<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 28, 1999.

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, 1999, 2,882,343
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 28, 1999 (unaudited) and
                  December 27, 1998 ......................................................................       4

         Condensed Consolidated Statements of
               Income (unaudited)
                  Thirteen weeks ended March 28, 1999
                  and March 29, 1998......................................................................       5

         Condensed Consolidated Statements of
               Cash Flows (unaudited)
                  Thirteen weeks ended March 28, 1999
                  and March 29, 1998......................................................................       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..............................................................      22
</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 28,       December 27,
                                                                                        1999             1998
                                                                                    ------------     ------------
                                                                                    (unaudited)

                            ASSETS
<S>                                                                                 <C>              <C>         
CURRENT ASSETS:
          Cash and cash equivalents                                                 $  2,472,634     $  1,297,638
          Receivables                                                                  1,224,675        1,121,814
          Deferred income taxes                                                          387,000          387,000
          Inventories                                                                    735,264          833,672
          Other                                                                        2,932,471        2,129,146
                                                                                    ------------     ------------
                 Total current assets                                                  7,752,044        5,769,270
                                                                                    ------------     ------------

PROPERTY AND EQUIPMENT                                                                43,208,577       42,229,238
Less landlord finish-out allowances                                                  (15,615,564)     (15,490,564)

Less accumulated depreciation and
    amortization                                                                     (10,772,052)      (9,971,946)
                                                                                    ------------     ------------
         Net property and equipment                                                   16,820,961       16,766,728
                                                                                    ------------     ------------

DEFERRED INCOME TAXES                                                                    264,000          328,000
GOODWILL                                                                               2,284,046        2,325,417
OTHER ASSETS, net                                                                        629,513          630,426
                                                                                    ------------     ------------
                                                                                    $ 27,750,564     $ 25,819,841
                                                                                    ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
          Accounts payable                                                          $  3,792,955     $  4,294,032
          Accrued liabilities                                                          4,351,949        4,398,877
          Current portion of long-term
            obligations                                                                  993,489          436,514
                                                                                    ------------     ------------
                  Total current liabilities                                            9,138,393        9,129,423
                                                                                    ------------     ------------

OTHER NONCURRENT LIABILITIES                                                             857,913          830,078
                                                                                    ------------     ------------
LONG-TERM OBLIGATIONS, net of
    current portion                                                                   10,631,542        3,409,356
                                                                                    ------------     ------------

COMMITMENTS
STOCKHOLDERS' EQUITY:
          Preferred stock, none issued                                                        --               --
          Common stock                                                                     8,724            8,694
          Additional paid-in capital                                                  10,011,311        9,952,216
          Retained earnings                                                            4,495,412        4,248,487
                                                                                    ------------     ------------
                                                                                      14,515,447       14,209,397
          Treasury stock, at cost, 1,479,677 and 384,015 shares at March 28,
             1999 and December 27, 1998,
             respectively                                                             (7,392,731)      (1,758,413)
                  Total stockholders'
                   equity                                                              7,122,716       12,450,984
                                                                                    ------------     ------------

                                                                                    $ 27,750,564     $ 25,819,841
                                                                                    ============     ============
</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 28,       March 29,
                                                          1999            1998
                                                      ------------    ------------

<S>                                                   <C>             <C>         
REVENUES:
     Food and beverage sales                          $ 22,904,457    $ 23,132,879
     Franchise fees and royalties                           67,838         106,593
     Other income                                          101,525         260,553
                                                      ------------    ------------
                                                        23,073,820      23,500,025
                                                      ------------    ------------
COSTS AND EXPENSES:
     Costs of sales                                      6,269,749       6,327,769
     Operating expenses                                 13,924,863      13,962,645
     Pre-opening costs                                      99,000         131,000
     General and administrative                          1,440,493       1,451,451
     Depreciation and amortization                         843,040         728,758
     Interest expense                                      145,750         140,130
                                                      ------------    ------------
                                                        22,722,895      22,741,753
                                                      ------------    ------------

