<PAGE>
 
                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


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

                 For the quarterly period ended March 31, 1997

                                       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 0-25790

                            CREATIVE COMPUTERS, INC.
             (Exact name of registrant as specified in its charter)

      Delaware                                         95-4518700
(State or other jurisdiction               (I.R.S. Employer Identification No.) 
of incorporation or organization)


                              2645 Maricopa Street
                          Torrance, California  90503
                    (address of principal executive offices)
                                 (310) 787-4500
              (Registrant's telephone number, including area code)



Indicated 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 
                            ---         ---


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

   There were 9,776,950 outstanding shares of COMMON STOCK at April 30, 1997.
<PAGE>
 
                           Creative Computers, Inc.

                               Index to Form 10-Q

<TABLE> 
 
<S>                                                                  <C>
PART I - FINANCIAL INFORMATION                                       Page

Item 1 - Financial Statements (unaudited)

Consolidated Balance Sheet..........................................   2
 
Consolidated Statement of Operations................................   3
 
Consolidated Statement of Cash Flows................................   4
 
Condensed Notes to the Consolidated Financial Statements............   5
 
Item 2 - Management's Discussion and Analysis of Financial
         Condition and Results of Operations........................   5


PART II - OTHER INFORMATION.........................................   8

SIGNATURE...........................................................   8

</TABLE> 

                                       1
<PAGE>
 
                            Creative Computers, Inc.

                           CONSOLIDATED BALANCE SHEET
                        (in thousands except share data)
<TABLE>
<CAPTION>
 
                                                     March 31, 1997        December 31, 1996
                                                       (unaudited)
                                                     --------------        -----------------
<S>                                                  <C>                   <C>
Assets
Current assets:
Cash and cash equivalents                                $18,428               $ 17,329
Securities available for sale                                527                    521    
Accounts receivable, net of allowance for
  doubtful accounts                                       20,390                 19,948
Inventories                                               40,162                 55,092
Prepaid expenses and other current assets                  2,917                  3,410
Income tax refund receivable                                 769                  1,753
Deferred income taxes                                      4,284                  4,284
                                                         -------               --------
    Total current assets                                  87,477                102,337
Property, plant and equipment, net                        10,917                 10,909
Other assets                                                 254                    185
                                                         -------               --------
                                                         $98,648               $113,431
                                                         =======               ========
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable                                         $36,082               $ 50,770
Accrued expenses and other current liabilities             7,896                  8,684
Capital leases - current portion                             232                    243
Notes payable - current portion                               38                     40
                                                         -------               --------
    Total current liabilities                             44,248                 59,737
Capital leases                                               243                    293
Notes payable                                                 18                     32
Deferred income taxes                                        564                    564
                                                         -------               --------
    Total liabilities                                     45,073                 60,626
 
Stockholders' equity:
Common stock, $.001 par value; 15,000,000 shares
 authorized; 9,791,950 and 9,791,825 shares issued
  and outstanding                                             10                     10
Preferred stock, $.001 par value; 5,000,000 shares
   authorized; none issued and outstanding
Additional paid in capital                                53,932                 53,932
Treasury stock, at cost: 15,000 shares                       (91)                   (91)
Retained earnings (accumulated deficit)                     (276)                (1,046)
                                                         -------               --------
    Total stockholders' equity                            53,575                 52,805
                                                         -------               --------
                                                         $98,648               $113,431
                                                         =======               ========
</TABLE> 
         See condensed notes to the consolidated financial statements.

                                       2
<PAGE>
 
                            Creative Computers, Inc.

                      CONSOLIDATED STATEMENT OF OPERATIONS
                (unaudited, in thousands except per share data)
                                        
<TABLE> 
<CAPTION> 
                                               For the three months ended
                                                        March 31,
                                               --------------------------
                                                    1997        1996
                                                    ----        ----
<S>                                               <C>        <C>
Net sales                                         $120,140    $109,171
 
Cost of goods sold                                 104,692      95,949
                                                  --------    --------
 
  Gross profit                                      15,448      13,222
 
Selling, general and administrative expenses        14,286      17,460
                                                  --------    --------
 
Income (loss) from operations                        1,162      (4,238)
 
Interest income (expense), net                          79          98
                                                  --------    --------
 
Income (loss) before income taxes                    1,241      (4,140)
 
Income tax provision (benefit)                         471      (1,640)
                                                  --------    --------
 
Net income (loss)                                 $    770    $ (2,500)
                                                  ========    ========
 
Earnings (loss) per share                         $   0.08    $  (0.26)
                                                  ========    ========
 
Weighted average number of
shares outstanding                                   9,831       9,787
                                                  ========    ========
 
</TABLE>



         See condensed notes to the consolidated financial statements.

