<PAGE>

================================================================================

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

                                   FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
                    For the fiscal year ended January 29, 2000

[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

      For the transition period from _______________ to _________________
                          Commission File No. 0-5648

                         OSHMAN'S SPORTING GOODS, INC.
            (Exact name of Registrant as specified in its charter)

             Delaware                                 74-1031691
     (State or other jurisdiction                  (I.R.S. Employer
           of incorporation)                      Identification No.)

       2302 Maxwell Lane                                77023
         Houston, Texas                               (Zip Code)
      (Address of principal
       executive offices)

      Registrant's telephone number, including area code:  (713) 928-3171
       Securities registered pursuant to Section 12(b) of the Act:  None
          Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $1.00 par value
                               (Title of Class)

     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 ___
                             ---

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of April 20, 2000 (based upon the closing sales price as of
such date) was $4,102,891.

     Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of April 20, 2000:

                  Common Stock, $1.00 par value:  5,763,249

Documents incorporated by reference: Proxy Statement for the Registrant's
Annual Meeting of Stockholders to be held June 23, 2000 (to be filed within 120
days of the close of Registrant's fiscal year) is incorporated by reference into
Part III.

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<PAGE>

                                    PART I
Item 1.  Business.

Development of Business

     Oshman's Sporting Goods, Inc. ("Oshman's" or the "Company"), which operates
a chain of retail sporting goods specialty stores, was incorporated in Delaware
in 1946 as the successor to a proprietorship founded by J.S. Oshman in 1931.
Unless the context otherwise requires, the terms "Oshman's" and the "Company" as
used herein include the Company and its subsidiaries, whether operating under
the name "Oshman's"/(R)/ or "SuperSports USA"/(R)/.

     Since 1990, the Company has developed an innovative, interactive concept in
sporting goods retailing that it is implementing through its SuperSports USA
megastores.  The Company has transformed its business by focusing its efforts on
opening and operating SuperSports USA megastores occupying, on average,
approximately 55,000 square feet while reducing its preexisting base of
traditional stores, which currently average approximately 11,000 square feet.
SuperSports USA megastores offer a dominant selection of sporting goods in an
environment featuring a variety of "play areas" that provide customers with the
opportunity to try out sporting goods merchandise.  This "play-before-you-pay"
approach encourages customers, with the assistance of qualified sales personnel,
to purchase the equipment that best satisfies their particular needs and desires
while also providing an entertaining shopping experience.

     SuperSports USA megastores are organized as a collection of distinctive
sporting goods specialty shops.  The merchandising format and layout of each
megastore is designed to lead customers along a path through the store, in and
out of specialty shops that concentrate on specific sporting goods categories
such as in-line skating and skateboarding; skiing and snowboarding; cycling;
golf; tennis and other racquet sports; fitness and exercise equipment; hunting,
fishing, hiking and camping; and team sports such as baseball, softball,
football, basketball, hockey, soccer and volleyball.  Each specialty area
merchandises sporting equipment as well as the appropriate apparel in a
department-store style.

     At the end of fiscal 1999, the Company operated 42 SuperSports USA stores,
including 37 SuperSports USA megastores ranging in size from approximately
36,000 to 85,000 square feet and five mini SuperSports USA stores, ranging in
size from approximately 20,000 to 32,000 square feet.  The mini SuperSports USA
stores include certain "play areas" and merchandise assortments similar to the
megastores, and operate under the name SuperSports USA.  At the end of fiscal
1999, the Company also operated 15 traditional stores.  Subsequent to the end of
fiscal 1999, the Company sold an owned property in West Los Angeles, California,
and closed the  traditional store located there.  The Company's stores are
located primarily in medium to large metropolitan areas across the United
States.  In fiscal 1999, excluding results from stores closed or targeted to
close, the 42 SuperSports USA stores produced 92% of the Company's retail sales
and approximately 90% of direct store contributions.  Since the beginning of
fiscal 1990, the Company has reduced its traditional store base from 193 to 14
(taking into account one store closed in the first quarter of fiscal 2000).  See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Store Closings."  The Company operates stores

                                       2
<PAGE>

in Texas and California as well as in Arizona, Florida, Kansas, Louisiana,
Michigan, Minnesota, New Jersey, New Mexico, Oklahoma, South Carolina,
Tennessee, Utah and Washington.

