<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q




 [x]      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities 
          Act of 1934 for the Quarterly Period ended March 29, 1998.

Commission File Number: 0-14968
                       --------------------------------------------------------

                                 EATERIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  Oklahoma                                 73-1230348
------------------------------------------    --------------------------------
       (State or other jurisdiction of                  (I.R.S. Employer
       incorporation or organization)                  Identification No.)

      3240 W. Britton Rd., Ste. 202,
        Oklahoma City, Oklahoma                              73120
------------------------------------------    --------------------------------
 (Address of principal executive offices)                  (Zip Code)


                                 (405) 755-3607
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


         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.

[X] Yes [ ]No

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of May 10, 1998, 3,939,669
common shares, $.002 par value, were outstanding.


<PAGE>   2
                         EATERIES, INC. AND SUBSIDIARIES
                                    FORM 10-Q

                                      INDEX

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                         <C>
Part I.   FINANCIAL INFORMATION

    Item 1. Financial Statements

         Condensed Consolidated Balance Sheets
                  March 29, 1998 and
                  December 28, 1997 (unaudited)........................     4

         Condensed Consolidated Statements of
               Income (unaudited)
                  Thirteen weeks ended March 29, 1998
                  and March 30, 1997...................................     5

         Condensed Consolidated Statements of
               Cash Flows (unaudited)
                  Thirteen weeks ended March 29, 1998
                  and March 30, 1997...................................     6

         Notes to Condensed Consolidated Financial
               Statements (unaudited)..................................     7

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


Part II.  OTHER INFORMATION

    Item 6. Exhibits and Reports on Form 8-K...........................     21
</TABLE>





                                       2
<PAGE>   3








                                     PART I


                              FINANCIAL INFORMATION







                                       3
<PAGE>   4

ITEM 1.  FINANCIAL STATEMENTS.

                         EATERIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                   March 29,       December 28,
                                                     1998              1997
                                                 ------------      ------------
                                                 (unaudited)
<S>                                              <C>               <C>         
                    ASSETS
CURRENT ASSETS:
          Cash and cash equivalents              $    759,671      $  1,331,363
          Receivables                                 952,902         1,121,365
          Deferred income taxes                       452,000           452,000
          Inventories                               2,151,914         2,296,282
          Other                                       656,268           357,903
                                                 ------------      ------------
                 Total current assets               4,972,755         5,558,913
                                                 ------------      ------------

PROPERTY AND EQUIPMENT                             39,886,076        42,460,936
Less landlord finish-out allowances               (14,980,564)      (14,880,564)
Less accumulated depreciation and
    amortization                                   (7,844,521)       (7,201,463)
                                                 ------------      ------------
         Net property and equipment                17,060,991        20,378,909
                                                 ------------      ------------
DEFERRED INCOME TAXES                                 244,000           398,000
GOODWILL                                            1,664,228         2,479,045
OTHER ASSETS, net                                     689,692           959,817
                                                 ------------      ------------
                                                 $ 24,631,666      $ 29,774,684
                                                 ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
          Accounts payable                       $  4,527,602      $  4,850,211
          Accrued liabilities                       3,761,061         4,538,150
          Current portion of long-term
            obligations                               468,807         1,014,715
                                                 ------------      ------------
                  Total current liabilities         8,757,470        10,403,076
                                                 ------------      ------------
OTHER NONCURRENT LIABILITIES                          753,432           741,138
                                                 ------------      ------------
LONG-TERM OBLIGATIONS, net of
    current portion                                 3,518,438         7,637,415
                                                 ------------      ------------
COMMITMENTS
STOCKHOLDERS' EQUITY:
          Preferred stock, none issued                     --                --
          Common stock                                  8,524             8,444
          Additional paid-in capital                9,561,513         9,486,594
          Retained earnings                         3,599,572         3,065,300
                                                 ------------      ------------
                                                   13,169,609        12,560,338
          Treasury stock, at cost,
             347,115 shares at
             March 29, 1998 and
             December 28, 1997                     (1,567,283)       (1,567,283)
                                                 ------------      ------------
                  Total stockholders' equity       11,602,326        10,993,055
                                                 ------------      ------------
                                                 $ 24,631,666      $ 29,774,684
                                                 ============      ============
</TABLE>


            See notes to condensed consolidated financial statements.


