amortization............................. 4,692 3,675
Interest expense.......................................... 3,482 2,859
----------- -----------
Total costs and expenses.......................... 143,332 144,937
----------- -----------
Loss before income tax benefit.............................. (5,580) (6,207)
Income tax benefit.......................................... (2,009) (2,234)
----------- -----------
Net loss.................................................... $ (3,571) $ (3,973)
=========== ===========
Loss per common share -- basic and diluted.................. $ (0.32) $ (0.27)
Weighted average number of shares outstanding............... 11,314,970 14,657,223
</Table>

See notes to condensed consolidated financial statements

2
5

THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

<Table>
<Caption>
26-WEEKS ENDED 26-WEEKS ENDED
AUG. 4, 2001 JULY 29, 2000
-------------- --------------

Revenues:
Net sales................................................. $ 269,962 $ 272,940
Financing................................................. 13,754 13,466
Other..................................................... 1,383 1,429
----------- -----------
Total revenues.................................... 285,099 287,835
----------- -----------
Costs and expenses:
Cost of merchandise sold, occupancy, and buying
expenses............................................... 193,438 193,926
Selling, general, administrative, and other expenses...... 81,368 92,017
Depreciation and amortization............................. 9,385 7,380
Interest expense.......................................... 6,819 5,518
----------- -----------
Total costs and expenses.......................... 291,010 298,841
----------- -----------
Loss before income tax benefit.............................. (5,911) (11,006)
Income tax benefit.......................................... (2,128) (3,962)
----------- -----------
Net loss.................................................... $ (3,783) $ (7,044)
=========== ===========
Loss per common share -- basic and diluted.................. $ (0.33) $ (0.48)
Weighted average number of shares outstanding............... 11,314,911 14,655,579
</Table>

See notes to condensed consolidated financial statements

3
6

THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

<Table>
<Caption>
26-WEEKS ENDED 26-WEEKS ENDED
AUG. 4, 2001 JULY 29, 2000
-------------- --------------

Cash flows from operating activities:
Net loss.................................................. $ (3,783) $ (7,044)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization.......................... 9,385 7,380
Asset impairment....................................... -- 504
Changes in assets and liabilities...................... 8,388 (3,496)
-------- --------
Net cash provided by (used in) operating
activities...................................... 13,990 (2,656)
Cash flows from investing activities:
Capital expenditures, net................................. (8,146) (6,486)
-------- --------
Net cash used in investing activities............. (8,146) (6,486)
Cash flows from financing activities:
Net payments under asset securitization agreement......... (11,680) (31,062)
Net borrowings under revolving lines of credit............ 5,702 42,232
Payments on long-term obligations......................... (1,469) (695)
Other..................................................... (62) (2,017)
-------- --------
Net cash provided by (used in) financing
activities...................................... (7,509) 8,458
-------- --------
Decrease in cash and equivalents............................ (1,665) (684)
Cash and equivalents -- beginning of period................. 7,878 8,276
-------- --------
Cash and equivalents -- end of period....................... $ 6,213 $ 7,592
======== ========
Supplemental cash flow information:
Interest paid............................................. $ 6,053 $ 5,143
Supplemental non-cash investing and financing activities:
Capital leases............................................ 6,446 --
</Table>

See notes to condensed consolidated financial statements.

4
7

THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements
include accounts of The Elder-Beerman Stores Corp. and its wholly-owned
subsidiaries (the "Company"). All intercompany transactions and balances have
been eliminated in consolidation. In the opinion of management, the Company
has made all adjustments (primarily consisting of normal recurring accruals)
considered necessary for a fair presentation for all periods presented.

Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. The Company's business is seasonal in nature and the results of
operations for the interim periods are not necessarily indicative of the
results for the full fiscal year. It is suggested these condensed
consolidated financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual Report on
Form 10-K for the year ended February 3, 2001.

2. PER SHARE AMOUNTS

Net earnings (loss) per common share is computed by dividing net earnings
(loss) by the weighted-average number of common shares outstanding. Stock
options, restricted shares, deferred shares, and warrants outstanding
represent potential common shares and are included in computing diluted
earnings per share when the effect would be dilutive.

