<PAGE>
 
================================================================================

                                 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 EXCHANGE ACT OF 1934
                                        
                 FOR THE QUARTERLY PERIOD ENDED MARCH 28, 1998

                                      OR

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

                        COMMISSION FILE NUMBER 1-11566

                                 COMPUSA INC.
            (Exact name of registrant as specified in its charter)

 
           DELAWARE                                               75-2261497
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                14951 NORTH DALLAS PARKWAY, DALLAS, TEXAS 75240
                   (Address of principal executive offices)

      Registrant's telephone number, including area code:  (972) 982-4000

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                               Yes  X    No 
                                   ---      ---

     The registrant had 90,819,756 shares of common stock, $.01 per share par
value, outstanding as of May 5, 1998.

================================================================================
<PAGE>
 
                        PART I - FINANCIAL INFORMATION



ITEM 1.   FINANCIAL STATEMENTS

          Consolidated Balance Sheets at March 28, 1998 (unaudited)
               and June 28, 1997...........................................  3
 
          Consolidated Income Statements for the thirteen weeks
               and thirty-nine weeks ended March 28, 1998 and
               March 29, 1997 (unaudited)..................................  4
 
          Consolidated Statements of Cash Flows for the thirty-nine weeks
               ended March 28, 1998 and March 29, 1997 (unaudited).........  5
 
          Notes to Consolidated Financial Statements (unaudited)...........  6

     Separate financial statements relating to the Company's subsidiaries are
omitted since all of them are wholly owned and have each guaranteed the
Company's 9 1/2% Senior Subordinated Notes due 2000 on a full, unconditional,
and joint and several basis and the Company does not consider such separate
financial statements to be material to investors.


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS........................................ 10



                          PART II - OTHER INFORMATION
 
 
ITEM 1.   LEGAL PROCEEDINGS................................................ 16
 
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K................................. 16
 
SIGNATURES................................................................. 17
 
EXHIBIT 11 - COMPUTATIONS OF EARNINGS PER SHARE............................ 18

                                       2
<PAGE>
 
                                 COMPUSA INC.

                          CONSOLIDATED BALANCE SHEETS
                         (in thousands, except shares)

 
<TABLE> 
<CAPTION> 
                                                                MARCH 28,         JUNE 28,
                                                                  1998              1997
                                                             --------------    --------------
                                                               (unaudited)
                                            ASSETS
 
<S>                                                            <C>               <C>
Current assets:
   Cash and cash equivalents.................................    $  217,084        $  209,929
   Accounts receivable, net of allowance for doubtful        
    accounts of $3,567 and $2,883 at March 28, 1998 
    and June 28, 1997, respectively..........................       235,661           214,568
   Merchandise inventories...................................       624,524           501,426
   Prepaid expenses and other................................        25,396            18,521
                                                             --------------    --------------
       Total current assets..................................     1,102,665           944,444
Property and equipment, net..................................       228,268           170,801
Other assets.................................................         9,777             9,347
                                                             --------------    --------------
                                                                 $1,340,710        $1,124,592
                                                             ==============    ==============
                             LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable..........................................    $  639,471        $  483,548
   Accrued liabilities.......................................       111,762            93,794
   Current portion of capital lease obligations..............         1,439             3,139
                                                             --------------    --------------
       Total current liabilities.............................       752,672           580,481
Capital lease obligations....................................         1,985             2,458
Senior Subordinated Notes....................................       110,000           110,000
Deferred income taxes........................................         2,487             3,686
Commitments and contingencies................................            --                --
Stockholders' equity:
   Preferred stock, $.01 per share par value, 10,000 shares  
    authorized, none issued..................................            --                --
   Common stock, $.01 per share par value; 325,000,000
    shares authorized, with 93,243,907 shares issued at
    March 28, 1998; 200,000,000 shares authorized with       
    91,763,372 shares issued at June 28, 1997................           932               918
   Paid-in capital...........................................       269,843           262,908
   Retained earnings.........................................       249,466           166,502
                                                             --------------    --------------
                                                                    520,241           430,328
   Less: Treasury stock, at cost, 1,717,427 shares at March
    28, 1998 and 316,627 shares at June 28, 1997.............       (46,675)           (2,361)
                                                             --------------    --------------
       Total stockholders' equity                                   473,566           427,967
                                                             --------------    --------------
                                                                 $1,340,710        $1,124,592
                                                             ==============    ==============
</TABLE>

                            See accompanying notes.