                                       4
<PAGE>   5

                         EATERIES, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                                       Thirteen Weeks Ended
                                                     March 29,        March 30,
                                                       1998             1997
                                                   ------------     ------------
<S>                                                <C>              <C>         
REVENUES:
     Food and beverage sales                       $ 23,132,878     $ 14,031,238
     Franchise fees and royalties                       106,593           70,639
     Other income                                       260,553          101,538
                                                   ------------     ------------
                                                     23,500,025       14,203,415
                                                   ------------     ------------
COSTS AND EXPENSES:
     Costs of sales                                   6,327,769        4,081,825
     Operating expenses                              13,962,645        8,188,374
     Pre-opening costs                                  131,000           18,000
     General and administrative                       1,451,451          981,858
     Depreciation and amortization                      728,758          542,026
     Interest expense                                   140,130           67,524
                                                   ------------     ------------
                                                     22,741,753       13,879,607
                                                   ------------     ------------

INCOME BEFORE INCOME TAXES                              758,272          323,808

PROVISION FOR INCOME TAXES                              224,000           95,000
                                                   ------------     ------------

NET INCOME                                         $    534,272     $    228,808
                                                   ============     ============


NET INCOME PER COMMON SHARE                        $       0.14     $       0.06
                                                   ============     ============

NET INCOME PER COMMON SHARE
    ASSUMING DILUTION                              $       0.13     $       0.06
                                                   ============     ============
</TABLE>



            See notes to condensed consolidated financial statements.


                                       5
<PAGE>   6

                         EATERIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                         Thirteen Weeks Ended
                                                                       March 29,          March 30,
                                                                         1998               1997
                                                                      ------------      ------------
<S>                                                                   <C>               <C>         
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:
Cash flows from operating activities:
   Net income                                                         $    534,272      $    228,808
   Adjustments to reconcile net income to net
      cash provided by (used in) operating activities:
         Depreciation & amortization                                       728,758           542,026
         Gain on sale of assets                                               (942)               --
         Common stock bonuses                                                   --             1,950
         Deferred income taxes                                             204,000            95,000
         (Increase) decrease in:
             Receivables                                                    93,393          (125,130)
             Inventories                                                   (39,273)           82,671
             Other                                                        (288,259)          (10,276)
         Increase (decrease) in:
             Accounts payable                                             (857,511)         (216,411)
             Accrued liabilities                                          (679,065)         (512,266)
             Other noncurrent liabilities                                    8,681            49,366
                                                                      ------------      ------------
Total adjustments                                                         (830,218)          (93,070)
                                                                      ------------      ------------
   Net cash provided by (used in) operating activities                    (295,946)          135,738
                                                                      ------------      ------------

Cash flows from investing activities:
   Capital expenditures                                                 (1,564,086)         (838,348)
   Landlord allowances                                                     206,250           294,616
   Net cash paid for restaurant acquisitions                                (6,329)               --
   Proceeds from sale of property and equipment                          5,182,341                --
   Payments received on notes receivable                                    42,501                --
   Decrease (increase) in other assets                                     (31,439)           42,484
                                                                      ------------      ------------
      Net cash provided by (used) in investing activities                3,829,238          (501,248)
                                                                      ------------      ------------

Cash flows from financing activities:
   Payments on long-term obligations                                    (4,864,885)           (6,782)
   Borrowing under note payable                                                 --           115,000
   Net borrowings under revolving credit agreement                         200,000         1,250,000
   Increase (decrease) in bank overdraft included in
     accounts payable                                                      534,902          (872,545)
   Proceeds from sale of common stock                                           --               325
   Proceeds from exercise of stock options                                  24,999            18,000
                                                                      ------------      ------------
      Net cash provided by financing activities                         (4,104,984)          503,998
                                                                      ------------      ------------

Net increase (decrease) in cash & cash equivalents                        (571,692)          138,488
Cash and cash equivalents at beginning of period                         1,331,363           695,481
                                                                      ------------      ------------
Cash and cash equivalents at end of period                            $    759,671      $    833,969
                                                                      ============      ============
</TABLE>

See notes to condensed consolidated financial statements.


                                       6
<PAGE>   7
                         EATERIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

Note 1 - Basis of Preparation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the thirteen weeks ended March 29, 1998 are
not necessarily indicative of the results that may be expected for the year
ended December 27, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 28, 1997.