INCOME BEFORE INCOME TAXES                                 350,925         758,272

PROVISION FOR INCOME TAXES                                 104,000         224,000
                                                      ------------    ------------

NET INCOME                                            $    246,925    $    534,272
                                                      ============    ============


BASIC EARNINGS PER SHARE                              $       0.07    $       0.14
                                                      ============    ============

DILUTED EARNINGS PER SHARE                            $       0.07    $       0.13
                                                      ============    ============
</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 28,        March 29,
                                                                                1999             1998
                                                                            ------------     ------------
<S>                                                                         <C>              <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:
Cash flows from operating activities:
   Net income                                                               $    246,925     $    534,272
   Adjustments to reconcile net income to net
      cash provided by (used in) operating activities:
         Depreciation & amortization                                             843,040          728,758
         Gain on sale of assets                                                       --             (942)
         Deferred income taxes                                                    80,000          204,000
         (Increase) decrease in:
             Receivables                                                        (104,439)          93,393
             Inventories                                                          98,408          (39,273)
             Other                                                              (803,326)        (288,259)
         Increase (decrease) in:
             Accounts payable                                                    242,897         (857,511)
             Accrued liabilities                                                 (46,927)        (679,065)
             Other noncurrent liabilities                                         27,835            8,681
                                                                            ------------     ------------
Total adjustments                                                                337,488         (830,218)
                                                                            ------------     ------------
   Net cash provided by (used in) operating activities
                                                                                 584,413         (295,946)
                                                                            ------------     ------------

Cash flows from investing activities:
   Capital expenditures                                                         (979,342)      (1,564,086)
   Landlord allowances                                                           125,000          206,250
   Net cash paid for restaurant acquisitions                                          --           (6,329)
   Proceeds from sale of property and equipment                                       --        5,182,341
   Payments received on notes receivable                                           1,579           42,501
   Increase in other assets                                                         (650)         (31,439)
                                                                            ------------     ------------
      Net cash provided by (used in) investing activities
                                                                                (853,413)       3,829,238
                                                                            ------------     ------------

Cash flows from financing activities:
   Payments on long-term obligations                                                  --       (4,864,885)
   Borrowings under long-term obligations                                      5,463,333               --
   Net borrowings under revolving credit agreements                            2,315,829          200,000
   Increase (decrease) in bank overdraft included in accounts payable           (743,973)         534,902
   Repurchase of treasury stock                                               (5,634,318)              --
   Proceeds from exercise of stock options                                        43,125           24,999
                                                                            ------------     ------------
      Net cash provided by (used in) financing activities
                                                                              (1,443,996)      (4,104,984)
                                                                            ------------     ------------

Net increase (decrease) in cash & cash equivalents                             1,174,996         (571,692)
Cash and cash equivalents at beginning of period                               1,297,638        1,331,363
                                                                            ------------     ------------
Cash and cash equivalents at end of period                                  $  2,472,634     $    759,671
                                                                            ============     ============
</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 28, 1999 are not necessarily indicative of the results that
may be expected for the year ended December 26, 1999. 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 27,
1998.

Note 2 - Balance Sheet Information

Receivables are comprised of the following:

<TABLE>
<CAPTION>
                                              March 28,      December 27,
                                                1999            1998
                                            ------------    ------------

<S>                                         <C>             <C>         
Franchisees......................           $     64,968    $     73,274
Insurance refunds................                264,984         270,084
Landlord finish-out allowances...                 10,000          10,000
Other............................                884,723         768,456
                                            ------------    ------------
                                            $  1,224,675    $  1,121,814
                                            ============    ============
</TABLE>


Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
                                              March 28,      December 27,
                                                1999            1998
                                            ------------    ------------

<S>                                         <C>             <C>         
Compensation....................            $  2,223,651    $  2,087,295
Taxes, other than income........                 849,135         888,209
Other...........................               1,279,163       1,423,373
                                            ------------    ------------
                                            $  4,351,949    $  4,398,877
                                            ============    ============
</TABLE>