                                       3
<PAGE>
 
                            Creative Computers, Inc.

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                           (unaudited, in thousands)
<TABLE>
<CAPTION>
                                                          For the three months ended March 31,
                                                          ------------------------------------
                                                                1997                 1996
                                                          ---------------       --------------
<S>                                                       <C>                   <C>
Cash flows from operating activities:
Net income (loss)                                            $    770              $ (2,500)
Adjustments to reconcile net income (loss) to
 net cash provided by (used in) operating activities:
  Depreciation and amortization                                   514                   465
  Increase in allowance for doubtful accounts                     848                   394
  Increase (decrease) in inventory reserves                      (295)                1,866
  Changes in operating assets and liabilities:
     Accounts receivable                                       (1,290)                 (503)
     Inventories                                               15,225                 6,943
     Prepaid expenses and other current assets                    493                (1,552)
     Income tax refund receivable                                 984                  ----
     Other assets                                                 (69)                   49
     Accounts payable                                         (14,688)              (17,213)
     Accrued expenses and other current liabilities              (788)                 (757)
                                                             --------              --------
     Total adjustments                                            934               (10,308)
                                                             --------              --------
   Net cash provided by (used in) operating activities          1,704               (12,808)

Cash flows from investing activities:
   Purchases of securities available for sale                    (502)               (5,895)
   Redemptions of securities available for sale                   496                16,854
   Acquisition of property, plant and equipment                  (523)                 (849)
                                                             --------              --------
   Net cash provided by (used in) investing activities           (529)               10,110

Cash flows from financing activities:
   (Payments) borrowings under notes payable, net                 (16)                   15
   Principal payments of obligations under capital leases         (61)                  (62)
   Proceeds from stock issued under stock option plans              1                    27
                                                             --------              --------
   Net cash (used by) financing activities                        (76)                  (20)
                                                             --------              --------
Net increase (decrease) in cash and cash equivalents            1,099                (2,718)
Cash and cash equivalents:
   Beginning of period                                         17,329                13,082
                                                             --------              --------
   End of period                                             $ 18,428              $ 10,364
                                                             ========              ========
</TABLE>
         See condensed notes to the consolidated financial statements.

                                       4
<PAGE>
 
                            Creative Computers, Inc.

            CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.   Financial Statements

     The consolidated interim financial statements include the accounts of
     Creative Computers, Inc. (a Delaware corporation) and its wholly owned
     subsidiaries (the Company) and have been prepared, without audit, pursuant
     to the rules and regulations of the Securities and Exchange Commission
     (SEC). Certain information and footnote disclosures normally included in
     financial statements prepared in accordance with generally accepted
     accounting principles have been condensed or omitted pursuant to such
     regulations. Although the Company believes that the disclosures herein are
     adequate to make the information not misleading, these financial statements
     should be read in conjunction with the audited financial statements and the
     notes thereto included in the Company's Annual Report on Form 10-K at
     December 31, 1996.

     In the opinion of management, the accompanying financial statements contain
     all adjustments necessary to present fairly the financial position of the
     Company at March 31, 1997 and the results of operations and cash flows for
     the three months ended March 31, 1997 and 1996. The results of operations
     for the interim periods are not necessarily indicative of the results of
     operations for the full year.

2.   Net Income (Loss) Per Share

     Net income (loss) per share is based upon the weighted average number of
     common shares and common share equivalents outstanding during each period.
     Common share equivalents include dilutive stock options and warrants, if
     any, using the treasury stock method.

     In February 1997, the Financial Accounting Standards Board issued Statement
     of Financial Accounting Standards No. 128, "Earnings per Share" (FAS 128)
     which will become effective in the fourth quarter of 1997.  FAS 128
     replaces the presentation of earnings per share reflected on the statement
     of income with a dual presentation of Basic Earnings per Share ("Basic
     EPS") and Diluted Earnings per Share ("Diluted EPS").  FAS 128 does not
     permit early application, however, when implemented in the fourth quarter
     of 1997, it requires restatement of previously reported Earnings per Share
     for each income statement presented.  The Company does not expect the
     adoption of FAS 128 to have a material impact on its presentation of
     Earnings per Share for the first quarter of 1996 and 1997.