Note 2 - Balance Sheet Information

Receivables are comprised of the following:

<TABLE>
<CAPTION>
                                                              March 29,      December 28,
                                                                1998             1997
                                                            ------------     ------------
<S>                                                         <C>              <C>         
Franchisees ...........................................     $     42,481     $     35,693
Insurance refunds .....................................          173,665          488,594
Landlord finish-out allowances ........................               --          106,250
Other .................................................          736,756          490,828
                                                            ------------     ------------
                                                            $    952,902     $  1,121,365
                                                            ============     ============
</TABLE>

Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
                                                             March 29,       December 28,
                                                                1998             1997
                                                            ------------     ------------
<S>                                                         <C>              <C>         
Compensation ..........................................     $  1,811,857     $  2,191,775
Taxes, other than income ..............................          753,647          815,039
Other .................................................        1,195,557        1,531,336
                                                            ------------     ------------
                                                            $  3,761,061     $  4,538,150
                                                            ============     ============
</TABLE>

Note 3 - Supplemental Cash Flow Information

For the thirteen-week periods ended March 29, 1998 and March 30, 1997, the
Company had the following non-cash investing activity:


                                       7
<PAGE>   8

<TABLE>
<CAPTION>
                                                                Thirteen Weeks Ended
                                                             March 29,        March 30,
                                                                1998             1997
                                                            ------------     ------------
<S>                                                         <C>              <C>         
Net decrease in receivables for
    landlord finish-out allowances                          $    106,250     $     97,384
Increase in additional paid-in
    capital as a result of tax
    benefits from exercise of
    non-qualified stock options                                   50,000             --
</TABLE>

Note 4 - Restaurant Acquisitions and Dispositions

In November 1997, the Company, through its wholly-owned subsidiary, Fiesta
Restaurants, Inc., acquired from Famous Restaurants, Inc. and its subsidiaries
("Famous"), substantially all of the assets comprising 17 Mexican restaurants,
and the corporate headquarters of Famous (the "Famous Acquisition"). The
acquired restaurants operated under the names: Garcia's (10), Casa Lupita (five)
and Carlos Murphy's (two). The purchase price for the assets was approximately
$10,652,000 of which $8,631,415 was paid in cash at closing and the balance
represented estimated liabilities of Famous assumed by the Company and
transaction costs. The acquisition has been accounted for under the purchase
method.

In February 1998, the Company sold substantially all of the assets, including
real estate, comprising three of the Casa Lupita restaurants (acquired from
Famous) to Chevy's, Inc. ("Chevy's") for a cash price of approximately
$5,300,000. The proceeds from this sale were used to pay-down debt primarily
related to the Famous Acquisition. In connection with this transaction, the
Company entered into an agreement to sell substantially all of the assets
related to one additional Casa Lupita to Chevy's for a price of approximately
$1,000,000. This transaction closed in May 1998. The proceeds from this
transaction were used to pay-down debt. As a result of this transaction, the net
book value of the assets related to this restaurant as of March 29, 1998, was
adjusted to the approximate sales price of the assets. This adjustment resulted
in a decrease in goodwill of $900,000 with a corresponding increase in leasehold
improvements.

In March 1998, the Company acquired one additional Garcia's from Famous. In
connection with this transaction, Famous paid the Company $70,000 to assume the
real estate lease associated with this location and approximately $60,000 to
assume certain liabilities related to this location. The liabilities assumed by
the Company cannot exceed the amount paid to the Company by Famous.

Note 5 - Net Income Per Common Share

In March 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share," which requires the calculation of basic and diluted earnings per share
("EPS"). Basic EPS includes no dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS is computed by dividing net income
available to common stockholders by the sum of the weighted-average number of
common shares outstanding for the period plus common stock equivalents. The
Company adopted the provisions of SFAS No. 128 in the fourth quarter of 1997,
and 



                                       8

<PAGE>   9

as required has restated prior period EPS amounts to conform to the new
accounting standard.

The following table sets forth the computation of basic and diluted EPS:

<TABLE>
<CAPTION>
                                                                            Thirteen Weeks Ended
                                                                      ---------------------------------
                                                                         March 29,          March 30,
                                                                           1998               1997
                                                                      --------------     --------------
<S>                                                                   <C>                <C>           
Numerator:
      Net income ................................................     $      534,272     $      228,808
                                                                      ==============     ==============

Denominator:
      Denominator for basic EPS- weighted average shares
        outstanding
                                                                           3,898,406          3,863,267
      Dilutive effect of nonqualified stock options
                                                                             218,253            142,738
                                                                      --------------     --------------
        Denominator for diluted EPS .............................          4,116,659          4,006,005
                                                                      ==============     ==============
Basic EPS .......................................................     $         0.14     $         0.06
                                                                      ==============     ==============
Diluted EPS .....................................................     $         0.13     $         0.06
                                                                      ==============     ==============
</TABLE>


Note 6 - Comprehensive Income

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
SFAS No. 130 requires that all items required to be recognized under accounting
standards as components of comprehensive income, consisting of both net income
and those items that bypass the income statement and are reported in a balance
within a separate component of stockholders' equity, be reported in a financial
statement that is displayed with the same prominence as other financial
statements. SFAS No. 130 is effective for financial statements for periods
beginning after December 15, 1997, and accordingly, has been adopted by the
Company in the first quarter of 1998. The Company had no components of
comprehensive income other than net income during the thirteen week periods
ended March 29, 1998 and March 30, 1997. Thus, comprehensive income equals net
income for both quarterly periods.