     Oshman's offers a full line of sporting goods equipment, sportswear and
athletic footwear focusing on middle- to high-end products.  Nationally
advertised brand name products are featured, along with the Company's own labels
in certain categories.  While certain of the Company's primary megastore
competitors employ "every-day-low-price" strategies, the Company is a
promotional retailer.  As such, the Company seeks to attract customers into its
stores through advertised price reductions on selected merchandise.  The
following table sets forth sales of sporting goods equipment, sports apparel and
footwear as a percentage of net sales during the last three fiscal years.

                                  Percentage of Net Sales
                                 --------------------------
                                         Fiscal Year
                                         -----------
                                  1999       1998      1997
                                  ----       ----      ----
     Sporting goods equipment      54%        52%       50%
     Sports apparel                28%        30%       29%
     Footwear                      18%        18%       21%

Competition

     The market for retail sporting goods is highly competitive, fragmented and
segmented.  The Company competes with many different types of retail stores,
including full-line sporting goods chains, specialty footwear stores, warehouse-
format stores, specialty stores, discount and department stores and other stores
with a megastore format.  While its stores face competition in individual
markets from a variety of retailers, the Company believes that its greatest
competition is likely to come from other megastore operators and from warehouse-
format operations.  There can be no assurance that the Company will be able to
maintain or increase its current level of pricing, sales or profitability in
light of such competition, particularly as the Company expands into markets
served by existing competitors or as new competitors enter into the Company's
markets.  Furthermore, there is substantial competition from large-format
retailers for prime commercial locations and favorable lease terms that could
adversely affect both the Company's ability to expand and its profitability.

     The Company's ability to remain competitive is largely dependent upon its
ability to provide a selection of merchandise that appeals to its customers'
changing desires and that appropriately reflects geographical differences in
seasonality, brands and sports preferences.  A failure by the Company to
accurately identify and respond to emerging trends in sports equipment or
athletic footwear, apparel or accessories could have a material adverse effect
on the Company's financial performance and results of operations.

     Several sporting goods retailers currently operate stores with a megastore
format, including some with significantly greater resources than the Company.
In addition, there are other businesses, retailers and otherwise, with
substantially greater resources than the Company that may decide to enter the
sporting goods megastore or warehouse-format retail business.  This competition
could have a material adverse effect on the Company.

                                       3
<PAGE>

Transformation Plan

     Management believes that changing consumer preferences toward sporting
goods megastores has had a detrimental impact on the Company's existing
traditional stores and will continue to limit their potential in the future.  In
response to this trend, the Company has been focusing on opening and operating
its SuperSports USA megastores.  During fiscal 1999, the Company closed six
traditional stores.  At the end of fiscal 1999, the Company operated 42
SuperSports USA stores, including 37 SuperSports USA megastores and five mini
SuperSports USA stores, and 15 traditional stores.  Subsequent to the end of
fiscal 1999, the Company sold a traditional store in Los Angeles, California.
The Company's stores are located primarily in medium to large metropolitan areas
across the United States.  Most of the remaining traditional stores are
profitable and no further major traditional store closing program is
anticipated.  The Company currently intends to open two additional SuperSports
USA megastores in fiscal 2000 as it continues to focus on its existing store
base and improving its systems and processes.  Future store openings are,
however, dependent upon numerous factors including timing of construction and
general market conditions.