3.   Unusual Period End Charges

     During the quarter ended March 31, 1996, the Company experienced
     approximately $1,900,000 in losses due to theft and inventory shrinkage.
     A small portion of this total has been recovered from insurance. Customer
     fraudulent credit card charges and chargebacks also increased resulting in
     a charge of $1,300,000 during the quarter ended March 31, 1996.  In
     addition, the Company was victimized by external credit card fraud,
     including two schemes investigated by the Secret Service and others
     investigated by local law enforcement.


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

Overview

The Company began operations in May 1987 as a mail-order company and then opened
its first retail computer showroom in August 1987 and a second showroom in 1988.
These showrooms and mail-order operations primarily offered Commodore Amiga
personal computers and related products. The Company became an authorized Apple
dealer in 1991, opened two additional retail computer showrooms in the second
quarter of 1993 and relocated its original store in the fourth quarter of 1993.

                                       5
<PAGE>
 
In the fourth quarter of 1993, the Company shifted its principal distribution
and marketing focus from retail showrooms to direct mail distribution and
marketing. In March 1994, the Company received authorization from Apple to offer
the full retail line of Apple products via direct mail. The Company distributed
the first edition of its MacMall catalog in April 1994, the first edition of its
PC Mall catalog in May 1995, and the first edition of its DataCom Mall catalog
in January 1996. During 1996, the Company published thirteen editions of its
MacMall catalog with a total circulation of 30.3 million, published thirteen
editions of its PC Mall catalog with a total circulation of 15.3 million and
published six editions of its DataCom Mall catalog with a total circulation of
3.2 million.

During the fourth quarter of 1995, the Company moved its distribution center
from Torrance, CA to a new facility in Memphis, TN.  This distribution center
consists of 220,000 square feet, with an additional 105,000 square feet added
on May 1, 1997.

Net sales of the Company are primarily derived from the sale of personal
computer hardware, software, peripherals and accessories to individual
consumers, home offices, small businesses and large corporations through direct
response catalogs, dedicated inbound and outbound telemarketing sales
executives, retail showrooms and advertising on the Internet.  The Company is
dependent on sales of Apple computers and software and peripheral products used
with Apple computers.  Products manufactured by Apple represented approximately
21% of the Company's net sales for the quarter ended March 31, 1997 as compared
to 32% for the comparable quarter of 1996.


Results of Operations

Three Months Ended March 31, 1997 Compared to the Three Months Ended March 31,
1996

Net sales for the quarter ended March 31, 1997 were $120.1 million, a 10%
increase over net sales of $109.2 million for the comparable quarter in 1996.
PC/Wintel sales increased 76% from $20.5 million in last year's comparable
quarter to $36.1 million for the three months ended March 31, 1997.
Apple/Macintosh related product sales declined 5% to $84.0 million for the three
months ended March 31, 1997 as compared with $88.7 million for the comparable
period in the prior year. PC/Wintel sales comprised 30% of total net sales for
the first quarter in 1997 versus 19% for the same quarter last year. Mail
order/catalog net sales reflected an increase of 14%, from $94.2 million in the
first quarter of last year to $107.7 million for the quarter ended March 31,
1997. Total net sales increased primarily due to increased catalog circulation,
strong demand for PC/Wintel products and an increase in the number of sales
executives dedicated to new business development.

Gross profit increased by $2.2 million, or 16.8%, to $15.4 million for the
quarter ended March 31, 1997 from $13.2 million in the first quarter of 1996.
Gross profit as a percentage of net sales increased to 12.9% for the first
quarter of 1997 from 12.1% in the first quarter last year, and 12.6% in the
fourth quarter of 1996.  Gross margin improved substantially over last year's
first quarter primarily because of large write-offs from theft and inventory
shrinkage last year.  Gross margin improved over the fourth quarter due
primarily to mix of products sold and better buying. The Company shipped
approximately 264,000 mail-order/catalog orders during the three months ended
March 31, 1997 as compared to 228,000 for the same period last year.  The
Company's average order size for mail-order/catalog operations was $407 for the
three months ended March 31, 1997 as compared to $413 for the same period in
1996.

Selling, general and administrative (SG&A) expenses decreased by $3.2 million,
or 18.2%, to $14.3 million for the three months ended March 31, 1997 from $17.5
million for the comparable period in the prior year. This is primarily due to
write-offs last year of $1.3 million associated with credit card fraud and due
to significantly reduced net advertising cost this year.  As a percentage of net
sales, SG&A expenses decreased to 11.9% for the quarter from 16.0% for the
corresponding quarter in 1996. In comparison to the fourth quarter of 1996, SG&A
costs declined slightly in the first quarter but increased as a percent of net
sales from 11.1% to 11.9%.  This increase primarily came from the significant
ramp up in the number of sales executives dedicated to new business development.

