--------------------------------------------------------------------------------
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                           ---------------------------


                                    FORM 10-Q


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

                  For the quarterly period ended April 3, 1999

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

                  For the transition period from                   to 
                                                 -------             -------
                  Commission file number:        0-23633         
                                                 -------
                              1-800 CONTACTS, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                                     87-0571643
---------------------------------------     ------------------------------------
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
  incorporation or organization)

 66 E. Wadsworth Park Drive, 3rd Floor
             Draper, UT                                       84020
----------------------------------------------   -------------------------------
   (Address of principal executive offices)                 (Zip Code)

                                 (801) 924-9800
             ------------------------------------------------------
              (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

         As of May 18,  1999,  the  Registrant  has  6,282,364  shares of Common
Stock, par value $0.01 per share outstanding.

--------------------------------------------------------------------------------
                             


<PAGE>
                                1-800 CONTACTS, INC.

                                      INDEX

<TABLE>
<CAPTION>

                                                                                            Page No.
                                                                                            --------
PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
<S>                                               <C>                
             Condensed Balance Sheets as of April 3, 1999 (unaudited)
                  and January 2, 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
             Condensed Statements of Operations for the Quarters Ended
                  April 3, 1999 and April 4, 1998 (unaudited). . . . . . . . . . . . . . . . . .4
             Condensed Statement of Stockholders' Equity for the Quarter Ended
                  April 3, 1999 (unaudited)  . . . . . . . . . . . . . . . . . . . . . . . . . .5
             Condensed Statements of Cash Flows for the Quarters Ended
                  April 3, 1999 and April 4, 1998 (unaudited). . . . . . . . . . . . . . . . . .6
             Notes to Condensed Financial Statements . . . . . . . . . . . . . . . . . . . . . .8
Item 2.      Management's Discussion and Analysis of Financial Condition
                  and Results of Operation. . . . . . . . . . . . . . . . . . . . . . . . . . .11
Item 3.      Quantitative and Qualitative Disclosure About Market Risk. . . . . . . . . . . . .15

PART II.  OTHER INFORMATION
Item 1.      Legal Proceedings . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Item 2.      Changes in Securities and Use of Proceeds . . . . . . .. . . . . . . . . . . . . .16
Item 3.      Defaults upon Senior Securities . . . . . . . . . . . . . . . . . . . . . .. . . .16
Item 4.      Submission of Matters to a Vote of Security Holders  . . . . . . . . . . . . . . .16
Item 5.      Other Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Item 6.      Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . .16
</TABLE>


                                       
<PAGE>
PART I.   FINANCIAL INFORMATION

Item 1.     Financial Statements
<TABLE>

                              1-800 CONTACTS, INC.
                            CONDENSED BALANCE SHEETS

                                     ASSETS
<CAPTION>

                                                                               April 3,              January 2,
                                                                                1999                    1999
                                                                      ------------------     ------------------
                                                                         (Unaudited)
<S>                                                                         <C>                    <C>        
CURRENT ASSETS:
     Cash and cash equivalents                                              $ 8,596,048            $ 3,762,220
     Inventories                                                             10,585,667             10,752,324
     Other current assets                                                       287,388                483,139
                                                                      ------------------     ------------------
        Total current assets                                                 19,469,103             14,997,683
DEFERRED ADVERTISING COSTS                                                            -                175,631
PROPERTY AND EQUIPMENT, net                                                   2,344,296              2,048,850
DEFERRED INCOME TAXES                                                           460,466                642,679
OTHER ASSETS                                                                    164,323                151,293
                                                                      ------------------     ------------------
        Total assets                                                       $ 22,438,188           $ 18,016,136
                                                                      ==================     ==================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Current portion of capital lease obligation                               $ 37,685               $ 36,712
     Accounts payable                                                         7,013,140              2,056,451
     Accrued liabilities                                                      1,617,283                890,443
     Unearned revenue                                                           428,971                169,540
                                                                      ------------------     ------------------
        Total current liabilities                                             9,097,079              3,153,146
                                                                      ------------------     ------------------
CAPITAL LEASE OBLIGATION, less current portion                                   20,371                 30,165
                                                                      ------------------     ------------------
STOCKHOLDERS' EQUITY:
     Common stock                                                                64,306                 64,306
     Additional paid-in capital                                              23,009,439             23,017,266
     Accumulated deficit                                                     (7,891,895)            (8,189,072)
     Treasury stock                                                          (1,861,112)               (59,675)
                                                                      ------------------     ------------------
        Total stockholders' equity                                           13,320,738             14,832,825
                                                                      ------------------     ------------------
        Total liabilities and stockholders' equity                         $ 22,438,188           $ 18,016,136
                                                                      ==================     ==================
</TABLE>


            The accompanying notes to condensed financial statements
               are an integral part of these condensed statements.
  