3. STOCK-BASED COMPENSATION

During the second quarter of 2001, a total of 16,500 stock options were
granted at fair market value to designated employees under the Company's
Equity and Performance Incentive Plan (the "Plan"). These options granted
have a maximum term of ten years and vest over five years.

Nonemployee directors may take all or a portion of their annual base retainer
fee in the form of a discounted stock option. During the second quarter of
2001 a total of 25,640 stock options, with an exercise price of $2.32, were
granted under this plan. These options vest on February 4, 2002.

4. SHAREHOLDERS' EQUITY

The comprehensive loss for the 13 weeks ended August 4, 2001 and July 29,
2000, was $3.8 million and $4.0 million; respectively. The comprehensive loss
for the 26 weeks ended August 4, 2001 and July 29, 2000, was $6.5 million and
$7.0 million; respectively. The difference between net loss and comprehensive
loss for the 13 weeks and the 26 weeks ended August 4, 2001 relates to the
adoption of Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities".

5. DERIVATIVE FINANCIAL INSTRUMENTS

Effective February 4, 2001, the Company adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", as amended, which requires
derivatives to be recorded on the balance sheet as assets or liabilities,
measured at fair value. Gains or losses resulting from changes in fair value
of the derivatives are recorded either as a separate component of
shareholders' equity or in the statement of operations depending on whether
the instruments meet the criteria for hedge accounting.

The Company utilizes an interest rate swap agreement to effectively establish
long-term fixed rates on borrowings under the Securitization Facility, thus
reducing the impact of interest rate changes on future income. This swap
agreement involves the receipt of variable rate amounts in exchange for fixed
rate interest payments over the life of the agreement. The Company has
determined that its swap agreement meets the
5
8
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(UNAUDITED)

criteria for cash flow hedge accounting. The fair value of the Company's swap
agreement was a $2.9 million liability at February 4, 2001, and a $4.3
million liability at August 4, 2001. This liability is included in Deferred
items on the condensed consolidated balance sheet. The adjustment to record
the initial adoption of SFAS No. 133 was recorded, net of income taxes, in
other comprehensive loss. The adjustment to record the net change in fair
value was recorded, net of income taxes, in other comprehensive loss, except
for an immaterial amount recorded as pre-tax interest expense associated with
the ineffectiveness of the swap during the second quarter of 2001.

6. ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141 "Business Combinations" ("SFAS 141")
and No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141
primarily requires that all business combinations completed after June 30,
2001 be accounted for using the purchase method and establishes criteria for
recognizing acquired intangible assets separately from goodwill. The Company
will account for future business combinations under SFAS 141.

SFAS 142 requires that goodwill and intangible assets with indefinite lives
no longer be amortized, but will be subject to annual impairment tests.
Intangible assets with finite useful lives will continue to be amortized over
their useful lives. SFAS 142 is effective for fiscal years beginning after
December 15, 2001. Effective February 3, 2002, the beginning of the new
fiscal year, this statement will be adopted. The amortization of goodwill
will continue until this statement is adopted. The elimination of goodwill
amortization is expected to increase pre-tax earnings by approximately $0.7
million each year. When this statement is adopted the required impairment
tests will be performed. The Company has not estimated the impact these
impairment tests will have on its financial position or results of
operations.

7. SUBSEQUENT EVENT

On August 21, 2001 the Company announced that Frederick J. Mershad will
retire as Chairman, President, and Chief Executive Officer of the Company and
resign from the Board of Directors, effective December 31, 2001 (the
"Retirement Date"). On September 4, 2001 the Company entered into a
Separation and Retirement Agreement (the "Separation Agreement") with Mr.
Mershad. The Separation Agreement superceded Mr. Mershad's Employment
Agreement. Pursuant to the terms of the Separation Agreement, until the
Retirement Date, Mr. Mershad will be entitled to his current base salary and
benefits that would have been payable pursuant to the terms of his Employment
Agreement. After the Retirement Date, the Company will pay to Mr. Mershad (i)
his current base salary of $660,000 per year for the period beginning with
the Retirement Date and ending on December 31, 2004 (the "Retirement Period")
and (ii) his bonus (if any) earned in 2001. This will be accrued into the
third quarter of 2001. During the Retirement Period, Mr. Mershad will also be
entitled to medical benefits equivalent to those provided to him prior to the
Retirement Date and the automobile benefit that he received prior to the
Retirement Date. Mr. Mershad's options to purchase shares of Common Stock and
restricted shares that are unvested as of the Retirement Date will be
forfeited.