Note 3 - Supplemental Cash Flow Information

For the thirteen-week periods ended March 28, 1999 and March 29, 1998, the
Company had the following non-cash investing activity:


                                       7
<PAGE>   8

<TABLE>
<CAPTION>
                                                                      Thirteen Weeks Ended
                                                                  March 28,         March 29,
                                                                    1999              1998
                                                               --------------    --------------
 
<S>                                                            <C>               <C>           
Net decrease in receivables for landlord finish-out 
   allowances                                                  $            -    $      106,250

Increase in additional paid-in capital as a result of tax 
   benefits from the exercise of non-qualified stock options           16,000            50,000
</TABLE>


Note 4 - Stock Repurchases

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 28, 1999, 130,262
shares had been repurchased under this plan for a total purchase price of
approximately $556,000. No additional shares have been repurchased subsequent
to March 28, 1999.

In February 1999, the Company purchased 1,056,200 shares of its common stock
from Astoria Capital Partners, L.P., Montavilla Partners, L.P., and MicroCap
Partners L.P. ("Sellers") for a purchase price of $5.125 per share or an
aggregate purchase price of $5,413,025. The shares purchased from the Sellers
represented 26.7% of the outstanding common stock of the Company, prior to the
transaction. The purchase price was financed by the Company through a term loan
with a bank.

Note 5 - Restaurant Acquisitions and Dispositions

In February 1998, the Company sold substantially all of the assets, including
real estate, comprising three Casa Lupita restaurants 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. 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.

In March 1998, the Company acquired a Garcia's Mexican Restaurant from Famous
Restaurants, Inc. ("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.

                                       8
<PAGE>   9

In July 1998, the Company acquired all of the outstanding common stock of O.E.,
Inc. for a cash purchase price of $107,000. O.E., Inc. owns and operates three
Garfield's Restaurant & Pub locations in Oklahoma. The acquisition has been
accounted for under the purchase method. Pro forma operating results for the
thirteen week period ended March 29, 1998, assuming that the acquisition had
been made at the beginning of fiscal year 1998, would not be materially
different than the results reported.



Note 6 - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share ("EPS"):

<TABLE>
<CAPTION>
                                                                               Thirteen Weeks Ended
                                                                          ------------------------------
                                                                             March 28,        March 29,
                                                                               1999             1998
                                                                          -------------    -------------
<S>                                                                       <C>              <C>
        Numerator:
              Net income .............................................    $     246,925    $     534,272
                                                                          =============    =============

        Denominator:
              Denominator for basic EPS- weighted average shares
                outstanding
                                                                              3,518,991        3,898,406

              Dilutive effect of nonqualified stock options ..........          206,390
                                                                                                 218,253
                                                                          -------------    -------------

                Denominator for diluted EPS ..........................        3,725,381        4,116,659
                                                                          =============    =============

        Basic EPS ....................................................    $        0.07    $        0.14
                                                                          =============    =============

        Diluted EPS ..................................................    $        0.07    $        0.13
                                                                          =============    =============
</TABLE>

Note 7 - New Accounting Standards

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 


                                       9
<PAGE>   10
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 28, 1999, the Company owned and operated 65 (48 Garfield's, 14
Garcia's, two Pepperoni Grills and one Carlos Murphy's) and franchised eight
(six Garfield's and two Garcia's) restaurants. Subsequent to March 28, 1999,
the Company closed one under-performing Garfield's. The Company currently has
three new Garfield's in development. As of the date of this report, the entire
system includes 72 restaurants of which 64 are Company-owned (47 Garfield's, 14
Garcia's, one Carlos Murphy's, and two Pepperoni Grills) and eight are
franchised (six Garfield's and two Garcia's).

In February 1998, the Company sold substantially all of the assets, including
real estate, comprising three Casa Lupita restaurants 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. 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.