                                       3
<PAGE>

<TABLE>
                              1-800 CONTACTS, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<CAPTION>

                                                                                    Quarter Ended
                                                                       --------------------------------------
                                                                              April 3,             April 4,
                                                                                1999                 1998
                                                                       -----------------    -----------------
<S>                                                                        <C>                  <C>         
NET SALES                                                                  $ 22,304,257         $ 10,429,304
COST OF GOODS SOLD                                                           13,909,147            6,628,913
                                                                       -----------------    -----------------
     Gross profit                                                             8,395,110            3,800,391
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                                  8,000,105            3,137,926
                                                                       -----------------    -----------------
INCOME FROM OPERATIONS                                                          395,005              662,465
                                                                       -----------------    -----------------
OTHER INCOME (EXPENSE):
     Interest expense                                                            (1,844)             (73,633)
     Interest income                                                             86,229              143,869
     Other, net                                                                       -               10,000
                                                                       -----------------    -----------------
        Total other, net                                                         84,385               80,236
                                                                       -----------------    -----------------
INCOME BEFORE PROVISION FOR INCOME TAXES                                        479,390              742,701
PROVISION FOR INCOME TAXES                                                     (182,213)            (953,908)
                                                                       -----------------    -----------------
NET INCOME (LOSS)                                                             $ 297,177           $ (211,207)
                                                                       =================    =================

PER SHARE INFORMATION:
     Basic and diluted net income (loss) per common share                        $ 0.05              $ (0.04)
                                                                       =================    =================

PRO FORMA INFORMATION:
     Income before provision for income taxes                                   479,390              742,701
     Provision for income taxes                                                (182,213)            (278,337)
                                                                       -----------------    -----------------
     Net income                                                               $ 297,177            $ 464,364
                                                                       =================    =================

     Basic and diluted net income per common share                               $ 0.05               $ 0.08
                                                                       =================    =================
</TABLE>


            The accompanying notes to condensed financial statements
               are an integral part of these condensed statements.
         
 
                                       4
<PAGE>


<TABLE>

                              1-800 CONTACTS, INC.
                   CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
                       For the Quarter Ended April 3, 1999
                                   (Unaudited)
<CAPTION>

                                                       
                                     Common Stock     Additional                      Treasury Stock
                                ----------------------  Paid-In    Accumulated  -------------------------
                                 Shares     Amount      Capital      Deficit       Shares         Amount            Total
                                ---------  ---------  ------------ ------------ ------------  ------------       -----------
<S>                             <C>       <C>        <C>          <C>              <C>        <C>              <C>         
BALANCE, January 2, 1999        6,430,568 $ 64,306   $ 23,017,266 $ (8,189,072)    (11,000)   $    (59,675)    $ 14,832,825
  Purchase of treasury shares       -          -            -            -        (155,000)     (1,860,005)      (1,860,005)
  Exercise of common stock options  -          -           (7,827)       -          10,796          58,568           50,741
  Net income                        -          -            -          297,177         -              -             297,177
                                ---------  ---------  ------------ ------------ ------------  ------------       -----------
BALANCE, April 3, 1999          6,430,568 $ 64,306   $ 23,009,439 $ (7,891,895)   (155,204)   $ (1,861,112)    $ 13,320,738
                                =========  =========  ============ ============ ============  ============       ===========
</TABLE>
            The accompanying notes to condensed financial statements
               are an integral part of these condensed statements.


                                       5
<PAGE>

<TABLE>
                              1-800 CONTACTS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<CAPTION>

                Increase (Decrease) In Cash and Cash Equivalents

                                                                                                Quarter Ended
                                                                                  ---------------------------------------
                                                                                         April 3,              April 4,
                                                                                           1999                  1998
                                                                                  -----------------    ------------------
<S>                                                                                      <C>                  <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                                                   $ 297,177            $ (211,207)
     Adjustments to reconcile net income (loss) to net cash
        provided by (used in) operating activities:
     Depreciation and amortization                                                         156,905                63,536
     Deferred income taxes                                                                 182,213               953,908
     Changes in operating assets and liabilities:
        Inventories                                                                        166,657              (663,251)
        Other current assets                                                               195,751            (1,261,233)
        Deferred advertising costs                                                         175,631            (1,562,536)
        Accounts payable                                                                 4,956,689               465,959
        Accrued liabilities                                                                726,840               255,520
        Unearned revenue                                                                   259,431                56,625
                                                                                  -----------------    ------------------
            Net cash provided by (used in) operating activities                          7,117,294            (1,902,679)
                                                                                  -----------------    ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Net increase in notes receivable from stockholders                                          -               (27,544)
     Purchase of property and equipment                                                   (443,202)             (131,030)
     Purchase of intangible assets                                                         (19,600)                    -
     Deposits                                                                               (2,579)             (287,396)
                                                                                  -----------------    ------------------
            Net cash used in investing activities                                         (465,381)             (445,970)
                                                                                  -----------------    ------------------
</TABLE>


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

                                       6
<PAGE>

<TABLE>
                              1-800 CONTACTS, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<CAPTION>

                Increase (Decrease) In Cash and Cash Equivalents


                                                                                                Quarter Ended
                                                                                  ---------------------------------------
                                                                                         April 3,              April 4,
                                                                                           1999                  1998
                                                                                  -----------------    ------------------