Note 7 - Other New Accounting Standards

In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information," which is effective for financial statements
for fiscal years beginning after December 15, 1997. SFAS No. 131 is not required
to be applied to interim financial statements in the initial year of its
application. SFAS No. 131 establishes standards for reporting information about
operating segments in annual 




                                       9

<PAGE>   10

financial statements and requires selected information about operating segments
in interim financial reports to shareholders. It also establishes standards for
related disclosures about products and services, geographic areas and major
customers. The Company does not anticipate that the adoption of this new
accounting standard will create additional business segment reporting
requirements.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures About
Pensions and Other Postretirement Benefits," which is effective for fiscal years
beginning after December 15, 1997. SFAS No. 132 revises disclosures about
pensions and other postretirement benefit plans. It does not change the
measurement or recognition of costs associated with those plans. The Company
does not expect the adoption of SFAS No. 132 to have a material impact on its
financial position or its results of operations.

In March 1998, the American Institute of Certified Public Accountants ("AICPA")
issued Statement of Position ("SOP") No. 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." Amounts capitalized
or expensed by the Company for internal-use software projects are not expected
to differ materially as a result of SOP 98-1, as the prescribed accounting
treatment is consistent with the Company's current accounting policy. SOP 98-1,
the effect of which is to be recognized prospectively, is effective for 1999
financial statements.

In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-up
Activities," which requires start-up costs to be expensed as incurred. SOP 98-5
is effective for fiscal years beginning after December 15, 1998, although
earlier application is encouraged. The Company does not expect the adoption of
SOP 98-5 to have a material effect on its financial position or results of
operations, as the prescribed accounting treatment is consistent with the
Company's current accounting policy regarding start-up costs.



                                       10

<PAGE>   11
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS.

From time to time, the Company may publish forward-looking statements relating
to certain matters including anticipated financial performance, business
prospects, the future opening of Company-owned and franchised restaurants,
anticipated capital expenditures, and other matters. All statements other than
statements of historical fact contained in this Form 10-Q or in any other report
of the Company are forward-looking statements. The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for forward-looking statements. In
order to comply with the terms of that safe harbor, the Company notes that a
variety of factors, individually or in the aggregate, could cause the Company's
actual results and experience to differ materially from the anticipated results
or other expectations expressed in the Company's forward-looking statements
including, without limitation, the following: consumer spending trends and
habits; competition in the casual dining restaurant segment; weather conditions
in the Company's operating regions; laws and government regulations; general
business and economic conditions; availability of capital; success of operating
initiatives and marketing and promotional efforts; and changes in accounting
policies. In addition, the Company disclaims any intent or obligation to update
those forward-looking statements.

INTRODUCTION

As of March 29, 1998, the Company owned and operated 62 ( 44 Garfield's, 13
Garcia's, two Casa Lupitas, two Pepperoni Grills and one Carlos Murphy's) and
franchised 11 (nine Garfield's and two Garcia's) restaurants. One of the
Company-owned Garcia's as of March 29, 1998, was temporarily closed for remodel.
Subsequent to March 29, 1998, the Company opened one new Garfield's and sold one
Casa Lupita. The Company currently has one new Garcia's in development. As of
the date of this report, the entire system includes 73 restaurants of which 62
are Company-owned (45 Garfield's, 13 Garcia's, one Carlos Murphy's, one Casa
Lupita, and two Pepperoni Grills) and 11 are franchised (nine Garfield's and two
Garcia's).

In November 1997, the Company, through its wholly-owned subsidiary, Fiesta
Restaurants, Inc. ("Fiesta"), acquired from Famous Restaurants, Inc. and its
subsidiaries ("Famous"), substantially all of the assets comprising 17 Mexican
restaurants and the corporate headquarters of Famous (the "Famous Acquisition").
The acquired restaurants operated under the names: Garcia's (10), Casa Lupita
(five) and Carlos Murphy's (two). The purchase price for the assets was
approximately $10,652,000, of which $8,631,415 was paid in cash at closing and
the balance represented estimated liabilities of Famous assumed by the Company
and transaction costs. The cash portion of the purchase price was financed
through a five-year term loan with a bank (see Liquidity and Capital Resources
for a discussion of this term loan).