The decision to sell the four Casa Lupita locations was the result of a plan to
consolidate the Company's Mexican food 

                                      11
<PAGE>   12

operations and focus on the expansion of Garcia's. During 1998, the Company
converted one Carlos Murphy's location 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 28,      March 29,
                                                    1999           1998
                                                 ----------     ----------
<S>                                              <C>            <C>  
Statements of Income Data:
Revenues:
     Food and beverage sales ................          99.3%          98.4%
     Franchise fees and royalties ...........           0.3%           0.5%
     Other income ...........................           0.4%           1.1%
                                                 ----------     ----------
                                                      100.0%         100.0%
Costs and Expenses:
     Costs of sales (1) .....................          27.4%          27.4%
     Operating expenses (1) .................          60.8%          60.4%
     Pre-opening costs (1) ..................           0.4%           0.6%
     General and administrative .............           6.2%           6.2%
     Depreciation and amortization (1) ......           3.7%           3.2%
     Interest expense .......................           0.6%           0.6%
                                                 ----------     ----------
                                                       98.5%          96.8%
                                                 ----------     ----------

Income before income taxes ..................           1.5%           3.2%

Provision for income taxes ..................           0.4%           1.0%
                                                 ----------     ----------

Net income ..................................           1.1%           2.2%
                                                 ==========     ==========

Selected Operating Data:
(Dollars in thousands)
System-wide sales:
     Company restaurants ....................    $   22,904     $   23,133
     Franchise restaurants ..................         2,217          2,925
                                                 ----------     ----------
          Total .............................    $   25,121     $   26,058
                                                 ==========     ==========
Number of restaurants (at end of period):
     Company restaurants ....................            65             62
     Franchise restaurants ..................             8             11
                                                 ----------     ----------
          Total .............................            73             73
                                                 ==========     ==========
</TABLE>

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


RESULTS OF OPERATIONS

For the quarter ended March 28, 1999, the Company recorded net income of
$247,000 ($0.07 per common share; $0.07 per common 

                                      12
<PAGE>   13

share assuming dilution) on revenues of $23,074,000. This compares to net
income of $534,000 ($0.14 per common share; $0.13 per common share assuming
dilution) for the quarter ended March 29, 1998 on revenues of $23,500,000.

REVENUES

Company revenues for the quarter ended March 28, 1999 decreased 2% versus the
revenues reported for the same period in 1998. This decrease is primarily
attributable to the sale of four Casa Lupita locations in February and May
1998. The number of Company restaurants operating at the end of each quarter
and the number of operating months during that quarter are as follows:

<TABLE>
<CAPTION>
                                   Number 
           Period                    of                   Number of                    Average Monthly
           Ended                  Units Open           Operating Months                 Sales Per Unit
---------------------------    ---------------    -------------------------     -----------------------------
<S>                            <C>                <C>                           <C>
Garfield's (1)
  March 28, 1999                            50                          150                          $109,000
  March 29, 1998                            46                          136                           113,300

Garcia's (2)
  March 28, 1999                            14                           41                          $159,600
  March 29, 1998                            16                           48                           161,000
</TABLE>

(1)  Includes Pepperoni Grill.

(2)  Includes Carlos Murphy's and Casa Lupita; excludes the Garcia's concession
     operation at BankOne Ball Park in Phoenix, Arizona.

Average monthly sales per unit for Garfield's decreased by $4,300 or 3.8%
during the first quarter of 1999 versus 1998. This decrease is primarily
attributable to increased competition in certain markets, partially offset by
increased sales in other markets.

Average monthly sales per unit for Garcia's decreased by $1,400 or 0.9%. This
decrease is primarily due to sales decreases in the Phoenix, Arizona market
resulting from a vendor contaminated food product problem and the related
negative publicity.

Franchise fees and continuing royalties decreased to $68,000 during the quarter
ended March 28, 1999, versus $107,000 during the quarter ended March 29, 1998.
This decrease 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. No new franchised restaurants were opened during the quarter ended
March 28, 1999.