<S>                                                                                     <C>                     <C>       
CASH FLOWS FROM FINANCING ACTIVITIES:
     Sale of common stock, net of underwriting discounts and commissions                         -            25,734,844
     Common stock offering costs                                                                 -              (563,733)
     Common stock repurchases                                                           (1,860,005)           (1,900,000)
     Proceeds from exercise of common stock options                                         50,741                     -
     Net repayments on line of credit                                                            -            (1,055,640)
     Principal payments on notes payable to stockholders                                         -            (1,613,788)
     Principal payments on notes payable for distributions to stockholders, net                  -              (982,995)
     Principal payments on capital lease obligation                                         (8,821)               (5,172)
                                                                                  -----------------    ------------------
            Net cash (used in) provided by financing activities                         (1,818,085)           19,613,516
                                                                                  -----------------    ------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                4,833,828            17,264,867
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                         3,762,220                     -
                                                                                  -----------------    ------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                             $ 8,596,048          $ 17,264,867
                                                                                  =================    ==================

SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid for interest                                                            $     3,320          $    199,645
</TABLE>

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

During the period ended April 4, 1998, the Company distributed $1,582,684 to its
S Corporation  stockholders.  This  distribution  (net of notes  receivable from
stockholders  of  $599,689)  was in  the  form  of  promissory  notes,  totaling
$982,995,  issued by the Company.  The promissory notes were paid in full during
the period ended April 4, 1998.


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


                                       7
<PAGE>

                              1-800 CONTACTS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1.  PRESENTATION OF CONDENSED FINANCIAL STATEMENTS

         The accompanying  condensed financial  statements have been prepared by
the  Company,  without  audit,  pursuant  to the  rules and  regulations  of the
Securities and Exchange Commission. Certain information and disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations.  These  condensed  financial  statements  reflect  all  adjustments
(consisting  only of normal  recurring  adjustments),  which in the  opinion  of
management,  are  necessary to present  fairly the results of  operations of the
Company  for  the  periods  presented.  It is  suggested  that  these  condensed
financial  statements be read in conjunction  with the financial  statements and
the notes thereto  included in the Company's  Annual Report to  Shareholders  on
Form 10-K.

         The results of  operations  for the period  ended April 3, 1999 are not
necessarily indicative of the results to be expected for the full year.

NOTE 2.  CHANGE IN ACCOUNTING PERIOD

         Effective January 1, 1998, the Company changed from a calendar year end
to a 52/53 week year ending on the Saturday  nearest to December 31. Due to this
change,  the first quarter of 1998 represents 13 weeks and 3 days,  covering the
period January 1, 1998 to April 4, 1998.

NOTE 3.  INCOME TAXES AND PRO FORMA INFORMATION

         Effective  February 9, 1998 the  Company's S  Corporation  election was
terminated.  As a result,  the Company recorded a net deferred tax liability and
the related deferred tax provision of approximately  $791,000 for the tax effect
of the differences  between  financial  statement and income tax basis of assets
and  liabilities  that  existed  at the  termination  date of the S  Corporation
election.

         The pro forma net income  presents the pro forma  effects on historical
net income  adjusted for a pro forma  provision for income taxes.  The pro forma
provision  for income  taxes has been  determined  assuming the Company had been
taxed as a C Corporation for federal and state income tax purposes.

NOTE 4.  ADVERTISING COSTS

         Prior to the fourth  quarter of fiscal  1998,  the Company  capitalized
certain direct-mail  advertising costs and amortized those costs over the period
for which the revenues were  generated in accordance  with Statement of Position
("SOP") 93-7.  Based upon the Company's past  direct-response  information,  the
Company capitalized  direct-mail  advertising costs on a  cost-pool-by-cost-pool
approach and amortized those costs over a 12 month period,  which was the period
during which the future benefits were expected to be received.  Approximately 73
percent of capitalized  costs were amortized over the first six months after the
advertisement.   Accordingly,  deferred  advertising  costs  were  amortized  in
proportion to the expected future benefits to be received.  The Company expensed
all other advertising costs when the advertising first occurred.

         During 1998, the Company began  utilizing a variety of new  advertising
vehicles,  including  new  print  vehicles,  Internet  and radio  spots,  and an
extensive television marketing campaign.  As direct-response  information became
available  during the fourth  quarter of 1998, the Company  determined  that its
ability  to  track  individual  sales  to  specific  advertising  campaigns  was
restricted  as a result of the  variety of new  advertising  vehicles  utilized.
Therefore,  beginning in the fourth quarter of 1998, the Company began expensing
all advertising  costs,  including all direct-mail  advertising  costs, when the
advertising  first takes place.  The Company also determined that for previously

                                       8
<PAGE>

deferred  advertising  costs the period  during which the future  benefits  were
expected to be received was shortened and  accordingly  amortized the balance at
the beginning of the fourth quarter of 1998 over 5 months.

         The  Company  recorded  total  advertising   expense  of  approximately
$5,410,000  and  $2,003,000  for the  quarters  ended April 3, 1999 and April 4,
1998, respectively.

NOTE 5.  NET INCOME PER COMMON SHARE

         Basic net income per common share ("Basic EPS")  excludes  dilution and
is computed  by dividing  net income  (loss) by the  weighted-average  number of
common  shares  outstanding  during the period.  Diluted  net income  (loss) per
common share ("Diluted EPS") reflects the potential dilution that could occur if
stock options or other common stock equivalents were exercised or converted into
common  stock.  The  computation  of  Diluted  EPS does not assume  exercise  or
conversion of securities  that would have an  antidilutive  effect on net income
(loss) per common share.