     Since the beginning of fiscal 1990 the Company has closed or converted 191
traditional stores (including one store closed in the first quarter of fiscal
2000).  Changes in the number of stores and square footage during the last ten
fiscal years are summarized below:

<TABLE>
<CAPTION>

                                                 Number of Stores                        Square Footage (at end of period)
                              ------------------------------------------------------  ---------------------------------------
                                            SuperSports
                              Traditional       USA           Stores      Operated
                                Stores         Stores       Closed or        at       Traditional  SuperSports
Fiscal Year                     Opened         Opened       Converted     Year End      Stores     USA stores       Total
-----------                   -----------  --------------  ------------  -----------  -----------  -----------  -------------
<S>                           <C>          <C>             <C>           <C>          <C>          <C>          <C>
1990........................            5            2            11          189       2,090,000      158,000      2,248,000
1991........................            2            0             8          183       2,036,000      158,000      2,194,000
1992........................            2            3            18          170       1,879,000      337,000      2,216,000
1993........................            1            3(a)         13(a)       161(a)    1,744,000      504,000      2,248,000
1994........................            0            4(a)         24(a)       141(a)    1,454,000      785,000      2,239,000
1995........................            0           12(b)         20          133(b)    1,196,000    1,439,000      2,635,000
1996........................            0            7            25          115         948,000    1,847,000      2,795,000
1997........................            0           12            51           70         438,000    2,145,000      2,583,000
1998........................            0            0             7           63         377,000    2,118,000      2,495,000
1999........................            0            2             8           57         287,000    2,175,000      2,462,000
Traditional Stores
 Converted to mini
 SuperSports USA stores (c)             -            0             5           57         172,000    2,290,000      2,462,000

  Total......................          10           45           190
</TABLE>
___________________
(a)  Includes a traditional store which was expanded and converted to a
     megastore.
(b)  Includes megastores opened at seven locations purchased from SportsTown,
     Inc.
(c)  Stores ranging in size from 19,000 to 32,000 square feet which, over the
     last several years, have been opened or converted from enlarged traditional
     stores and which operate as SuperSports USA stores.

Site Selection

     The Company subjects each potential new store location to extensive
analysis and evaluation, using its in-house staff to work with local real estate
developers and brokers.  Sites are selected primarily based on the Company's
evaluation of the potential financial return on its

                                       4
<PAGE>

investment, taking into account internally prepared sales projections, estimated
gross margins and store operating expenses as compared to required capital
expenditures and inventory investments. The Company also utilizes demographic,
geographic and competitive analyses in arriving at its estimates for sales and
gross margin. Oshman's seeks to locate stores in areas that are experiencing a
growth in population and have high concentrations of white-collar workers with
growing families and sufficient financial resources and disposable income to
devote significant spending to leisure and sporting activities. Twelve of the
Company's existing megastores serve as anchors for regional shopping malls and
shopping centers. The Company intends to continue to pursue locations that offer
this desirable marquee status and the associated benefits.

     Although the Company realizes certain economies of scale in warehousing,
distribution and advertising through the "clustering" of several stores in one
market (most notably in the Dallas/Fort Worth, Houston and Los Angeles areas),
it has also taken advantage of opportunities to successfully open and profitably
maintain single SuperSports USA megastores in certain markets and intends to
continue to pursue this flexible strategy.

Purchasing and Suppliers

     The Company purchases its merchandise directly from a diverse group of
leading domestic and international suppliers, and achieves significant
efficiencies through large quantity purchases.  The Company's largest supplier,
Nike, accounted for 11.4%, 16.0% and 17.2% of the Company's total purchases in
fiscal 1999, 1998 and 1997, respectively.  No other supplier accounted for more
than 10% of the Company's purchases in any of the last three years.

Distribution and Warehousing

     The Company utilizes a centralized distribution system operated through two
distribution centers.  One is located in Houston, Texas, and the other is
located in Santa Ana, California.  Approximately 92% of the Company's inventory
is shipped through these distribution centers.  However, for certain items that
the Company believes require more rapid delivery to stores because of higher
product turnover or other conditions, the Company uses direct delivery from
vendors.  Substantially all of the merchandise distributed to Texas, Louisiana,
Oklahoma, Kansas, Minnesota and locations east of the Mississippi River flows
through the Company's distribution center located in Houston, Texas.  The
Company's distribution center in Santa Ana, California is responsible for
distributing substantially all of the merchandise to the Company's stores in
California, Arizona, New Mexico, Utah and Washington.