Other income for the quarter ended March 28, 1999 was $102,000 as compared to
the previous year's amount of $261,000. 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


                                       13
<PAGE>   14

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.

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 29,   
                                               1999           1998      
                                            ----------     ----------   
               <S>                          <C>            <C>          
               Garfield's (1):                                          
                 Costs of sales ........          27.9%          28.3%  
                                                                        
                 Labor costs ...........          28.3%          28.5%  
                                            ----------     ----------   
                                                                        
                   Total ...............          56.2%          56.8%  
                                            ==========     ==========   
                                                                        
               Garcia's (2):                                            
                 Costs of sales ........          26.0%          25.4%  
                                                                        
                 Labor costs ...........          28.3%          29.6%  
                                            ----------     ----------   
                                                                        
                   Total ...............          54.3%          55.0%  
                                            ==========     ==========   
                                                                        
               Total Company:                                           
                 Costs of sales ........          27.4%          27.4%  
                                                                        
                 Labor costs ...........          28.3%          28.9%  
                                            ----------     ----------   
                                                                        
                   Total ...............          55.7%          56.3%  
                                            ==========     ==========   
</TABLE>       

               (1)  Includes Pepperoni Grill.

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

Costs of sales as a percentage of food and beverage sales for Garfield's
decreased to 27.9% in the quarter ended March 28, 1999 versus 28.3% in the
quarter ended March 29, 1998. This decrease primarily relates to continued menu
development, increased vendor rebates and continued improvements in store-level
food and beverage cost controls.

Garcia's costs of sales as a percentage of food and beverage sales increased to
26.0% in the quarter ended March 28, 1999 versus 25.4% in the quarter ended
March 29, 1998.

Labor costs for Garfield's decreased to 28.3% of food and beverage sales during
the quarter ended March 28, 1999, versus 28.5% during the 1998 comparable
period.


                                      14
<PAGE>   15

Garcia's labor costs decreased to 28.3% of food and beverage sales during the
quarter ended March 28, 1999, versus 29.6% in the quarter ended March 29, 1998.

For the quarter ended March 28, 1999, operating expenses as a percentage of
food and beverage sales increased to 60.8% from 60.4% in the quarter ended
March 29, 1998. This increase principally relates to increased advertising,
marketing and occupancy costs during the quarter ended March 28, 1999,
partially offset by decreased labor costs in Garfield's and Garcia's.

Restaurant pre-opening costs, which are expensed as incurred, were $99,000 in
the quarter ended March 28, 1999 (0.4% of food and beverage sales) versus
$131,000 (0.6% of food and beverage sales) in the comparable period in 1998. One
restaurant was opened in the first quarter of both 1998 and 1999.

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.

In April 1998, the American Institute of Certified Public Accountants ("AICPA")
issued Statement of Position ("SOP") No. 98-5, "Reporting on the Costs of
Start-up Activities," which requires start-up costs to be expensed as incurred.
SOP No. 98-5 is effective for fiscal years beginning after December 15, 1998.
The adoption of SOP No. 98-5 did not have a material effect on the Company's
financial position or the results of its operations, as the prescribed
accounting treatment is consistent with the Company's existing accounting policy
regarding pre-opening costs.

During the quarters ended March 28, 1999 and March 29, 1998, general and
administrative costs as a percentage of total revenues were 6.2%.

Depreciation and amortization expense increased during the first quarter of
1999 to $843,000 (3.7% of food and beverage sales) compared to $729,000 (3.2%
of food and beverage sales) in 1998. The increase primarily relates to the
increase in net assets subject to depreciation and amortization in 1999 versus
1998 because of the opening or acquisition of new restaurants, the remodel of
existing restaurants, and the installation of new point-of-sale register
systems in most Garcia's locations and certain Garfield's locations since March
29, 1998.