                                       3
<PAGE>
 
                                 COMPUSA INC.
                                        
                        CONSOLIDATED INCOME STATEMENTS
                     (in thousands, except per share data)
                                  (unaudited)

<TABLE> 
<CAPTION> 
                                                     THIRTEEN WEEKS ENDED                     THIRTY-NINE WEEKS ENDED
                                              ----------------------------------        ---------------------------------- 
                                                MARCH 28,            MARCH 29,            MARCH 28,            MARCH 29,     
                                                  1998                 1997                 1998                 1997
                                              -------------        -------------        -------------        ------------- 
<S>                                           <C>                  <C>                  <C>                  <C>
                                                
Net sales.............................          $1,451,819           $1,272,882           $4,100,356           $3,462,015
Cost of sales and occupancy costs.....           1,246,634            1,089,902            3,504,826            2,975,389 
                                              -------------        -------------        -------------        ------------- 
   Gross profit.......................             205,185              182,980              595,530              486,626
                                                                                                                         
Operating expenses....................             134,190              105,466              369,097              298,218
Pre-opening expenses..................                 513                  250                5,993                4,727
General and administrative expenses...              27,851               23,320               82,259               65,070 
                                              -------------        -------------        -------------        ------------- 
   Operating income...................              42,631               53,944              138,181              118,611
 
Other expense (income):
 Interest expense.....................               3,045                3,102                9,141                9,136
 Other income, net....................              (1,778)              (2,355)              (5,862)              (5,956)
                                              -------------        -------------        -------------        ------------- 
                                                     1,267                  747                3,279                3,180 
                                              -------------        -------------        -------------        ------------- 
                                                    
Income before income taxes............              41,364               53,197              134,902              115,431
Income tax expense....................              15,926               20,482               51,938               44,442 
                                              -------------        -------------        -------------        ------------- 
Net income............................          $   25,438           $   32,715           $   82,964           $   70,989
                                              =============        =============        =============        =============
 
Basic earnings per share..............               $0.28                $0.36                $0.91                $0.78
                                              =============        =============        =============        =============
 
Diluted earnings per share............               $0.27                $0.35                $0.87                $0.75
                                              =============        =============        =============        =============
 
Weighted average common shares........              91,518               91,110               91,527               90,665
                                              =============        =============        =============        =============
 
Weighted average common and
 common equivalent shares.............              94,692               94,450               95,238               94,576
                                              =============        =============        =============        =============
</TABLE>


                            See accompanying notes.

                                       4
<PAGE>
 
                                 COMPUSA INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
                                  (unaudited)

   
<TABLE> 
<CAPTION> 
                                                                     THIRTY-NINE WEEKS ENDED
                                                                   ----------------------------
                                                                    MARCH 28,         MARCH 29, 
                                                                      1998              1997
                                                                   ---------          ---------
<S>                                                                <C>                <C>
Cash flows provided by (used in) operating activities:
  Net income.............................................          $  82,964          $  70,989
     Adjustments to reconcile net income to net cash                                           
      provided by operating activities:                                                        
       Depreciation and amortization.....................             34,695             25,664
       Changes in assets and liabilities:                                                      
         Increase in accounts receivable.................            (21,093)           (32,334)
         Increase in merchandise inventories.............           (123,098)          (226,214)
         Increase in prepaid expenses and other assets...             (9,176)            (7,606)
         Increase in accounts payable and accrued        
          liabilities....................................            173,806            274,528  
                                                                   ---------          ---------
            Net cash provided by operating activities....            138,098            105,027 
 
Cash flows provided by (used in) investing activities:
  Capital expenditures...................................            (91,455)           (56,603)
  Other..................................................                145                294 
                                                                   ---------          ---------
            Net cash used in investing activities........            (91,310)           (56,309)
 
Cash flows provided by (used in) financing activities:
  Proceeds from issuance of common stock.................              6,949              3,447
  Purchase of treasury stock.............................            (44,314)                --
  Sale of treasury stock to benefit plan.................                 --              1,233
  Payments under capital lease obligations...............             (2,268)            (3,924)
                                                                   ---------          ---------
            Net cash provided by (used in) financing     
             activities..................................            (39,633)               756  
                                                                   ---------          ---------
Net increase in cash and cash equivalents................              7,155             49,474
Cash and cash equivalents at beginning of period.........            209,929            207,614 
                                                                   ---------          ---------
Cash and cash equivalents at end of period...............          $ 217,084          $ 257,088 
                                                                   =========          =========
</TABLE>



                            See accompanying notes.

                                       5
<PAGE>
 
                                 COMPUSA INC.
                                        
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

1.   BASIS OF PRESENTATION

     The consolidated financial statements include the accounts of CompUSA Inc.
and its wholly owned subsidiaries (collectively, the "Company"). All significant
intercompany accounts and transactions have been eliminated. In the opinion of
management, the accompanying unaudited consolidated financial statements contain
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the financial position, results of operations, and cash flows of
the Company for the applicable interim periods. The results of operations for
these periods are not necessarily comparable to, or indicative of, results of
any other interim period or for the fiscal year as a whole.

     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
interim financial statements.  Therefore, these financial statements should be
read in conjunction with the Company's Annual Report on Form 10-K for the fiscal
year ended June 28, 1997.