Management Information Systems

     During fiscal 1996, the Company completed the installation of new financial
accounting and reporting systems and payroll and human resources systems, and in
fiscal 1997 the Company installed new sales audit software.  The Company also
installed a new IBM AS400 computer in fiscal 1997 to accommodate the new systems
and those to be installed in 1998 and further upgraded all operating systems
software in the last quarter of 1998.  During fiscal 1998, the Company upgraded
its personal computers making them year 2000 compliant.  In addition, the

                                       5
<PAGE>

Company implemented its new merchandising information and inventory management
systems in March 1999.  As a result of these acquisitions and upgrades, the
Company has updated substantially all of its computer systems with hardware and
software designed to accommodate the year 2000 and beyond.

     The Company has not experienced any material difficulties relating to the
year 2000 issue, but continues to monitor its computer systems to detect any
difficulties.

     Cumulatively, capital costs of approximately $5.0 million have been
incurred for the purchase and installation of hardware and software related to
the year 2000 issue.  Certain other internal costs incurred for work related to
year 2000 matters have not been included in the capital costs and are not
tracked separately by the Company, but such costs are included in the related
payroll costs for its information system group.  The Company does not expect
future expenditures related to the year 2000 issue to be significant for its
internal systems.

Seasonal Factors

     Oshman's business is highly seasonal, with sales generally higher in the
fourth quarter, peaking in December due to holiday shopping and the purchase of
ski equipment.  Any substantial decrease in sales during the fourth quarter
could adversely affect the Company's results of operations.  Weather conditions
add to the seasonal nature of the business, particularly with respect to ski
equipment and cold weather apparel.  The Company's results of operations may
also fluctuate on a quarterly basis as a result of seasonal variances and time
and costs associated with selecting, constructing, staffing, stocking and
opening new stores, as well as the timing of promotions.  See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Seasonality and Quarterly Fluctuations."

Trademarks and Service Marks; Other Business

     As of January 29, 2000, Oshman's owned approximately 31 trademarks and
service marks that were employed in its advertising and operations.  The Company
has registered the "Oshman's" and "SuperSports USA" trademarks.  The Company
believes that its marks are, in the aggregate, materially important in its
business and that the "Oshman's" and "SuperSports USA" marks are individually
material.  The Company anticipates that it will continue to own each of its
trademarks and service marks for so long as it finds it beneficial to use them
in connection with its operations.

     Since 1983 the Company has had a licensing agreement and consulting
arrangement with a major Japanese retailer, Ito-Yokado Co., Ltd., that currently
operates five stores in Japan under the Oshman's name.  The Company also sells
merchandise to this entity.  In fiscal 1997, it entered into a similar agreement
with Samsung Corporation, a major Korean company that operates two stores in
South Korea under the Oshman's name.  However, primarily as a result of the
economic difficulties in Asia, the implementation of the agreement with Samsung
Corporation has been deferred until June 2001.  Additionally, the sale of
merchandise under the agreement with Ito-Yokado Co., Ltd. declined significantly
in fiscal 1998 and remained flat in 1999.

                                       6
<PAGE>

     Oshman's expects the opening of the online sporting goods store at
www.oshmans.com to occur in the second quarter of fiscal 2000.  The Company has
entered into a long term agreement with Global Sports Interactive, Inc.
("Global"), pursuant to which Global is developing and will operate the e-
commerce web site for the Company.

Miscellaneous

     Oshman's typically satisfies its working capital needs out of internally
generated funds from current operations and its credit facilities as addressed
in "Management's Discussion and Analysis of Financial Condition and Results of
Operations," below.

     Inasmuch as Oshman's is a retailer, backlog is not relevant to its
business.  Oshman's does not have contracts subject to renegotiation or
termination and does not conduct any material research and development
activities.

     Federal, state and local environmental regulations have not had, and are
not expected to have, any material effect upon the expenditures, earnings or
competitive position of the Company.

     As of January 29, 2000, Oshman's employed 2,551 people including part-time
employees.