Interest expense during the first quarter of 1999 was $146,000 (0.6% of total
revenues) versus $140,000 (0.6% of total revenues) in the first quarter of
1998.


                                      15
<PAGE>   16

INCOME TAXES

The Company's provision for income taxes was $104,000 during the first quarter
of 1999 versus $224,000 during 1998. The effective tax rate for the Company
during the first quarter of 1999 was 29.6% versus 29.5% during the previous
year's first quarter.

EARNINGS PER SHARE AMOUNTS

Basic earnings per share ("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 shares
outstanding for the basic EPS calculation were 3,518,991 and 3,898,406 in the
quarters ended March 28, 1999 and March 29, 1998, 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 3,725,381 and
4,116,659 for the quarters ended March 28, 1999 and March 29, 1998,
respectively.

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 28, 1999, the Company's current ratio was 0.85 to 1 compared to 0.63 to
1 at December 27, 1998. The Company's working capital was $(1,386,000) at March
28, 1999 versus $(3,360,000) at December 27, 1998. 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 

                                      16
<PAGE>   17

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 28, 1999, the Company had net cash provided by
operating activities of $584,000 as compared to net cash used in operating
activities of $(296,000) during the comparable 1998 period.

The Company plans to open up to six units during 1999 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 1999.

In November 1997, the Company entered into a loan agreement with a bank. This
loan agreement provided 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. In February 1999,
the Company entered into a new credit facility with a bank in the aggregate
amount of $14,600,000, of which a maximum of $6,000,000 is available to the
Company under a revolving line of credit and $8,600,000 was available to the
Company under a term loan. Certain proceeds of the term loan (approximately $5.4
million) were used to repurchase 1,056,200 shares of the Company's common stock
(transaction described below). The balance of the proceeds under the term loan
(approximately $3.2 million) and the initial proceeds under the revolving line
of credit were used to retire indebtedness under the Company's existing loan
agreement. As of March 28, 199, the Company had outstanding borrowings of
approximately $8,559,000 under the term loan feature and approximately
$3,066,000 of outstanding borrowings under the revolving line of credit.
Outstanding borrowings under both the revolving line of credit and term loan
bear interest at three-month LIBOR plus 1.50% (6.50% as of March 28, 1999). The
interest rate is reset quarterly. There is no non-use fee related to either
facility. The revolving line of credit has a two-year term with final maturity
in February 2001. 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 February
2004. The term loan converts to a five-year amortization schedule if the
Company's debt coverage ratio, as defined in the loan agreement, exceeds a
certain level. Also, the floating interest rate on both facilities is subject to
changes in the Company's ratio of total loans and capital leases to net worth.
Under the terms of these notes, the Company's minimum floating rate is
three-month LIBOR plus 1.25% and the maximum floating rate is three-month LIBOR
plus 1.75%. Borrowings under this loan agreement are unsecured. The loan

                                      17


<PAGE>   18
agreement does contain certain financial covenants and restrictions. As of the
date of this report, the Company is in compliance with these 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%.

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 28, 1999, 130,262
shares had been repurchased under this plan for a total purchase price of
approximately $556,000. No additional shares have been repurchased subsequent
to March 28, 1999.

In February 1999, the Company purchased 1,056,200 shares of its common stock
from Astoria Capital Partners, L.P., Montavilla Partners, L.P., and MicroCap
Partners L.P. ("Sellers") for a purchase price of $5.125 per share or an
aggregate purchase price of $5,413,025. The shares purchased from the Sellers
represented 26.7% of the outstanding common stock of the Company, prior to the
transaction. The purchase price of these shares were financed through a term
loan with a bank (described above).

YEAR 2000

         The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of the
Company's computer programs or hardware that have date-sensitive or embedded
computer chips may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or miscalculations which could
disrupt the Company's normal business activities.