6
9
THE ELDER-BEERMAN STORES CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(UNAUDITED)

8. SEGMENT REPORTING

The following table sets forth financial information by segment, $(000's):

<Table>
<Caption>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
------------------------------- -------------------------------
AUGUST 4, 2001 JULY 29, 2000 AUGUST 4, 2001 JULY 29, 2000
-------------- ------------- -------------- -------------

Department Store
Revenues.......................... $131,147 $132,034 $271,345 $274,369
Operating loss.................... (8,079) (6,301) (11,222) (9,879)
Finance Operations
Revenues.......................... $ 8,580 $ 8,575 $ 17,741 $ 17,332
Operating profit.................. 5,480 5,054 11,581 11,128
Segment Subtotal
Revenues (1)...................... $139,727 $140,609 $289,086 $291,701
Operating profit (loss) (2)....... (2,599) (1,247) 359 1,249
</Table>

(1) Segment revenues is reconciled to reported revenues as follows:

Segment revenues.................... $139,727 $140,609 $289,086 $291,701
Intersegment operating charge
Eliminated........................ (1,975) (1,879) (3,987) (3,866)
-------- -------- -------- --------
$137,752 $138,730 $285,099 $287,835
======== ======== ======== ========
</Table>

(2) Segment operating profit (loss) is reconciled to loss before income tax
benefit as follows:

Segment operating profit (loss)..... $(2,599) $(1,247) $ 359 $ 1,249
Store closing costs................. (4,720)
Restructuring costs................. (2,014) (2,014)
Interest expense.................... (3,482) (2,859) (6,819) (5,518)
Other............................... 501 (87) 549 (3)
------- ------- ------- --------
$(5,580) $(6,207) $(5,911) $(11,006)
======= ======= ======= ========
</Table>

7
10

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

This Quarterly Report on Form 10-Q contains certain forward-looking
statements that are based on management's current beliefs, estimates and
assumptions concerning the operations, future results and prospects of
Elder-Beerman and the retail industry in general. All statements that address
operating performance, events or developments that management anticipates will
occur in the future, including statements related to future sales, profits,
expenses, income and earnings per share, future finance and capital market
activity, or statements expressing general optimism about future results, are
forward-looking statements. In addition, words such as "expects," "anticipates,"
"intends," "plans," "believes," "estimates," variations of such words and
similar expressions are intended to identify forward-looking statements.

Because forward-looking statements are based on a number of beliefs,
estimates and assumptions by management that could ultimately prove inaccurate,
there is no assurance that forward-looking statements will prove to be accurate.
Many factors could materially affect our actual future operations and results.
These factors could be exacerbated by the uncertainties following the national
tragedies of September 11, 2001. Factors that could materially affect our actual
and future results include the following: the ability to open new stores on
schedule, including our new stores announced for 2001 in Kohler, WI and
Alliance, OH; increasing price and product competition; fluctuations in consumer
demand and confidence, especially during the Christmas shopping season and in
light of current events and general economic conditions, interest rates and the
capital markets; the availability and mix of inventory, especially from vendors
who rely on goods shipped from overseas; fluctuations in costs and expenses;
consumer response to the company's new merchandising strategies, advertising,
marketing and promotional programs; the ability of the company to achieve its
expense cutting initiatives as it implements its strategic plan; the timing and
effectiveness of new store openings, particularly its new concept stores opened
in the Fall season of 2000 and Spring and Fall seasons of 2001 (Howell, MI; West
Bend, WI; Jasper, IN; Plover, WI and DuBois, PA) and the remaining concept
stores to be opened in the Fall season of 2001; the impact of electronic
commerce; weather conditions that affect consumer traffic in stores, especially
during the Christmas season; the continued availability and terms of financing;
the outcome of pending and future litigation; consumer debt levels; the impact
of any new consumer bankruptcy laws; inflation and interest rates and the
condition of the capital markets.