In February 1998, the Company sold substantially all of the assets, including
real estate, comprising three of the Casa Lupita restaurants to Chevy's, Inc.
("Chevy's") for a cash price of approximately $5,300,000. The proceeds form this
sale were used to pay-down debt primarily related to the Famous Acquisition. In
connection with this transaction, the Company entered into an agreement to sell
substantially all of the assets related to one additional Casa Lupita to Chevy's
for a price of approximately $1,000,000. This second transaction closed in May
1998.



                                       11
<PAGE>   12

The decision to sell the four Casa Lupita locations was the result of a plan to
consolidate Fiesta's operations and focus on the expansion of Garcia's. In May
1998, the Company completed the conversion of the one remaining Casa Lupita to a
Garcia's and is currently converting one of the Carlos Murphy's locations to a
Garcia's.

PERCENTAGE RESULTS OF OPERATIONS AND RESTAURANT DATA

The following table sets forth, for the periods indicated, (i) the percentages
that certain items of income and expense bear to total revenues, unless
otherwise indicated, and (ii) selected operating data:

<TABLE>
<CAPTION>
                                                                Thirteen Weeks Ended
                                                             March 29,          March 30,
                                                                1998              1997
                                                            ------------      ------------
<S>                                                                 <C>               <C>  
Statements of Income Data:
Revenues:
     Food and beverage sales ..........................             98.4%             98.8%
     Franchise fees and royalties .....................              0.5%              0.5%
     Other income .....................................              1.1%              0.7%
                                                            ------------      ------------
                                                                   100.0%            100.0%
Costs and Expenses:
     Costs of sales (1) ...............................             27.4%             29.1%
     Operating expenses (1) ...........................             60.4%             58.4%
     Pre-opening costs (1) ............................              0.6%              0.1%
     General and administrative .......................              6.2%              6.9%
     Depreciation and amortization (1) ................              3.2%              3.9%
     Interest expense .................................              0.6%              0.5%
                                                            ------------      ------------

Income before income taxes ............................              3.2%              2.3%

Provision for income taxes ............................              1.0%              0.7%
                                                            ------------      ------------

Net income ............................................              2.2%              1.6%
                                                            ============      ============

Selected Operating Data:
(Dollars in thousands)
System-wide sales:
     Company restaurants ..............................     $     23,133      $     14,031
     Franchise restaurants ............................            2,925             1,994
                                                            ------------      ------------
          Total .......................................     $     26,058      $     16,025
                                                            ============      ============
Number of restaurants (at end of period):
     Company restaurants ..............................               62                43
     Franchise restaurants ............................               11                 8
                                                            ------------      ------------
          Total .......................................               73                51
                                                            ============      ============
</TABLE>

(1) As a percentage of food and beverage sales.



                                       12

<PAGE>   13

RESULTS OF OPERATIONS

For the quarter ended March 29, 1998, the Company recorded net income of
$534,000 ($0.14 per common share; $0.13 per common share assuming dilution) on
revenues of $23,500,000. This compares to net income of $229,000 ($0.06 per
common share; $0.06 per common share assuming dilution) for the quarter ended
March 30, 1997 on revenues of $14,203,000.

REVENUES

Company revenues for the quarter ended March 29, 1998 increased 65% over the
revenues reported for the same period in 1997. The number of Company restaurants
operating at the end of each respective first quarter and the number of
operating months during that quarter were as follows:

<TABLE>
<CAPTION>
          Period          Number of           Number of        Average Monthly
           Ended          Units Open       Operating Months    Sales Per Unit
---------------------   --------------     ----------------    ---------------
<S>                                <C>                <C>           <C>     
Garfield's (1)
  March 29, 1998                   46                 136           $113,300
  March 30, 1997                   43                 131            107,100

Garcia's (2)
  March 29, 1998                   16                  48           $161,000
  March 30, 1997                    -                   -                  -
</TABLE>

(1)  Includes Pepperoni Grill.
(2)  Includes Carlos Murphy's and Casa Lupita.

Average monthly sales per unit for Garfield's increased by $6,200 or 5.8% during
the first quarter of 1998 versus 1997. This increase is primarily attributable
to a successful television advertising campaign during the first quarter of
1998, and the success of continued radio and newspaper advertising.