         The pro forma Basic and Diluted EPS for the quarter ended April 4, 1998
gives effect to the pro forma  effects on historical  net income  adjusted for a
pro forma  provision for income taxes assuming the Company had been taxed as a C
Corporation for federal and state income tax purposes.

         The following is a reconciliation of the numerator and denominator used
to calculate Basic and Diluted EPS:
<TABLE>
<CAPTION>
                               Quarter Ended April 3, 1999                   Quarter Ended April 4, 1998     
                           ------------------------------------       ---------------------------------------
                             Income                   Per-Share          Income                   Per-Share
                             (Loss)       Shares        Amount           (Loss)       Shares        Amount
                          ------------- ------------ -------------    ------------- ------------ -------------
<S>                         <C>           <C>         <C>              <C>          <C>           <C>        
Historical:
  Basic EPS                 $  297,177    6,381,547   $      0.05      $ (211,207)  5,649,263     $    (0.04)
  Effect of stock options                    37,995 
                          ------------- ------------ -------------    ------------- ------------ -------------
  Diluted EPS               $  297,177    6,419,542   $      0.05      $ (211,207)  5,649,263     $    (0.04)
                          ============= ============ =============    ============= ============ =============

Pro Forma:
  Basic EPS                 $  297,177    6,381,547   $      0.05      $  464,364   5,649,263     $     0.08          
  Effect of stock options                    37,995                                    59,422
                          ------------- ------------ -------------    ------------- ------------ -------------
   Diluted EPS              $  297,177    6,419,542   $      0.05      $  464,364   5,708,685     $     0.08
                          ============= ============ =============    ============= ============ =============
</TABLE>

NOTE 6.  COMMON STOCK TRANSACTIONS

         During the quarter ended April 3, 1999, the Company repurchased a total
of 155,000 shares of its common stock for a total cost,  including  commissions,
of $1,860,005.

         During the quarter  ended April 3, 1999,  an employee  exercised  stock
options to purchase 10,796 shares of common stock at $4.70 per share for a total
of $50,741.

NOTE 7.  STOCK OPTION GRANTS

         In February 1999,  the Company  granted  nonqualified  stock options to
purchase  54,700  shares of common stock at $12.5625 per share to employees  and
Directors of the  Company.  The options vest over a three year period and expire
in ten years.

NOTE 8.  ASSET ACQUISITION

         Subsequent  to the first  quarter of 1999,  the  Company  acquired  the
assets of Contact  Lenses  Online,  Inc.  ("CLO") for $1.2 million in cash to be
paid as follows:  $600,000 on the closing  date,  $300,000  six months after the
closing date and $300,000 one year after the closing date.  The assets  acquired
include the web address  www.contactlenses.com,  various  telephone  numbers and
CLO's customer database.


                                       9
<PAGE>



NOTE 9.  LEGAL MATTERS

         On July 14, 1998, Craig S. Steinberg,  O.D., a professional corporation
d.b.a. City Eyes Optometry  Center,  filed a purported class action on behalf of
all optometrists  licensed to practice in California against the Company and its
directors in Los Angeles County Superior Court (the "Steinberg Complaint").  The
complaint alleges three separate  causes of action for unfair  competition:  (i)
selling contact lenses to California  residents without being  registered,  (ii)
selling   contact  lenses  to  California   residents   without   verifying  the
prescription,  and (iii)  failing to disclose in its  advertising  that it sells
"sample"  lenses not intended  for sale to the public.  The  complaint  requests
various forms of relief, including damages of an unspecified amount,  attorney's
fees and a permanent  injunction  to prevent the Company  from  selling  contact
lenses to California  residents  without being registered and without  verifying
the  prescription  as well as from selling  sample  contact lenses to California
residents.  In  addition,  the  plaintiff  has  filed a motion  for  preliminary
injunction  seeking the injunctive relief requested in the complaint.  On August
11, 1998, the Company removed the action to the United States District Court for
the Central District of California based on diversity jurisdiction.

         In response to motions by the Company, plaintiff and another California
optometrist,  Ellis  Miles  (collectively  "plaintiffs")  filed a First  Amended
Complaint ("FAC") against the Company and its directors on or about September 3,
1998  purporting  to sue on  behalf  of the  public  under  California's  unfair
competition  statute  rather than as a class  action on behalf of  optometrists.
Although the substantive  claims for unfair competition remain the same, the FAC
seeks restitutionary  relief rather than damages.  Plaintiffs also stipulated to
dismiss the Company's  directors as defendants  rather than oppose the Company's
motion to dismiss them, leaving the Company as the only remaining defendant.

         On October 2, 1998,  plaintiffs  re-filed their motion for  preliminary
injunction  in federal  court.  The  Company  likewise  filed a motion to strike
plaintiff's  claims for monetary  relief.  Plaintiffs  withdrew their motion for
preliminary  injunction  on  October  19,  1998,  after  the  Company  filed its
opposition  to the motion  indicating,  inter  alia,  that the  Company had been
registered as a Nonresident Contact Lens Seller in California.  The Court denied
the  Company's  motion to  strike  plaintiffs'  claims  for  monetary  relief on
February 26, 1999.  The Company filed its Answer to the First Amended  Complaint
on March 11, 1999.