     The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions.  These estimates and assumptions affect the reported
amounts of assets, liabilities, revenues, and expenses and the disclosure of
gain and loss contingencies at the date of the consolidated financial
statements.  Actual results could differ from those estimates.


2.   EQUITY

     The Company adopted the provisions of the Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings per Share" in the preparation of the
financial statements included in the Quarterly Report on Form 10-Q for the
thirteen weeks ended December 27, 1997.  In accordance with the provisions of
SFAS No. 128, the Company is required to report both "basic" and "diluted"
earnings per share and to restate previously reported earnings per share amounts
to conform to the provisions of SFAS 128.  Basic earnings per share has been
computed using the weighted average number of shares of common stock of the
Company ("Common Stock") outstanding for each period presented.  The dilutive
effect of stock options and other common stock equivalents is included in the
calculation of diluted earnings per share using the treasury stock method.  For
the periods presented, the diluted earnings per share amounts are the same as
the earnings per share amounts previously reported by the Company

     In September 1997, the Company's Board of Directors authorized the purchase
of up to $60 million of Common Stock. As of March 28, 1998, the Company had
purchased 1.4 million shares of Common Stock, to be held as treasury stock, for
approximately $44.3 million (approximately $31.59 per share), pursuant to the
September 1997 authorization. In the fourth quarter of fiscal 1998, the Company
purchased an additional 790,000 shares of Common Stock to be held as treasury
stock, for approximately $15.7 million (approximately $19.80 per share) and, as
a result, no additional treasury stock purchases can currently be made by the
Company.

                                       6
<PAGE>
 
                                 COMPUSA INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (unaudited)

3.   COMMITMENTS AND CONTINGENCIES

     On April 23, 1998, a lawsuit, Hoeck v. CompUSA Inc. et al., was filed by a
stockholder of the Company in the United States District Court for the Northern
District of Texas against the Company and certain of its officers, seeking class
action status on behalf of the purchasers of the Company's Common Stock and
related publicly traded options during the class period.  The action alleges
various violations of the federal securities laws.  Damages have not been
specified.  The Company believes the claims are without merit and intends to
vigorously defend against such charges.  In addition, the Company is a defendant
from time to time in lawsuits incidental to its business.  Based on currently
available information, the Company believes that resolution of all known
contingencies would not have a material adverse impact on the Company's
financial statements.  However, there can be no assurances that future costs
would not be material to the results of operations of the Company for a
particular future period.  In addition, the Company's estimates of future costs
are subject to change as circumstances change and additional information becomes
available during the course of litigation.


4.   SUBSIDIARY GUARANTEES

     The Company's 9 1/2% Senior Subordinated Notes due 2000 (the "Senior
Subordinated Notes") are guaranteed on a full, unconditional, and joint and
several basis by all of the Company's direct and indirect subsidiaries, each of
which is wholly owned. The combined summarized information of these subsidiaries
is as follows:

                                                  AS OF AND FOR THE
                                               THIRTY-NINE WEEKS ENDED
                                         -----------------------------------
                                            MARCH 28,            MARCH 29,
                                              1998                 1997
                                         --------------       --------------
                                                   (in thousands)

Intercompany receivables................   $  195,216           $   46,871
Other current assets....................      454,756              445,210
Noncurrent assets.......................      190,785              129,585
Intercompany payables...................       17,466               45,756
Other current liabilities...............      275,957              149,169
Long-term debt and liabilities..........        1,972                2,199
Net sales...............................    2,788,990            2,443,100
Intercompany revenues...................      159,361              153,263
Costs and expenses......................    2,701,041            2,377,246
Intercompany expenses...................      104,925              107,598
Net income..............................       87,567               68,584 

     In the preparation of the Company's consolidated financial statements, all
intercompany accounts were eliminated.  There are no restrictions that limit the
ability of the Company's subsidiaries to declare and pay dividends to the
Company.

                                       7
<PAGE>
 
                                  COMPUSA INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (unaudited)

5.   SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

                                          THIRTY-NINE WEEKS ENDED
                                          -----------------------
                                          MARCH 28,     MARCH 29, 
                                            1998          1997
                                          ---------     ---------
                                              (in thousands)
                                       
Cash paid during the periods for:      
     Interest..........................     $ 5,634       $ 5,823
     Income taxes......................      47,784        36,537
 
Investing activities not affecting 
 cash are as follows:
     Additions to property and 
      equipment under capital leases...     $    95       $   648

6.   NEW ACCOUNTING PRONOUNCEMENTS

     In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about
Segments of an Enterprise and Related Information," which is effective for years
beginning after December 15, 1997.  SFAS No. 131 establishes standards requiring
public business enterprises to report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports.  SFAS No. 131
also establishes standards for related disclosures about products and services,
geographic areas, and major customers.  SFAS No. 131 is effective for financial
statements for fiscal years beginning after December 15, 1997, and therefore the
Company will adopt the annual disclosure requirements in the preparation of its
Annual Report on Form 10-K for fiscal 1999 while the quarterly disclosure
requirements will be adopted in fiscal 2000.  Management has not completed its
review of SFAS No. 131 and has not determined the impact on the Company's
financial statement disclosures.