                                       6
<PAGE>
 
Net interest income for the three months ended March 31, 1997 decreased by
$19,000 or 19.4%, to $79,000 compared to $98,000 for the comparable quarter in
1996.  The decrease was due to a reduction in cash invested in securities
available for sale.

Net income increased by $3,270,000 to $770,000 for the three months ended March
31, 1997 from a loss of $2,500,000 for the same period last year.


Liquidity and Capital Resources

The Company's primary capital need has been funding the working capital
requirements created by its rapid growth in sales.  Historically, the Company's
primary sources of financing have been borrowings from its stockholders, private
investors and financial institutions.  In April and August 1995, the Company
completed an initial offering and a follow-on offering of its common stock which
resulted in net proceeds to the Company of approximately $46.6 million.  As of
March 31, 1997, the Company had cash, cash equivalents and short-term
investments of  $19.0 million.

Inventories decreased to $40.2 million at March 31, 1997 from $55.1 million at
December 31, 1996.   Accounts receivable increased to $20.4 million at March 31,
1997 from $19.9 million at December 31, 1996.

During the three months ended March 31, 1997, the Company's capital expenditures
were $523,000 versus $849,000 for the comparable quarter last year.  The
Company's primary capital needs will continue to be the funding of its working
capital requirements for anticipated sales growth.

The Company has an existing credit facility of $50.0 million with a financial
institution.  At March 31, 1997, the Company had $10.6 million outstanding under
this credit facility.  The credit facility functions in lieu of a vendor trade
payable for inventory purchases and is included in accounts payable.  The
revolving credit line is cancelable upon 30 days advance notice and does not
bear interest if paid within 60 days of the date inventory is purchased.  The
credit facility is secured by substantially all of the Company's assets and
contains certain covenants which require the Company to maintain a minimum level
of tangible net worth.

In July 1996, the Company announced its plan to repurchase up to 1,000,000
shares of its Common Stock.  The shares will be repurchased from time to time at
prevailing market prices, through open market or negotiated transactions,
depending upon market conditions.  No limit was placed on the duration of the
repurchase program. There is no guarantee as to the exact number of shares that
the Company will repurchase.  Subject to applicable securities laws, repurchases
may be made at such times and in such amounts as the Company's management deems
appropriate.  The program can also be discontinued at any time management feels
additional purchases are not warranted.  The Company will finance the repurchase
plan with existing working capital.  As of March 31, 1997, the Company has
repurchased 15,000 shares.

As part of its growth strategy, the Company may, in the future, acquire other
companies in the same or complementary lines of business.  Any such acquisition
and the ensuing integration of the operations of the acquired company would
place additional demands on the Company's management and operating and financial
resources.  The Company from time to time engages in evaluation of and
discussions with third parties regarding potential acquisitions and from time to
time has submitted, and may in the future submit, proposals with respect to such
potential acquisitions.  The Company currently has no definitive agreements with
respect to any such acquisitions.

Inflation

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

                                       7
<PAGE>

Business Factors
 
Except for historical information, all of the statements, expectations and
assumptions contained in this report are forward-looking statements. The
realization of any or all of these expectations is subject to a number of risks
and uncertainties, and it is possible that the assumptions made by management
may not materialize. In addition to the factors set forth above, other important
factors that could cause actual results to differ materially from expectations
include competition from other catalog and retail store resellers and price
pressures related thereto; uncertainties surrounding the supply of and demand
for products manufactured by and compatible with Apple Computer and clones
thereof; reliance on Apple Computer, IBM, Hewlett Packard, Compaq and other
vendors; and risks due to shifts in market demand and/or price erosion of owned
inventory. This list of risk factors is not intended to be exhaustive. Reference
should also be made to the risk factors set forth from time to time in the
Company's SEC reports, including but not limited to those set forth in the
section entitled "Certain Factors Affecting Future Results" in its Annual Report
on Form 10-K for 1996.


                          Part II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------

         (a)  Exhibits

         (b)  Reports on Form 8-K

         None.


                                   SIGNATURE



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.



                                   CREATIVE COMPUTERS, INC.
 



Date:  May 12, 1997                By  /s/  Richard Finkbeiner 
                                   Richard Finkbeiner
                                   Chief Financial Officer

                                   (Duly Authorized Officer of the Registrant
                                   and Principal Financial Officer)

                                       8