         On May 7, 1999 the Kansas Board of  Examiners in Optometry  commenced a
civil action against the Company.  The action was filed in the District Court of
Shawnee County,  Kansas  Division 6. The complaint  alleges that on "one or more
occasions" the Company sold contact lenses without  receipt or verification of a
prescription.  The relief  requested is the issuance of an order  enjoining  the
company from further  engaging in the alleged  activity.  The complaint does not
seek monetary damage.

         The Company,  in response to the  complaint,  has retained  counsel and
intends to vigorously  defend itself in this action.  An answer to the complaint
is not presently due but will be filed in a timely manner.

         From  time to time the  Company  is  involved  in other  legal  matters
generally incidental to its business.

         It is the opinion of management,  after  discussion with legal counsel,
that the ultimate  dispositions of these matters will not have a material impact
on the financial condition, liquidity or results of operations of the Company.


                                       10
<PAGE>


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

         The Company is a rapidly growing direct marketer of replacement contact
lenses. The Company was formed in February 1995 and is the successor to the mail
order  business  founded by the Company's  Vice President of Operations in March
1991.  Since its formation,  the Company has experienced  significant  growth in
revenues.  Net sales  for the  first  quarter  of 1999  increased  114% to $22.3
million from $10.4 million in the first quarter of 1998.

         Prior  to  consummation  of its  initial  public  offering  ("IPO")  in
February 1998, the Company  operated as an S corporation  and, as a result,  had
not been subject to federal or certain  state income taxes.  In connection  with
the  consummation of the IPO, the Company  revoked its S Corporation  status and
became  subject to federal  and state  income  taxes.  As a result,  the Company
recorded a net deferred tax liability and the related  deferred tax provision of
approximately  $791,000 for the tax effect of the differences  between financial
statement  and income tax basis of assets and  liabilities  that  existed at the
termination date of the S corporation election.

         Effective January 1, 1998, the Company changed from a calendar year end
to a 52/53 week year ending on the Saturday  nearest to December 31. Due to this
change,  the first quarter of 1998 represents 13 weeks and 3 days,  covering the
period January 1, 1998 to April 4, 1998.

         During 1998, the Company began  utilizing a variety of new  advertising
vehicles,  including  new  print  vehicles,  Internet  and radio  spots,  and an
extensive television marketing campaign.  As direct-response  information became
available  during the fourth  quarter of 1998, the Company  determined  that its
ability  to  track  individual  sales  to  specific  advertising  campaigns  was
restricted  as a result of the  variety of new  advertising  vehicles  utilized.
Therefore,  beginning in the fourth quarter of 1998, the Company began expensing
all advertising  costs,  including all direct-mail  advertising  costs, when the
advertising first takes place. As a result,  quarter-to-quarter  comparisons are
impacted by the timing of television,  radio and Internet  advertisements and by
the mailing of the Company's printed advertisements within and between quarters.
The volume of mailings and other advertising may vary in different  quarters and
from  year-to-year  depending on the Company's  assessment of prevailing  market
opportunities.

         The sale and delivery of contact lenses are generally governed by state
laws and  regulations.  The Company sells to customers in all 50 states and each
sale is likely to be  subject  to the laws of the state  where the  customer  is
located.  The  Company's  operating  practice  is to  attempt  to obtain a valid
prescription from each of its customers or his/her eye care practitioner. If the
Company is unable to obtain a copy of or verify the customer's prescription, the
Company's  practice  is to  ship  the  lenses  to  the  customer,  based  on the
information  that the customer has provided.  The Company retained legal counsel
to identify and summarize the applicable laws of each of the states in which the
Company  generates  material sales.  The Company  compared its operations to the
applicable  requirements of the laws contained in such summaries.  Based on such
comparison,  the Company estimates that approximately one-third of its net sales
appeared  to  conform  to  the   requirements  of  applicable   state  laws  and
regulations.

                                       11
<PAGE>

Results of Operations

         The  following  table  presents  the  Company's  results of  operations
expressed as a percentage of net sales:
<TABLE>
<CAPTION>

                                                                      Quarter Ended             
                                                           -------------------------------------
                                                               April 3,            April 4,
                                                                 1999                1998
                                                           -----------------   -----------------
<S>                                                                  <C>                 <C>   
Net sales                                                            100.0%              100.0%
Cost of goods sold                                                    62.4                63.6
                                                           -----------------   -----------------
Gross profit                                                          37.6                36.4
Selling, general and administrative expenses                          35.9                30.1
                                                           -----------------   -----------------
Income from operations                                                 1.7                 6.3
Other income (expense), net                                            0.4                 0.8
                                                           -----------------   -----------------
Income before provision for income taxes                               2.1                 7.1
Provision for income taxes (pro forma for 1998)                       (0.8)               (2.6)
                                                           -----------------   -----------------
Pro forma net income                                                   1.3%                4.5%
                                                           =================   =================
</TABLE>

         Net sales. Net sales for the quarter ended April 3, 1999 increased 114%
from the quarter ended April 4, 1998. The Company believes that this increase in
net sales  reflects some of the benefits of the Company's  increased  television
and  Internet  advertising.  Internet  sales for the first  quarter of 1999 were
approximately $2.5 million as compared to an insignificant  amount for the first
quarter of 1998. The Company is also realizing the benefits of repeat sales from
a growing  customer  base.  Repeat sales for the first quarter of 1999 increased
174% to $10.7 million from $3.9 million for the first quarter of 1998.  Although
the Company believes that sales will increase  substantially in 1999 as compared
to 1998, the Company  expects the rate of growth to decrease in future  quarters
of 1999.