7.   CREDIT AGREEMENT

     Effective March 12, 1998, the Company entered into a new three-year
unsecured revolving credit agreement (the "Credit Agreement") with a consortium
of thirteen banks that provides for borrowings and letters of credit up to a
maximum of $300 million, with letters of credit not to exceed $100 million in
the aggregate. The Credit Agreement replaces a previous $150 million unsecured
credit agreement. The funds available under the Credit Agreement may be used for
any corporate purpose, including purchasing or redeeming the Senior Subordinated
Notes in part or in full. At March 28, 1998, the Company had no borrowings
outstanding under the Credit Agreement.

     Borrowings under the Credit Agreement bear interest, at the Company's
option, at either a prime rate (8.5% per annum as of March 28, 1998) or a rate
based on the London Interbank Offering Rate (LIBOR) ranging from 5.7% to 5.8% as
of March 28, 1998, plus a specified margin, currently 0.75%. The Company also
pays certain commitment and agent fees. The Company has the annual option to
extend the Credit Agreement for an additional year with the banks' approval.

                                       8
<PAGE>
 
                                 COMPUSA INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (unaudited)

7.   CREDIT AGREEMENT (CONTINUED)

     The Credit Agreement requires that the Company maintain certain financial
ratios and a minimum net worth.  The Credit Agreement imposes certain
limitations on indebtedness, liens, and mergers and consolidations.  The Credit
Agreement also limits the Company's ability to pay dividends and purchase shares
of Common Stock.  As of March 28, 1998, the Company has approximately $75.3
million available to pay dividends and purchase Common Stock pursuant to the
provisions of the Credit Agreement.  The Credit Agreement allows the Company to
securitize up to $200 million of certain assets.  The indebtedness under the
Credit Agreement is guaranteed on a full, unconditional, and joint and several
basis by all subsidiaries of the Company.  However, the Credit Agreement allows
the Company to designate one or more of its subsidiaries to be free from most of
the restrictions under the Credit Agreement so long as no default will exist and
such subsidiaries do not contribute more than 10% of the Company's consolidated
cash flow or hold more than 10% of the Company's consolidated assets.

                                       9
<PAGE>
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE
RESULTS

     This Quarterly Report on Form 10-Q contains forward-looking statements
about the business, financial condition, and prospects of the Company. The
actual results of the Company could differ materially from those indicated by
the forward-looking statements because of various risks and uncertainties,
including without limitation changes in product demand, the availability of
products, changes in competition, the ability of the Company to open new stores
in accordance with its plans, economic conditions, real estate market
fluctuations, interest rate fluctuations, dependence on manufacturers' product
development, various inventory risks due to changes in market conditions,
changes in tax and other governmental rules and regulations applicable to the
Company, and other risks indicated in the Company's filings with the Securities
and Exchange Commission. The Company's entry into the build-to-order market in
the first quarter of fiscal 1998 with its CompUSA PC(TM) brand personal
computers involves significant additional risks, including without limitation
failure to achieve customer acceptance of the new products and substantial
dependence on third parties for product quality and reliability and timely
fulfillment of customer orders. All of the foregoing risks and uncertainties are
beyond the ability of the Company to control, and in many cases, the Company
cannot predict the risks and uncertainties that could cause its actual results
to differ materially from those indicated by the forward-looking statements.
When used in this Quarterly Report on Form 10-Q, the words "believes,"
"estimates," "plans," "expects," "anticipates," and similar expressions as they
relate to the Company or its management are intended to identify forward-looking
statements.

GENERAL

     All references herein to "fiscal 1998" relate to the fifty-two weeks ending
June 27, 1998, and references to "fiscal 1997" relate to the fifty-two weeks
ended June 28, 1997.  In addition, all references herein to "third quarter of
fiscal 1998" and "first nine months of fiscal 1998" relate to the thirteen weeks
and thirty-nine weeks, respectively, ended March 28, 1998, and all references to
"third quarter of fiscal 1997" and "first nine months of fiscal 1997" relate to
the thirteen weeks and thirty-nine weeks, respectively, ended March 29, 1997.

     The following table sets forth certain operating data for the Company:

<TABLE>
<CAPTION>
                                         THIRTEEN WEEKS ENDED    THIRTY-NINE WEEKS ENDED
                                        ----------------------   -----------------------
                                        MARCH 28,    MARCH 29,   MARCH 28,     MARCH 29,
                                          1998         1997        1998          1997
                                        ---------    ---------   ---------     ---------
<S>                                     <C>          <C>         <C>           <C>
                                        
Stores open at end of period.......         150          123         150           123
Stores opened during the period....           2            1          21            18
Stores relocated during the period.          --           --           2            --
Average net sales per gross square                                                    
 foot(1)(2)........................        $343         $372      $1,023        $1,061                                         
Comparable store sales
 increase(2)(3)....................         1.2%         5.6%        5.2%          4.6%
</TABLE>
--------------------

(1) Calculated using net sales divided by gross square footage of the Company's
    Computer Superstores(SM) open at the end of the period, weighted by the
    number of months open during the period.
(2) Net sales for purposes of the above calculations are comprised of net sales
    generated from Computer Superstores, as well as the Company's national
    accounts group, but exclude mail order sales.
(3) Comparable store sales are net sales for Computer Superstores open the same
    number of months in both the indicated and previous period, including stores
    that were relocated or expanded during either period.