Forward-looking statements are subject to the safe harbors created under
the federal securities laws. Elder-Beerman undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following is a discussion of the financial condition and results of
operations of the Company for the 13 week periods ended August 4, 2001 ("Second
Quarter 2001") and July 29, 2000 ("Second Quarter 2000"), and the 26 week
periods ended August 4, 2001 ("First Half 2001") and July 29, 2000 ("First Half
2000"). The Company's fiscal year ends on the Saturday closest to January 31.
The discussion and analysis which follow are based upon and should be read in
conjunction with the Condensed Consolidated Financial Statements and the Notes
thereto included in Part I, Item I.

RESULTS OF OPERATIONS

SECOND QUARTER 2001 COMPARED TO SECOND QUARTER 2000

Net sales for the Second Quarter 2001 decreased by 0.7% to $130.5 million
from $131.4 million for the Second Quarter 2000. Comparable store sales
decreased by 2.3%. Junior sportswear, children's ready-to-wear, domestics,
cosmetics and furniture had the best performance.

Financing revenue from the Company's private label credit card for the
Second Quarter 2001 decreased by 1.4% to $6.6 million from $6.7 million for the
Second Quarter 2000, reflecting a reduction in accounts receivable due to lower
sales.

8
11

Other revenue, which is primarily from leased departments, for the Second
Quarter 2001 and the Second Quarter 2000 was $0.7 million.

Cost of merchandise sold, occupancy, and buying expenses increased to 72.3%
of net sales for the Second Quarter 2001 from 70.4% of net sales for the Second
Quarter 2000. During the Second Quarter 2001 merchandise gross margins were
reduced 1.7% due to additional markdowns to clear excess inventory as a result
of the comparable sales decrease.

Selling, general, administrative, and other expenses decreased to 31.3% of
net sales for the Second Quarter 2001 from 35.0% for the Second Quarter 2000.
The decrease is primarily due to expense initiatives that have been implemented
as part of the Company's strategic plan. Also, the Second Quarter 2000 included
an expense of $2.0 million for the development and implementation of the
Company's strategic plan.

Depreciation and amortization expense increased to 3.6% of net sales for
the Second Quarter 2001 compared to 2.8% of net sales for the Second Quarter
2000. The increase is primarily due to increased capital expenditures related to
the opening of new concept stores, and replacing the point-of-sale cash
registers in all stores.

Interest expense increased to $3.5 million for the Second Quarter 2001 from
$2.9 million for the Second Quarter 2000. The increase is primarily due to
higher average borrowing because of the Company's stock repurchase program,
which was completed in October 2000.

An income tax benefit was recorded in the Second Quarter 2001 and the
Second Quarter 2000 at a rate of 36.0%.

FIRST HALF 2001 COMPARED TO FIRST HALF 2000

Net sales for the First Half 2001 decreased by 1.1% to $270.0 million from
$272.9 million for the First Half 2000. Comparable store sales decreased by
2.6%. Furniture, junior sportswear, children's ready-to-wear, domestics,
cosmetics and ladies' moderate sportswear had the best performance.

Financing revenue from the Company's private label credit card for the
First Half 2001 increased by 2.1% to $13.8 million from $13.5 million for the
First Half 2000, due to an increase in late fees charged.

Other revenue, which is primarily from leased departments, for the First
Half 2001 and the First Half 2000 was $1.4 million.

Cost of merchandise sold, occupancy, and buying expenses increased to 71.7%
of net sales for the First Half 2001 from 71.1% of net sales for the First Half
2000. During the First Half 2001 merchandise gross margins were reduced 1.1% due
to additional markdowns to clear excess inventory as a result of the comparable
sales decrease. During the First Half 2000 an inventory adjustment of $1.8
million (0.7% of sales) related to the closing of the Company's Wheeling and
Charleston, West Virginia stores was recorded.

Selling, general, administrative, and other expenses decreased to 30.1% of
net sales for the First Half 2001 from 33.7% for the First Half 2000. The
decrease is primarily due to expense initiatives that have been implemented as
part of the Company's strategic plan. Also, the First Half 2000 included an
expense of $2.0 million for the development and implementation of the Company's
strategic plan, and an expense of $2.9 million related to the closing of the
Company's Wheeling and Charleston, West Virginia stores.