         Gross profit.  Gross profit as a percentage of sales increased to 37.6%
for the quarter  ended  April 3, 1999 from 36.4% for the quarter  ended April 4,
1998.  With the increase in sales,  the Company was able to obtain  inventory at
lower costs because of purchase volumes and more competitive  pricing  resulting
from access to more vendors.

         Selling,  general and  administrative  expenses.  Selling,  general and
administrative  expenses  for the  quarter  ended April 3, 1999  increased  $4.9
million,  or 155%,  from the quarter ended April 4, 1998. As a percentage of net
sales,  selling,  general and administrative  expenses increased to 35.9% in the
first  quarter of 1999 from 30.1% in the 1998 period.  The  increases in expense
and as a percentage  of net sales are due to the increase in sales and marketing
activity  and the related  increase in general and  administrative  expenditures
considered necessary to support the growth. Advertising as a percentage of sales
was  24.3% in the  first  quarter  of 1999 as  compared  to 19.2%  for the first
quarter of 1998.  The  Company  expects  that  advertising  spending  as well as
advertising  as a  percentage  of sales in fiscal year 1999 will be less than in
fiscal year 1998. However, if opportunities present themselves,  the Company may
increase advertising spending above currently planned levels.

         During 1998, the Company began  utilizing a variety of new  advertising
vehicles,  including  new  print  vehicles,  Internet  and radio  spots,  and an
extensive television marketing campaign.  As direct-response  information became
available  during the fourth  quarter of 1998, the Company  determined  that its
ability  to  track  individual  sales  to  specific  advertising  campaigns  was
restricted  as a result of the  variety of new  advertising  vehicles  utilized.
Therefore,  beginning in the fourth quarter of 1998, the Company began expensing
all advertising  costs,  including all direct-mail  advertising  costs, when the
advertising  first takes place.  The Company also determined that for previously
deferred  advertising  costs the period  during which the future  benefits  were
expected to be received was shortened and  accordingly  amortized the balance at
the beginning of the fourth quarter of 1998 over 5 months.

         Other income (expense),  net. Other income (expense) increased slightly
to approximately $84,000 in the first quarter of 1999 from approximately $80,000
in the first quarter of 1998. The decrease in interest  income due to lower cash
balances was offset by the decrease in interest  expense as the majority of debt
was paid off during the first quarter of 1998 with proceeds from the IPO.


                                       12
<PAGE>


         Income  taxes.  The pro forma  provision for income taxes for the first
quarter of 1998 has been  determined  assuming the Company had been taxed as a C
Corporation  for federal and state  income tax  purposes  for the  quarter.  The
Company's  future  effective tax rate will depend upon future taxable income and
changes in the valuation allowance  associated with the deferred tax assets. The
Company   anticipates  that  its  future  effective  income  tax  rate  will  be
approximately 38%.

Liquidity and Capital Resources

         The Company has historically funded its growth through a combination of
funds  generated  from  operations  and  borrowings.  During  February 1998, the
Company  completed its initial  public  offering of common stock.  In connection
therewith,  the Company issued 2,213,750 shares of common stock,  which included
288,750 shares pursuant to the underwriters' over-allotment option. The proceeds
received from the offering, net of underwriting  commissions and offering costs,
totaled  approximately  $24.9 million.  The Company uses funds to enhance growth
through increased  advertising  expenditures and to increase inventory levels in
anticipation of future sales.  In order to help ensure  sufficient  supply,  the
Company  generally  carries a higher level of inventory  than if it were able to
purchase directly from all contact lens manufacturers.

         For the  quarters  ended  April 3,  1999 and  April 4,  1998,  net cash
provided by (used in) operating  activities was  approximately  $7.1 million and
$(1.9) million, respectively. In the 1999 period, cash was provided primarily by
increases in accounts payable and accrued liabilities.  In the 1998 period, cash
was used  primarily to fund the  Company's  growth as the Company  significantly
increased inventory levels and advertising spending.

         The Company used  approximately  $465,000  and  $446,000 for  investing
activities for the quarters ended April 3, 1999 and April 4, 1998, respectively.
The majority of these amounts relate to capital  expenditures for infrastructure
improvements.  The amount related to capital  expenditures for the 1999 and 1998
periods  were  approximately  $443,000  and  $418,000  (including  approximately
$287,000 in deposits),  respectively.  The Company  began  operations in its new
distribution  center in February of 1999. This new facility is several times the
size of the prior distribution center and is strategically located near the Salt
Lake City, Utah airport. The Company anticipates additional capital expenditures
for  infrastructure as it continues to expand and improve operating  facilities,
telecommunications systems and management information systems in order to handle
future growth.

         Subsequent  to the first  quarter of 1999,  the  Company  acquired  the
assets of Contact  Lenses  Online,  Inc.  ("CLO") for $1.2 million in cash to be
paid as follows:  $600,000 on the closing  date,  $300,000  six months after the
closing date and $300,000 one year after the closing date.  The assets  acquired
include the web address  www.contactlenses.com,  various  telephone  numbers and
CLO's customer database.