                                       10
<PAGE>
 
     The Company believes the opening of additional Computer Superstores in
existing markets has resulted in some reductions in the rate of comparable store
sales growth.  CompUSA has opened additional stores in existing markets largely
to increase market penetration and to provide customers with more convenience
and better service.  The Company plans to continue its strategy of opening
additional Computer Superstores in existing markets.  The resulting diversion of
sales from existing stores may adversely affect the Company's comparable store
sales.  However, the Company believes that this strategy should increase its
awareness with local consumers, enhance its competitive position in such markets
and create efficiencies in advertising and management and is, therefore, in the
Company's long-term best interest.

RESULTS OF OPERATIONS

     As a result of the expansion of the Company's store base, period-to-period
comparisons of financial results may not be meaningful and the results of
operations for historical periods may not be indicative of the results to be
expected in future periods.  In addition, the Company expects that its quarterly
results of operations will fluctuate depending on the timing of the opening of,
and the amount of net sales contributed by, new stores and the timing of costs
associated with the selection, leasing, construction, and opening of new stores,
as well as seasonal factors, product introductions, and changes in product mix.
See "--Quarterly Data and Seasonality."  The following table sets forth certain
items expressed as a percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>
                                         THIRTEEN WEEKS ENDED    THIRTY-NINE WEEKS ENDED
                                        ----------------------   -----------------------
                                        MARCH 28,    MARCH 29,   MARCH 28,     MARCH 29,
                                          1998         1997        1998          1997
                                        ---------    ---------   ---------     ---------
<S>                                     <C>          <C>         <C>           <C>
                                   
Net sales..........................       100.0%       100.0%      100.0%        100.0%
Cost of sales and occupancy costs..        85.9         85.6        85.5          85.9
                                        ---------    ---------   ---------     ---------
Gross profit.......................        14.1         14.4        14.5          14.1
Operating expenses.................         9.2          8.3         9.0           8.6
Pre-opening expenses...............         0.1          0.1         0.1           0.2
General and administrative expenses         1.9          1.8         2.0           1.9 
                                        ---------    ---------   ---------     ---------
Operating income...................         2.9          4.2         3.4           3.4
Interest expense and other income,                       
 net...............................         0.1           --         0.1           0.1
                                        ---------    ---------   ---------     ---------
Income before income taxes.........         2.8          4.2         3.3           3.3
Income tax expense.................         1.0          1.6         1.3           1.2  
                                        ---------    ---------   ---------     ---------
Net income.........................         1.8%         2.6%        2.0%          2.1% 
                                        =========    =========   =========     =========
</TABLE>

THIRD QUARTER ENDED MARCH 28, 1998, COMPARED WITH THE THIRD QUARTER ENDED MARCH
29, 1997

     Net sales for the third quarter of fiscal 1998 increased 14.1% to $1.45
billion from $1.27 billion for the third quarter of fiscal 1997.  The increase
in net sales was primarily due to the additional sales volume attributable to
the new stores opened subsequent to the third quarter of fiscal 1997 and an
increase in comparable store sales of 1.2%. However, in the third quarter of
fiscal 1998, average net sales per Computer Superstore declined approximately 6%
from the third quarter of fiscal 1997.  The Company believes average net sales
per Computer Superstore were negatively impacted by an increase in the
percentage of the Company's stores open for less than two years.  In general,
less mature stores generate lower sales than more mature stores.  Despite an
increase in the number of personal computer systems sold in the third quarter of
fiscal 1998, the Company believes sales were negatively impacted by, among other
things, declines in average selling prices for certain of the Company's
products, including desktop and notebook computers and monitors, as well as
increased sales of lower-end computer systems. In addition, the Company believes
that sales were negatively impacted in the third quarter of fiscal 1998 by a
softening of demand in the corporate sector.

                                       11
<PAGE>
 
     Gross profit was $205 million, or 14.1% of net sales, in the third quarter
of fiscal 1998, compared with $183 million, or 14.4% of net sales, in the third
quarter of fiscal 1997. Management believes that the decline in gross margin in
the third quarter of fiscal 1998 compared with the third quarter of fiscal 1997
is due, in part, to lower product margins, costs associated with the CompUSA PC
line of build-to-order personal computers, and the deleveraging of occupancy
costs, which are generally fixed in nature. These declines were partially offset
by an increase in the ratio of service revenues to total revenues. Service
revenues typically have higher gross margins than merchandising sales.