Depreciation and amortization expense increased to 3.5% of net sales for
the First Half 2001 compared to 2.7% of net sales for the First Half 2000. The
increase is primarily due to increased capital expenditures related to the
opening of new concept stores, and replacing the point-of-sale cash registers in
all stores.

Interest expense increased to $6.8 million for the First Half 2001 from
$5.5 million for the First Half 2000. The increase is primarily due to higher
average borrowing because of the Company's stock repurchase program, which was
completed in October 2000.

An income tax benefit was recorded in the First Half 2001 and the First
Half 2000 at a rate of 36.0%.

9
12

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal sources of funds are cash flow from operations and
borrowings under the Revolving Credit Facility and Receivable Securitization
Facility (collectively, the "Credit Facilities"). The Company's primary ongoing
cash requirements are to fund debt service, make capital expenditures, and
finance working capital.

Net cash provided by operating activities was $14.0 million for the First
Half 2001, compared to $2.7 million used in the First Half 2000. A net loss of
$3.8 million was recorded in the First Half 2001, compared to a net loss of $7.0
million in the First Half 2000. The depreciation and amortization component of
the net losses increased $2.0 million to $9.4 million for the First Half 2001,
compared to $7.4 million for the First Half 2000. Trade payables increased $22.7
million in the First Half 2001 primarily due to a change in receipt flow in
July. The seasonal increase in inventory levels was $6.6 million more than in
the First Half 2000.

Net cash used in investing activities was $8.1 million for the First Half
2001, compared to $6.5 million for the First Half 2000. The increase is due to
the opening of a new concept store in the First Half 2001.

For the First Half 2001, net cash used in financing activities was $7.5
million compared to $8.5 million provided by financing activities for the First
Half 2000, which represents reduced borrowing required for operating and
investing activities.

The Company believes that it will generate sufficient cash flow from
operations, as supplemented by its available borrowings under the Credit
Facilities, to meet anticipated working capital and capital expenditure
requirements, as well as debt service requirements under the Credit Facilities.

The Company may from time to time consider acquisitions of department store
assets and companies. Acquisition transactions, if any, are expected to be
financed through a combination of cash on hand from operations, available
borrowings under the Credit Facilities, and the possible issuance from time to
time of long-term debt or other securities. Depending upon the conditions in the
capital markets and other factors, the Company will from time to time consider
the issuance of debt or other securities, or other possible capital market
transactions, the proceeds of which could be used to refinance current
indebtedness or for other corporate purposes.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is subject to the risk of fluctuating interest rates in the
normal course of business, primarily as a result of its variable rate borrowing.
The Company has entered into a variable to fixed rate interest-rate swap
agreement to effectively reduce its exposure to interest rate fluctuations. A
hypothetical 100 basis point change in interest rates would not materially
affect the Company's financial position, liquidity or results of operations.

The Company does not maintain a trading account for any class of financial
instrument and is not directly subject to any foreign currency exchange or
commodity price risk. As a result, the Company believes that its market risk
exposure is not material to the Company's financial position, liquidity or
results of operations.

10
13

PART II. -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is currently involved in several legal proceedings arising from
its normal business activities and reserves have been established where
appropriate. However, no legal proceedings have arisen or become reportable
events during this quarter, and management believes that none of the remaining
legal proceedings will have a material adverse effect on the financial
condition, results of operations or cash flows of the Company.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

(a) Not Applicable.

(b) Not Applicable.