Franchise fees and continuing royalties increased to $107,000 during the quarter
ended March 29, 1998, versus $71,000 during the quarter ended March 30, 1997.
This increase is primarily due to the recognition of the initial franchise fee
related to the opening of a new franchised Garfield's during the first quarter
of 1998.

Other income for the quarter ended March 29, 1998 was $261,000 as compared to
the previous year's amount of $102,000. During the first quarter of 1998, the
Company was paid a fee of $120,000 to terminate an agreement under which the
Company managed a Carlos Murphy's restaurant owned by an independent third
party. Under this agreement, the Company was paid a fee equal to 4% of sales to
manage the restaurant for a term of two years. This management agreement
termination fee is included in other income for the quarter ended March 29,
1998.



                                       13
<PAGE>   14

COSTS AND EXPENSES

The following is a comparison of costs of sales and labor costs (excluding
payroll taxes and fringe benefits) as a percentage of food and beverage sales at
Company-owned restaurants:

<TABLE>
<CAPTION>
                                       Thirteen Weeks Ended
                                   --------------------------
                                    March 29,      March 30,
                                      1998            1997
                                   ----------      ----------
<S>                                      <C>             <C>  
Garfield's (1):
  Costs of sales .............           28.3%           29.1%

  Labor costs ................           28.5%           26.5%
                                   ----------      ----------

    Total ....................           56.8%           55.6%
                                   ==========      ==========

Garcia's (2):
  Costs of sales .............           25.4%             --

  Labor costs ................           29.6%             --
                                   ----------      ----------

    Total ....................           55.0%             --
                                   ==========      ==========

Total Company:
  Costs of sales .............           27.4%           29.1%

  Labor costs ................           28.9%           26.5%
                                   ----------      ----------

    Total ....................           56.3%           55.6%
                                   ==========      ==========
</TABLE>

(1)  Includes Pepperoni Grill.
(2)  Includes Carlos Murphy's and Casa Lupita.

The decrease in cost of sales percentages for Garfield's during 1998 versus 1997
primarily relates to continued menu development, increased vendor rebates and
continued improvements in store-level food and beverage cost controls.

Labor costs for Garfield's increased to 28.5% of food and beverage sales during
the quarter ended March 29, 1998, versus 26.5% during the 1997 comparable
period. This increase is primarily due to increased kitchen labor and
restaurant-level management salaries and incentive compensation. The increase in
kitchen labor is primarily due to an increase in the Federal minimum wage in
late 1997.

For the quarter ended March 29, 1998, operating expenses as a percentage of food
and beverage sales increased to 60.4% from 58.4% in the quarter ended March 30,
1997. This increase principally relates to Garfield's increased labor costs (as
previously explained) and the addition of the Garcia's, Carlos Murphy's and 




                                       14

<PAGE>   15

Casa Lupitas which generally have higher labor costs than Garfield's due to more
labor intensive kitchen operations.

Restaurant pre-opening development costs, which are expensed as incurred, were
$131,000 in 1998 (0.6% of food and beverage sales) versus $18,000 (0.1% of food
and beverage sales) in 1997. Two restaurants were opened in the 1998 first
quarter while no restaurants were opened in the 1997 first quarter.

Under the Company's policy of expensing pre-opening costs as incurred, income
from operations, on an annual and quarterly basis, could be adversely affected
during periods of restaurant development; however, the Company believes that its
initial investment in the restaurant pre-opening costs yields a long-term
benefit of increased operating income in subsequent periods.

During the quarters ended March 29, 1998 and March 30, 1997, general and
administrative costs as a percentage of total revenues were 6.2% and 6.9%,
respectively. The first quarter 1998 decrease as a percentage of revenues
primarily relates to the growth in revenues exceeding the growth in general and
administrative costs as a result of the Famous Acquisition. The higher absolute
levels of general and administrative costs from 1997 to 1998 are related
primarily to additional personnel costs and related costs of operating the
expanding restaurant system. The Company anticipates that its costs of
supervision and administration of Company and franchise stores will continue to
increase at a slower rate than revenue increases during the next few years.

Depreciation and amortization expense increased during the first quarter of 1998
to $729,000 (3.2% of food and beverage sales) compared to $542,000 (3.9% of food
and beverage sales) in 1997. The increase primarily relates to the increase in
net assets subject to depreciation and amortization in 1998 versus 1997 because
of additional restaurants opened or acquired since March 30, 1997.

Interest expense during the first quarter of 1998 was $140,000 (0.6% of total
revenues) versus $68,000 (0.5% of total revenues) in the first quarter of 1997.
This increase primarily relates to an increase in long-term debt resulting from
the Famous Acquisition, partially offset by a lower average borrowing rate in
1998 versus 1997.