     Operating expenses were $134 million, or 9.2% of net sales, in the third
quarter of fiscal 1998, compared with $105 million, or 8.3% of net sales, in the
third quarter of fiscal 1997.  In the third quarter of fiscal 1998, net
advertising expense and other operating expenses increased as a percentage of
net sales, compared with the third quarter of fiscal 1997.  Net advertising
expense increased as a percentage of net sales in the third quarter of fiscal
1998 due to a lower rate of sales growth experienced in the quarter.  The
increase in other operating expenses as a percentage of net sales is due
primarily to the deleveraging of facilities expenses, an increase in the ratio
of service revenues to total revenues, and costs associated with the Company's
efforts to expand certain of its businesses.  These increases were partially
offset by lower incentive compensation.  Facilities expenses are generally fixed
in nature and deleveraged in the third quarter of fiscal 1998 as a result of
lower average net sales per store.  The increase in the ratio of service
revenues to total revenues had the effect of increasing operating expenses as a
percentage of net sales because operating expenses are generally higher for
service revenues than for merchandise sales.

     Pre-opening expenses consist primarily of personnel expenses incurred prior
to a store's opening and promotional costs associated with the opening. The
Company's policy is to expense all pre-opening expenses in the month of the
store's grand opening. In the third quarter of fiscal 1998, the Company incurred
$513,000 in pre-opening expenses in connection with the opening of two Computer
Superstores, compared with $250,000 in pre-opening expenses incurred in the
third quarter of fiscal 1997 in connection with the opening of one store.

     General and administrative expenses of $27.9 million, or 1.9% of net sales,
in the third quarter of fiscal 1998, remained relatively constant as a
percentage of net sales compared with $23.3 million, or 1.8% of net sales, in
the third quarter of fiscal 1997. The increase in general and administrative
expenses as a percentage of net sales was primarily due to the deleveraging of
corporate facilities expenses, which are generally fixed in nature, and costs
associated with the Company's efforts to expand certain of its businesses as
well as to develop new business opportunities. These increases were partially
offset by lower incentive compensation.

     Interest expense and other income, net, was $1.3 million in the third
quarter of fiscal 1998 compared with $747,000 in the third quarter of fiscal
1997. The increase in interest expense and other income, net, is primarily due
to lower interest income earned on lower average investment levels in the third
quarter of fiscal 1998. See "--Liquidity and Capital Resources."

     The Company's effective tax rate was 38.5% for both the third quarter of
fiscal 1998 and the third quarter of fiscal 1997.

     As a result of the above, net income for the third quarter of fiscal 1998
was $25.4 million, or $.27 per diluted share, compared with net income of $32.7
million, or $.35 per diluted share, for the third quarter of fiscal 1997.

NINE MONTHS ENDED MARCH 28, 1998, COMPARED WITH THE NINE MONTHS ENDED MARCH 29,
1997

     Net sales for the first nine months of fiscal 1998 increased 18.4% to $4.10
billion from $3.46 billion for the first nine months of fiscal 1997.  The
increase in net sales was primarily due to the additional sales volume
attributable to the new stores opened subsequent to the first nine months of
fiscal 1997 and an increase in comparable store sales of 5.2%.  However, average
net sales per Computer Superstore for the first nine months of fiscal 1998
declined 

                                       12
<PAGE>
 
approximately 3% from the first nine months of fiscal 1997. The Company believes
that average net sales per Computer Superstore were negatively impacted by an
increase in the percentage of the Company's stores open for less than two years.
In general, less mature stores generate lower sales than more mature stores.
Despite an increase in the number of personal computer systems sold in the first
nine months of fiscal 1998, the Company believes sales were negatively impacted
by, among other things, declines in average selling prices for certain of the
Company's products, including desktop and notebook computers and monitors, as
well as increased sales of lower-end computer systems.

     Gross profit was $596 million, or 14.5% of net sales, in the first nine
months of fiscal 1998, compared with $487 million, or 14.1% of net sales, in the
first nine months of fiscal 1997. The increase in gross margin was primarily due
to higher product margin and an increase in the ratio of service revenues to
total revenues. Service revenues typically have higher gross margins than
merchandise sales. The foregoing factors were partially offset by costs
associated with the CompUSA PC line of build-to-order personal computers and the
decline in average net sales per Computer Superstore that resulted in the
deleveraging of occupancy costs, which are generally fixed in nature.