(d) Not Applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

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

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following Exhibits are included in this Quarterly Report on Form
10-Q:

<Table>

3(a) Amended Articles of Incorporation (previously filed as
Exhibit 3(a) to the Form 10-K filed on April 30, 1998 (the
"Form 10-K") and incorporated herein by reference)
3(b) Certificate of Amendment to the Amended Articles of
Incorporation (previously filed as Exhibit 3(b) to the
Company's form 10-Q for the quarterly period ended October
28, 2000 ("2000 3rd Quarter 10-Q") and incorporated herein
by reference)
3(c) Amended Code of Regulations (previously filed as Exhibit
3(c) to the 2000 3rd Quarter 10-Q and incorporated herein by
reference)
4(a) Stock Certificate for Common Stock (previously filed as
Exhibit 4(a) to the Company's Form 10/A-1 filed on January
23, 1998 and incorporated herein by reference)
4(b) Rights Agreement By and Between The Elder-Beerman Stores
Corp. and Norwest Bank Minnesota, N.A., dated as of December
30, 1997 (previously filed as Exhibit 4.1 to the Company's
Registration Statement on Form 8-A filed on November 17,
1998 (the "Form 8-A") and incorporated herein by reference)
4(c) Warrant Agreement by and Between Beerman-Peal Holdings, Inc.
and the Elder-Beerman Stores Corp. for 249,809 shares of
Common Stock at a strike price of $12.80 per share dated
December 30, 1997 (previously filed as Exhibit 4(d) to the
Form 10-K and incorporated herein by reference)
4(d) Warrant Agreement by and Between Beerman-Peal Holdings, Inc.
and the Elder-Beerman Stores Corp. for 374,713 shares of
Common Stock at a strike price of $14.80 per share dated
December 30, 1997 (previously filed as Exhibit 4(e) to the
Form 10-K and incorporated herein by reference)
</Table>

11
14
<Table>

4(e) Amendment No. 1 to the Rights Agreement, dated as of
November 11, 1998 (previously filed as Exhibit 4.2 to the
Form 8-A and incorporated herein by reference)
10(a) Separation and Retirement Agreement, dated as of September
4, 2001, by and between the Company and Frederick J.
Mershad.
</Table>

(b) No reports on Form 8-K were filed during the period.

12
15

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.

THE ELDER-BEERMAN STORES CORP.,
an Ohio corporation

By: /s/ Scott J. Davido
-------------------------------------
Scott J. Davido
Executive Vice President, Chief
Financial Officer and Treasurer
(on behalf of the Registrant and as
Principal Financial Officer)

Dated: September 13, 2001

13
16

EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------

3(a) Amended Articles of Incorporation (previously filed as
Exhibit 3(a) to the Form 10-K filed on April 30, 1998 (the
"Form 10-K"), and incorporated herein by reference)
3(b) Certificate of Amendment to the Amended Articles of
Incorporation (previously filed as Exhibit 3(b) to the
Company's form 10-Q for the quarterly period ended October
28, 2000 ("2000 3rd Quarter 10-Q") and incorporated herein
by reference)
3(c) Amended Code of Regulations (previously filed as Exhibit
3(c) to the 2000 3rd Quarter 10-Q and incorporated herein by
reference)
4(a) Stock Certificate for Common Stock (previously filed as
Exhibit 4(a) to the Company's Form 10/A-1 filed on January
23, 1998 and incorporated herein by reference)
4(b) Rights Agreement By and Between The Elder-Beerman Stores
Corp. and Norwest Bank Minnesota, N.A., dated as of December
30, 1997 (previously filed as Exhibit 4.1 to the Company's
Registration Statement on Form 8-A filed on November 17,
1998 (the "Form 8-A") and incorporated herein by reference)
4(c) Warrant Agreement by and Between Beerman-Peal Holdings, Inc.
and the Elder-Beerman Stores Corp. for 249,809 shares of
Common Stock at a strike price of $12.80 per share dated
December 30, 1997 (previously filed as Exhibit 4(e) to the
Form 10-K and incorporated herein by reference)
4(d) Warrant Agreement by and Between Beerman-Peal Holdings, Inc.
and the Elder-Beerman Stores Corp. for 374,713 shares of
Common Stock at a strike price of $14.80 per share dated
December 30, 1997 (previously filed as Exhibit 4(e) to the
Form 10-K and incorporated herein by reference)
4(e) Amendment No. 1 to the Rights Agreement, dated as of
November 11, 1998 (previously filed as Exhibit 4.2 to the
Form 8-A and incorporated herein by reference)
10(a) Separation and Retirement Agreement, dated as of September
4, 2001, by and between the Company and Frederick J.
Mershad.
</Table>