         For the 1999 period,  the Company used  approximately  $1.8 million for
financing activities.  During the first quarter of 1999, the Company repurchased
a total of  155,000  shares  of its  common  stock for a total  cost,  including
commissions,  of  $1,860,005.  This was offset  slightly  by  proceeds  from the
exercise of common  stock  options.  For the 1998  period,  approximately  $19.6
million was  provided  by  financing  activities,  resulting  from net  proceeds
received from the Company's IPO, offset by repayments of debt,  distributions to
stockholders and the repurchase of stock.

         On October 13, 1998,  the  Company's  Board of  Directors  authorized a
repurchase of up to 500,000  shares of its common stock.  A purchase of the full
amount would equal approximately 7.8 percent of the 6,430,568 shares issued. The
repurchase of common stock is subject to market  conditions and is  accomplished
through  periodic  purchases at prevailing  prices on the open market,  by block
purchases or in privately negotiated  transactions.  The repurchased shares will
be retained as treasury stock to be used for corporate purposes.  The repurchase
program will be effected in accordance  with the safe harbor  provisions of Rule
10b-18.  Through April 3, 1999, the Company has repurchased 170,000 shares for a
total cost, including  commissions,  of $1,941,380.  The repurchases were funded
using cash on hand.
         In August 1997, the Company  established a revolving credit facility to
provide for working  capital  requirements  and other  corporate  purposes  (the
"Credit Facility").  The Company amended the Credit Facility in January 1998 and
October 1998. As a result,  the Credit Facility provides for borrowings equal to


                                       13
<PAGE>


the  lesser of $5.0  million or 50 percent  of  eligible  inventory.  The Credit
Facility  bears interest at a floating rate equal to the lender's prime interest
rate plus 1.5 percent (9.25 percent at April 3, 1999).  As of April 3, 1999, the
Company had no  outstanding  borrowings  under the Credit  Facility.  The Credit
Facility is secured by  substantially  all of the Company's  assets and contains
financial covenants customary for this type of financing. The Credit Facility is
set to mature on July 31, 1999.

         The  Company  believes  that  its  cash on  hand,  together  with  cash
generated from  operations and the cash available  through the Credit  Facility,
will be  sufficient to support  current  operations  and future  growth  through
fiscal 1999. The Company may be required to seek additional sources of funds for
accelerated  growth or continued  growth  after that point,  and there can be no
assurance that such funds will be available on  satisfactory  terms.  Failure to
obtain such financing could delay or prevent the Company's planned growth, which
could adversely affect the Company's  business,  financial condition and results
of operations.

         As a result of state regulatory requirements,  the Company's liquidity,
capital  resources and results of operations  may be negatively  impacted in the
future if the  Company  incurs  increased  costs or fines,  is  prohibited  from
selling its  products in a  particular  state(s)  or  experiences  the loss of a
substantial portion of the Company's customers for whom the Company is unable to
obtain or verify a prescription  due to the enforcement of requirements by state
regulatory agencies.

Year 2000 Issue

         Based on a preliminary review of its current computer  applications and
internal  technology  systems,  the Company believes all of its applications and
internal technology systems are substantially Year 2000 compliant. To ensure the
Company is Year 2000 compliant, the Company is currently taking steps to perform
a more  in-depth  analysis and testing of Year 2000  compliance  on its computer
applications,  internal technology systems and embedded technology.  The Company
does not expect Year 2000  compliance  to be a major issue since the Company has
replaced or upgraded the majority of its critical  technology systems within the
last two years.  However,  the Company believes that by completing this in-depth
analysis and testing that the Company will be able to take any  necessary  steps
to become Year 2000  compliant.  If this analysis and any  necessary  corrective
actions  are not  completed  timely,  the Year 2000 issue  could have a material
impact on the operations of the Company.

         The Company is currently  unable to determine  the effects of Year 2000
compliance by third parties that are significant to its operations.  The Company
has received  several  responses to  correspondence  sent to  significant  third
parties.  The Company is currently reviewing these responses to assess the third
parties' Year 2000 compliance and to determine the extent to which the Company's
operations  will be  impacted  by  those  third  parties'  failure,  if any,  to
adequately  address their own Year 2000 issues. If the systems of critical third
parties  are not in  compliance,  the  Company's  operations  will be  adversely
affected.

         The Company has not yet incurred any significant  costs related to Year
2000  compliance.  Once the Company has completed  the above steps,  the Company
will be able to determine any significant future costs associated with Year 2000
compliance.  Although  the  Company  has not yet  approved  a formal  Year  2000
contingency  plan,  the Company has manual  processes,  which can be used in the
event of system disruption.  The Company expects to approve a formal contingency
plan during 1999.

Forward-Looking Statements

         This report  contains  forward-looking  statements  about the Company's
future  business   prospects.   These   statements  are  subject  to  risks  and
uncertainties  that could cause actual results to differ  materially  from those
set forth in or implied by such  forward  looking  statements.  Factors that may
cause  future  results  to  differ   materially   from  the  Company's   current
expectations include, among others:  general economic conditions,  the health of
the contact lens industry,  inventory  acquisition and  management,  advertising
spending and effectiveness, year 2000 issues and regulatory considerations.