INCOME TAXES

The Company's provision for income taxes was $224,000 during the first quarter
of 1998 versus $95,000 during 1997. The effective tax rate for the Company
during the first quarter of 1997 was 29.5% versus 29.3% during the previous
year's first quarter.

NET INCOME PER SHARE AMOUNTS

In March 1997, the Financial Accounting Standards Board ("FASB")



                                       15

<PAGE>   16

issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
Per Share," which requires the calculation of basic and diluted earnings per
share (EPS). Basic EPS includes no dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding for the period. The weighted-average common share outstanding for
the basic EPS calculation were 3,898,406 and 3,863,267 in the quarters ended
March 29, 1998 and March 30, 1997, respectively. Diluted EPS is computed by
dividing net income available to common stockholders by the sum of the
weighted-average number of common shares outstanding for the period plus
dilutive common stock equivalents. The sum of the weighted-average common shares
and common share equivalents for the diluted EPS calculation were 4,116,659 and
4,006,005 for the quarters ended March 29, 1998 and March 30, 1997,
respectively. The Company adopted the provisions of SFAS No. 128 in the fourth
quarter of 1997, and, as required, has restated all prior period EPS amounts to
conform to the new accounting standard.

IMPACT OF INFLATION

The impact of inflation on the costs of food and beverage products, labor and
real estate can affect the Company's operations. Over the past few years,
inflation has had a lesser impact on the Company's operations due to the lower
rates of inflation in the nation's economy and the economic conditions in the
Company's market areas.

Management believes the Company has historically been able to pass on increased
costs through certain selected menu price increases and increased productivity
and purchasing efficiencies, but there can be no assurance that the Company will
be able to do so in the future. Management anticipates that the average cost of
restaurant real estate leases and construction costs could increase in the
future which could affect the Company's ability to expand. In addition, mandated
health care and an increase in the Federal or state minimum wages could
significantly increase the Company's costs of doing business.

LIQUIDITY AND CAPITAL RESOURCES

At March 29, 1998, the Company's working capital ratio was 0.57 to 1 compared to
0.53 to 1 at December 28, 1997. The Company's working capital was $(3,785,000)
at March 29, 1998 versus $(4,844,000) at December 28, 1997. As is customary in
the restaurant industry, the Company has operated with negative working capital
and has not required large amounts of working capital. Historically, the Company
has leased the majority of its restaurant locations and through a strategy of
controlled growth financed its expansion from operating cash flow, proceeds from
the sale of common stock and utilizing the Company's revolving line of credit.

During the quarter ended March 29, 1998, the Company had net cash 



                                       16

<PAGE>   17

used in operating activities of $(296,000) as compared to net cash provided by
operating activities of $136,000 during the comparable 1997 period.

The Company plans to open three to five units during 1998 in restaurant
locations leased in regional malls and in free-standing sites. The Company
believes the cash generated from its operations and borrowing availability under
its credit facility (described below), will be sufficient to satisfy the
Company's net capital expenditures and working capital requirements during 1998.

In August 1995, the Company entered into an agreement with a bank for a
revolving line of credit for $3,000,000. In July 1996, the Company's $3,000,000
revolving line of credit was increased to $5,000,000 and the term was extended
by one year to August, 1999. In November 1997, the Company entered into a new
loan agreement with a bank. This loan agreement provides for a $6,000,000
revolving line of credit and a term loan in the principal amount not to exceed
the lesser of $9,500,000, or the actual acquisition cost of the assets
purchased from Famous Restaurants, Inc., under the Asset Purchase Agreement
dated November 14, 1997. As of March 29, 1998, the Company had outstanding
borrowings of $3,774,000 under the term loan feature. There were $200,000 of
outstanding borrowings under the revolving line of credit as of March 29, 1998.
Outstanding borrowings under both the revolving line of credit and term loan
bear interest at three-month LIBOR plus 1.25% (6.88% as of March 29, 1998). The
interest rate is adjusted quarterly. There is no non-use fee related to either
facility. The revolving line of credit has a five-year term with final maturity
in November 2002. Under the term loan, outstanding principal and interest are
payable quarterly in the amount necessary to fully amortize the outstanding
principal balance over a seven-year period, with a final maturity in November
2002. Borrowings under this loan agreement are secured by all of the Company's
real estate. This loan agreement contains, among other things, certain
financial covenants and restrictions. As of March 29, 1998, the Company was in
compliance with these financial covenants and restrictions. The revolving
credit facility included in this loan agreement provides the Company adequate
borrowing capacity to continue its expansion plans for Garfield's and Garcia's
for the next two years.