     Operating expenses were $369 million, or 9.0% of net sales, in the first
nine months of fiscal 1998, compared with $298 million, or 8.6% of net sales, in
the first nine months of fiscal 1997. In the first nine months of fiscal 1998,
net advertising expense decreased as a percentage of net sales and other
operating expenses increased as a percentage of net sales. The decrease in net
advertising expense as a percentage of net sales resulted primarily from
increased vendor participation. The increase in other operating expenses as a
percentage of net sales is due primarily to the deleveraging of facilities
expenses, an increase in the ratio of service revenues to total revenues, and
costs associated with the Company's efforts to expand certain of its businesses.
These increases were partially offset by lower incentive compensation.
Facilities expenses are generally fixed in nature and deleveraged in the third
quarter of fiscal 1998 as a result of lower average net sales per store. The
increase in the ratio of service revenues to total revenues had the effect of
increasing operating expenses as a percentage of net sales because operating
expenses are generally higher for service revenues than for merchandise sales.

     Pre-opening expenses consist primarily of personnel expenses incurred prior
to a store's opening and promotional costs associated with the opening. In the
first nine months of fiscal 1998, the Company incurred $6.0 million in pre-
opening expenses in connection with the opening of 21 Computer Superstores and
the relocation of two stores, compared with $4.7 million in pre-opening expenses
incurred in the first nine months of fiscal 1997 in connection with the opening
of 18 new stores.

     General and administrative expenses of $82.3 million, or 2.0% of net sales,
in the first nine months of fiscal 1998, remained relatively constant as a
percentage of net sales compared with $65.1 million, or 1.9% of net sales, for
the first nine months of fiscal 1997. The increase in general and administrative
expenses as a percentage of net sales was primarily due to the deleveraging of
corporate facilities expenses, which are generally fixed in nature, and costs
associated with the Company's efforts to expand certain of its businesses as
well as to develop new business opportunities. These increases were partially
offset by lower incentive compensation.

     Interest expense and other income, net, of $3.3 million, or 0.1% of net
sales, in the first nine months of fiscal 1998 remained relatively constant as a
percentage of net sales compared with $3.2 million, or 0.1% of net sales, in the
first nine months of fiscal 1997. See "--Liquidity and Capital Resources."

     The Company's effective tax rate was 38.5% for both the first nine months
of fiscal 1998 and the first nine months of fiscal 1997.

     As a result of the above, net income for the first nine months of fiscal
1998 was $83.0 million, or $.87 per diluted share, compared with net income of
$71.0 million, or $.75 per diluted share, for the first nine months of fiscal
1997.

                                       13
<PAGE>
 
QUARTERLY DATA AND SEASONALITY

     The Company expects that its quarterly results of operations will fluctuate
depending on the timing of the opening of, and the amount of net sales
contributed by, new stores and the timing of costs associated with the
selection, leasing, construction, and opening of new stores, as well as seasonal
factors, product introductions, and changes in product mix.

     Based upon its past operating history, the Company believes that its
business is seasonal. Excluding the effects of new store openings, net sales and
earnings are generally lower during the first and fourth fiscal quarters than in
the second and third fiscal quarters.

LIQUIDITY AND CAPITAL RESOURCES

     At March 28, 1998, total assets were $1.34 billion, $1.10 billion of which
were current assets, including $217 million of cash and cash equivalents.  Net
cash provided by operating activities for the first nine months of fiscal 1998
was $138 million, compared with net cash provided by operating activities of
$105 million for the first nine months of fiscal 1997.

     Approximately three-fourths of the Company's net sales during the third
quarter of both fiscal 1998 and fiscal 1997 were sales for which the Company
received payment at the time of sale either in cash, by check, or by third-party
credit card. The remaining net sales were primarily sales for which the Company
provided credit terms to corporate, government, and education customers.

     Merchandise inventories increased to $625 million at March 28, 1998 from
$501 million at June 28, 1997. The increase in merchandise inventories is
primarily attributable to inventories at the 21 Computer Superstores opened in
the first nine months of fiscal 1998 and higher inventories at the Company's
distribution and configuration facilities. On a per store basis, inventory
declined to $4.0 million per store from $4.9 million per store a year ago.

     Capital expenditures during the first nine months of fiscal 1998 were $91.5
million, of which $21.7 million were for fiscal 1998 new stores and $19.1
million were for existing stores, compared with $56.6 million of capital
expenditures during the first nine months of fiscal 1997, of which $15.3 million
were for fiscal 1997 new stores and $18.5 million were for existing stores.  In
addition to capital expenditures incurred in connection with new stores, the
Company incurred capital expenditures in the first nine months of fiscal 1998
and fiscal 1997 related to improvements in information systems and additions to
property and equipment at the Company's corporate facilities.  Excluding the
effects of new store openings, the Company's greatest short-term capital
requirements occur during the second fiscal quarter to support a higher level of
sales in that quarter.  During fiscal 1998, the Company plans to open
approximately 32 new Computer Superstores and anticipates total capital
expenditures of approximately $100 to $120 million.  The Company believes its
available cash and cash equivalents and vendor and bank financing are sufficient
to satisfy its short-term capital requirements.