                                       14
<PAGE>


Item 3.      Quantitative and Qualitative Disclosures About Market Risk

         Based on its current operations, the Company believes it is not subject
to  significant  market risk. As of April 3, 1999,  the Company did not hold any
market  risk-sensitive  instruments  and had no  outstanding  debt  other than a
capital  lease  obligation  of  $58,056.  In  addition,  all  of  the  Company's
transactions are in U.S. dollars.


PART II. OTHER INFORMATION

Item 1.      Legal Proceedings

         On July 14, 1998, Craig S. Steinberg,  O.D., a professional corporation
d.b.a. City Eyes Optometry  Center,  filed a purported class action on behalf of
all optometrists  licensed to practice in California against the Company and its
directors in Los Angeles County Superior Court (the "Steinberg Complaint").  The
complaint alleges three separate  causes of action for unfair  competition:  (i)
selling contact lenses to California  residents without being  registered,  (ii)
selling   contact  lenses  to  California   residents   without   verifying  the
prescription,  and (iii)  failing to disclose in its  advertising  that it sells
"sample"  lenses not intended  for sale to the public.  The  complaint  requests
various forms of relief, including damages of an unspecified amount,  attorney's
fees and a permanent  injunction  to prevent the Company  from  selling  contact
lenses to California  residents  without being registered and without  verifying
the  prescription  as well as from selling  sample  contact lenses to California
residents.  In  addition,  the  plaintiff  has  filed a motion  for  preliminary
injunction  seeking the injunctive relief requested in the complaint.  On August
11, 1998, the Company removed the action to the United States District Court for
the Central District of California based on diversity jurisdiction.

         In response to motions by the Company, plaintiff and another California
optometrist,  Ellis  Miles  (collectively  "plaintiffs")  filed a First  Amended
Complaint ("FAC") against the Company and its directors on or about September 3,
1998  purporting  to sue on  behalf  of the  public  under  California's  unfair
competition  statute  rather than as a class  action on behalf of  optometrists.
Although the substantive  claims for unfair competition remain the same, the FAC
seeks restitutionary  relief rather than damages.  Plaintiffs also stipulated to
dismiss the Company's  directors as defendants  rather than oppose the Company's
motion to dismiss them, leaving the Company as the only remaining defendant.

         On October 2, 1998,  plaintiffs  re-filed their motion for  preliminary
injunction  in federal  court.  The  Company  likewise  filed a motion to strike
plaintiff's  claims for monetary  relief.  Plaintiffs  withdrew their motion for
preliminary  injunction  on  October  19,  1998,  after  the  Company  filed its
opposition  to the motion  indicating,  inter  alia,  that the  Company had been
registered as a Nonresident Contact Lens Seller in California.  The Court denied
the  Company's  motion to  strike  plaintiffs'  claims  for  monetary  relief on
February 26, 1999.  The Company filed its Answer to the First Amended  Complaint
on March 11, 1999.

         On May 7, 1999 the Kansas Board of  Examiners in Optometry  commenced a
civil action against the Company.  The action was filed in the District Court of
Shawnee County,  Kansas  Division 6. The complaint  alleges that on "one or more
occasions" the Company sold contact lenses without  receipt or verification of a
prescription.  The relief  requested is the issuance of an order  enjoining  the
company from further  engaging in the alleged  activity.  The complaint does not
seek monetary damage.

         The Company,  in response to the  complaint,  has retained  counsel and
intends to vigorously  defend itself in this action.  An answer to the complaint
is not presently due but will be filed in a timely manner.

        From  time to time the  Company  is  involved  in other  legal  matters
generally incidental to its business.

         It is the opinion of management,  after  discussion with legal counsel,
that the ultimate  dispositions of these matters will not have a material impact
on the financial condition, liquidity or results of operations of the Company.

                                       15
<PAGE>

Item 2.      Changes in Securities and Use of Proceeds

          None.

Item 3.      Defaults upon Senior Securities

          None.


Item 4.      Submission of Matters to a Vote of Security Holders

          None.

Item 5.      Other Information

         From time to time the  Company  receives  notices,  inquiries  or other
correspondence  from states or its regulatory bodies charged with overseeing the
sale of contact  lenses.  The Company's  practice is to review such notices with
legal counsel to determine the appropriate  response on a case-by-case basis. It
is the opinion of management,  after  discussion  with legal  counsel,  that the
Company is taking the appropriate steps to address the various notices received.

Item 6.      Exhibits and Reports on Form 8-K

             (A)  Exhibit Index


                     Exhibit No.        Description of Exhibit
                     -----------        ----------------------

                     27                 Financial Data Schedule.
 
             (B) No reports on Form 8-K were filed by the Registrant  during the
quarter ended April 3, 1999.


                                       16
<PAGE>

                                   SIGNATURES

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


                             1-800 CONTACTS, INC.


Dated: May 18, 1999          By:      /s/Jonathan C. Coon                       
                                      ------------------------------------------
                             Name:    Jonathan C. Coon
                             Title:   President & Chief Executive Officer


                             By:      /s/Scott S. Tanner 
                                      ------------------------------------------
                             Name:    Scott S. Tanner
                             Title:   Chief Financial Officer