         The Company has completed its initial assessment of the year 2000
compliance issue. The assessment was conducted reviewing internal and external
year 2000 compliance issues. Based on the assessments, the Company has developed
a plan to prepare for the year 2000 issue. The plan involves: 1. Review of
hardware and software systems for compliance, 2. Replacement, remediation or
modification of non compliant systems, 3. Testing existing,

                                      18
<PAGE>   19
 replaced, remediated or modified systems to confirm compliance, and 4.
Implementation.

         The Company has determined, based on its assessment that a substantial
amount of software and hardware used internally will require modification or
replacement. The Company believes that with modifications and replacements of
software and hardware systems currently identified, the risk associated with
the year 2000 issue can be mitigated. If the modifications and replacements of
critical hardware and software systems used by the Company were not completed
timely, the year 2000 issue could have a material impact on the operations of
the Company.

         In addition to assessing internal year 2000 compliance, the Company is
continuing to gather information pertaining to key third parties conducting
business with the Company and their year 2000 compliance status.

         As of March 28, 1999, the Company is in excess of 70% complete on the
modification and remediation of existing software and hardware. Completion of
modification and remediation is expected by May 31, 1999. Testing of these
systems is expected to be complete by June 30, 1999. These internal systems
relate primarily to financial and management information systems.

         The Company's non-informational technology systems consist primarily
of restaurant operating equipment including its point-of-sale systems. The
assessment of these systems has indicated that 90% of the systems are year 2000
compliant. The Company plans to replace the non-compliant point-of-sale systems
prior to year end 1999. While the Company believes that 90% of the
non-information systems are year 2000 compliant, it plans to continue testing
its operating equipment and expects to complete testing by June 30, 1999.

         The Company's significant third party business partners consists
principally of suppliers, banks, and its franchisees. The Company does not have
any material or significant systems interfaces with third parties. An initial
inventory of significant third parties has been completed and information
requests regarding year 2000 compliance have been sent. The Company is
developing contingency plans by June 30, 1999 for any significant third parties
that appear to be year 2000 non-compliant.

         The Company is using internal and external sources to review and
identify, remediate, test and implement systems for year 2000 readiness. The
cost of the year 2000 compliance, excluding internal personnel costs, as of
December 26, 1999 are estimated to be approximately $365,000 of which
approximately $350,000 are capitalized as equipment and software. The Company
estimates that an additional $175,000, exclusive of internal personnel costs,
will be spent before December 1999 on year 2000 compliance

                                      19
<PAGE>   20
of which approximately $150,000 is estimated to be capitalized equipment and
software.

         The Company believes it has in place a plan that will resolve its year
2000 issue in a timely manner. Due to the forward looking nature and lack of
historical experience with year 2000 issues however, it is difficult to predict
with certainty the results of year 2000 compliance issues after December 31,
1999. It is likely, despite the Company's efforts, that there will be
disruptions and unexpected business problems during the year 2000. In addition,
despite the Company's efforts it may experience unanticipated third party
failures, general public infrastructure failures and or failures to
successfully conclude its remediation efforts as planned. The Company may be
required to utilize manual processing of certain otherwise automated processes
primarily related to payroll and cash management. Any of these unforeseen
events could have a material adverse impact on the Company's results of
operations, financial condition, and or cash flows in 1999 and beyond. The
amount of potential loss cannot be reasonably estimated at this time.


                                      20
<PAGE>   21

                                    PART II

                               OTHER INFORMATION










                                      21
<PAGE>   22

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

(a)       Exhibit 27.1 - Financial Data Schedule.

          A Form 8-K was filed on March 3, 1999, with the Securities and
          Exchange Commission ("SEC") regarding the Registrant's purchase of
          1,056,200 shares of its outstanding common stock and the related
          financing.


                                      22
<PAGE>   23

                                   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 10, 1999                  By: /s/ BRADLEY L. GROW      
                                         ---------------------------------
                                         Bradley L. Grow
                                         Vice President
                                         Chief Financial Officer

                                      23

<PAGE>   24

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number          Description
-------         -----------
<S>             <C>
 27.1           Financial Data Schedule.
</TABLE>