     The Company has an unsecured $300 million credit agreement (the "Credit
Agreement") with a consortium of banks that expires in March 2001.  The Credit
Agreement requires that the Company maintain certain financial ratios and a
minimum net worth and restricts, among other things, the Company's ability to
incur additional indebtedness.  However, the Credit Agreement allows the Company
to securitize up to $200 million of certain assets.  See Note 7 of Notes to
Consolidated Financial Statements.  At March 28, 1998, the Company had no
borrowings outstanding under the Credit Agreement.  The Company also finances
certain fixture and equipment acquisitions through equipment lessors.  Lease
financing is available from numerous sources and the Company evaluates equipment
leasing as a supplemental source of financing on a continuing basis.

                                       14
<PAGE>
 
     The Company believes that its available cash and cash equivalents, funds
generated by operations, currently available vendor and floor plan financing,
lease financing, and funds available under the Credit Agreement should be
sufficient to finance its continuing operations and expansion plans through the
end of fiscal 1998 and to make all required payments of interest on the Senior
Subordinated Notes.  The level of future expansion will be contingent upon the
availability of additional capital.

INFLATION

     While inflation has not had, and the Company does not expect it to have, a
material impact upon operating results, there can be no assurances that the
Company's business will not be affected by inflation in the future.

YEAR 2000 ISSUES

     The Company has undertaken various initiatives intended to ensure that the
computer equipment and software used by the Company will function properly with
respect to the dates in the Year 2000 and thereafter.  Based upon its
assessments to date, the Company believes that certain of the computer equipment
and software it currently uses will require replacement or modification.  In
addition, in the ordinary course of replacing computer systems, the Company
attempts to utilize replacement systems that are Year 2000 compliant.  Utilizing
both internal and external resources to identify needs for Year 2000
modifications, the Company currently anticipates that the modification and
conversion efforts will be completed in various stages from December 31, 1998 to
June 30, 1999 and that such modifications will be completed prior to any
currently anticipated impact on its systems.

     The Company has also initiated communications with its significant
suppliers and customers to determine the extent to which system interfaces with
such entities are vulnerable to Year 2000 issues and whether the products
purchased from or by such entities are Year 2000 compliant.

     The Company believes that the costs to modify its systems to be Year 2000
compliant, as well as the currently anticipated costs with respect to Year 2000
issues of third parties, will not exceed $5.0 million, which expenditures will
be funded from operating cash flows.  The Company presently believes that the
Year 2000 issue will not pose significant operational problems for the Company.
However, if modifications and conversions are not made as they are identified,
or are not completed timely, there can be no assurance that the Year 2000 issues
will not have a material impact on the Company or adversely affect the Company's
relationships with customers, suppliers, or others.  Additionally, there can be
no assurance that the Year 2000 issues of other entities will not have a
material adverse impact on the Company's systems or business.

     The costs of the efforts to be expended by the Company and the date on
which the Company believes it will complete the Year 2000 modifications are
based upon management's best estimates, which are derived utilizing numerous
assumptions regarding future events. There can be no assurance that these
estimates will be achieved and actual results could differ materially from those
currently anticipated.

                                       15
<PAGE>
 
                                    PART II
                                        
ITEM 1.   LEGAL PROCEEDINGS

     Note 3 of the Notes to Consolidated Financial Statements in Part I, Item 1
is incorporated herein by reference as if fully restated herein. Note 3 contains
forward-looking statements that are subject to the risks and uncertainties
discussed in Item 2 -- "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Cautionary Statement Regarding Risks and
Uncertainties That May Affect Future Results."


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

     (a)  Exhibits:

          3.1    Restated and Amended Certificate of Incorporation. (1)
          3.2    Restated and Amended Bylaws. (2)
          10.1   $300,000,000 Amended and Restated Credit Agreement dated March
                 12, 1998, among the Company, certain lenders and NationsBank of
                 Texas, N.A., as administrative lender. (3)
          11     Computations of Earnings Per Share. (3)
          27.1   Financial Data Schedule for the thirty-nine weeks ended 
                 March 28, 1998. (4)
          27.2   Restated Financial Data Schedules for the thirty-nine weeks 
                 ended March 29, 1997 and March 23, 1996. (4)

     (b)  Reports on Form 8-K.

          None.



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

     (1)  Previously filed as an exhibit to the Company's Quarterly Report on
          Form 10-Q for the fiscal quarter ended December 27, 1997 and
          incorporated herein by reference.
     (2)  Previously filed as an exhibit to the Company's Quarterly Report on
          Form 10-Q for the fiscal quarter ended March 26, 1994 and incorporated
          herein by reference.
     (3)  Filed herewith.
     (4)  Included with EDGAR version only.

                                       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.

                         CompUSA Inc.



Date:  May 12, 1998     By:    /s/  James E. Skinner
                           -----------------------------------------------------
                               James E. Skinner
                               Executive Vice President, Chief Financial Officer
                               and Treasurer
                               (Principal Financial and Accounting Officer and
                               Authorized Officer)

                                       17