In November 1997, the Company entered into an interest rate swap agreement with
a bank to hedge its risk exposure to potential increases in LIBOR. This
agreement has a term of five years and an initial notional amount of $9,500,000.
The notional amount declines quarterly over the life of the agreement on a
seven-year amortization schedule assuming a fixed interest rate of 7.68%. Under
the terms of the interest rate swap agreement, the Company pays interest
quarterly on the notional amount at a fixed rate of 7.68%, and receives interest
quarterly on the notional amount at a floating rate of three-month LIBOR plus
1.25%.



                                       17
<PAGE>   18

In April 1997, the Company's Board of Directors authorized the repurchase of up
to 200,000 shares of the Company's common stock. In July 1997, an additional
200,000 shares were authorized for repurchase. As of March 29, 1998, 55,100
shares had been repurchased under this plan for a total purchase price of
approximately $160,000. No additional shares have been repurchased subsequent to
March 29, 1998.

OTHER

The use by many existing computer systems of a two-digit year date format rather
than four digits - the Year 2000 issue - impacts the Company's business systems
and facilities. The Company is working with its key suppliers and vendors to
ensure Year 2000 compliance. Although the ultimate outcome of the Year 2000
project cannot be guaranteed, management believes the cost of addressing the
Year 2000 issue will not be material to the consolidated results of operations
or financial condition of the Company.




                                       18

<PAGE>   19



                                     PART II

                                OTHER INFORMATION






                                       19
<PAGE>   20

ITEM 6.          EXHIBITS AND REPORTS ON FORM 8-K.

        (a)      Exhibit 27.1 - Financial Data Schedule.

        (b)      A Form 8-K/A was filed on February 6, 1998, with the Securities
                 and Exchange Commission ("SEC") regarding the Registrant's
                 acquisition of certain assets from Famous Restaurants, Inc. and
                 its subsidiaries. This Form 8-K/A amended a Form 8-K filed on
                 December 8, 1997, with the SEC, to include the required
                 financial statements and pro forma financial information
                 related to the acquisition. The financial statements filed with
                 this Form 8-K/A were:

                         1.   Statement of assets acquired and liabilities
                              assumed of the restaurants included in the Asset
                              Purchase Agreement among Fiesta Restaurants, Inc.,
                              a wholly-owned subsidiary of Eateries, Inc., and
                              Famous Restaurants, Inc. as of November 14, 1997
                              together with report of public accountants

                         2.   Statements of revenues and direct operating
                              expenses of the restaurants included in the Asset
                              Purchase Agreement among Fiesta Restaurants, Inc.,
                              a wholly-owned subsidiary of Eateries, Inc., and
                              Famous Restaurants, Inc. for each of the three
                              fiscal years in the period ended December 29,
                              1996, together with report of public accountants
                              and for the forty weeks ended October 6, 1996, and
                              October 5, 1997 (unaudited)


                 The pro forma financial statements included in this Form 8-K/A
                 were:


                         1.   Pro forma condensed balance sheet at September 
                              28, 1997 (unaudited)

                         2.   Pro forma condensed statement of income for the
                              year ended December 29, 1996 (unaudited)

                         3.   Pro forma condensed statement of income for the
                              thirty-nine weeks ended September 28, 1997
                              (unaudited)


                 A Form 8-K was filed on March 16, 1998, with the SEC regarding
                 the Registrant's sale of certain assets to Chevy's, Inc. This
                 Form 8-K included the following pro forma financial statements:



                                       20
<PAGE>   21

                         1.   Pro forma condensed balance sheet at September 
                              28, 1997 (unaudited)

                         2.   Pro forma condensed statement of income for the
                              year ended December 29, 1996 (unaudited)

                         3.   Pro forma condensed statement of income for the
                              thirty-nine weeks ended September 28, 1997
                              (unaudited)






                                       21
<PAGE>   22


                                   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.


                                      EATERIES, INC.
                                      Registrant


Date:  May 15, 1998                   By: /s/ COREY GABLE
                                         -------------------------------------
                                         Corey Gable
                                         Vice President/Treasurer
                                         Chief Financial and
                                          Accounting Officer




                                       22


<PAGE>   23

                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
EXHIBIT 
NUMBER              DESCRIPTION
------              -----------
<S>                 <C>
27.1                - Financial Data Schedule.
</TABLE>