Item 2.  Properties.

     Oshman's 79,000 square foot general and executive offices are leased by the
Company and located in Houston, Texas.  A Houston warehouse and distribution
center occupies approximately 257,000 square feet of leased space in the same
building complex, and the Company also rents an office/warehouse in Santa Ana,
California, in which approximately 7,000 square feet are devoted to office space
and 151,000 square feet are used as warehouse space.  Oshman's owns property in
Houston, Texas.  In February 2000, the Company sold the property it owned in Los
Angeles, California.

     Substantially all of Oshman's retail stores occupy leased space in modern
structures.  As of January 29, 2000, these retail stores occupied an aggregate
of approximately 2,383,000 square feet of floor space under leases expiring at
various dates from 1999 to 2020 (exclusive of renewal options).  Traditional
stores on average are comprised of approximately 11,000 square feet, while the
average megastore occupies approximately 55,000 square feet.  One traditional
store and one megastore in locations owned by Oshman's occupied an aggregate of
approximately 79,000 square feet of floor space.

     Aggregate rentals paid by the Company under all its leases amounted to
approximately  $19.3 million during the 1999 fiscal year.  Most store leases
provide for rentals that are the greater of a fixed minimum amount or a
specified percentage of sales.  Oshman's owns the fixtures in its retail stores
and considers all property owned or leased to be well maintained, adequately
insured and suitable for its purposes.

                                       7
<PAGE>

Item 3.  Legal Proceedings.

     The Company is subject to certain pending legal proceedings, most of which
are ordinary and routine litigation incidental to its business.  None of such
legal proceedings, in the opinion of the Company, is material to its business or
financial condition.  The Company maintains liability insurance coverage that it
believes to be customary in the sporting goods retailing industry.

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

     Oshman's did not submit any matters to a vote of security holders during
the fourth quarter of the fiscal year ended January 29, 2000.

                                       8
<PAGE>

                     EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth the name and age of each executive officer
of the Company and all positions and offices with the Company held by each
person named:

<TABLE>
<CAPTION>
Name                             Age                     Positions and Offices Held
--------------------------       ---        ----------------------------------------------------
<S>                              <C>        <C>
Alvin N. Lubetkin                 66        Vice Chairman of the Board, Chief Executive Officer,
                                            President and Director
Marilyn Oshman                    60        Chairman of the Board and Director
Steven U. Rath                    45        Executive Vice President
Steven Martin                     50        Senior Vice President, Chief Financial Officer
Richard G. Dennis                 47        Vice President, Secretary and General Counsel
Thomas J. McVey                   48        Senior Vice President
Ray Miller                        53        Vice President, Treasurer and Assistant Secretary
Richard L. Randall                57        Vice President, General Merchandise Manager
</TABLE>

     Mr. Lubetkin has been an officer of the Company since 1966 and a Director
since 1962.  Mr. Lubetkin has overall responsibility for the Company's
operations.  He was originally hired by the Company in 1961.

     Ms. Oshman was elected Chairman of the Board in April 1993 and has been a
Director of the Company since 1979.  She has been employed by the Company since
1990.

     Mr. Rath was elected as a Vice President of the Company in 1992 and
Executive Vice President in April 1998.  In addition to his primary
responsibilities for the real estate and construction functions, Mr. Rath
assumed an expanded management role in the overall operations.  In 1999, he
assumed oversight responsibility for the operations and e-commerce functions of
the Company.  Prior to becoming Vice President of the Company, Mr. Rath served
as a Divisional Vice President for Corporate Development (1990-1992), and
Director of Corporate Development (1988-1989).  Before joining the Company, Mr.
Rath was Director of Research and Strategic Planning for the Foley's Division of
Federated Department Stores, Inc.

     Mr. Martin joined the Company and was elected Senior Vice President, Chief
Financial Officer in November of 1999.  He is primarily responsible for
overseeing finance, systems, planning and sales strategy for the Company.  Prior
to joining the Company, from mid-1997 Mr. Martin managed his own company, Martin
Strategic Consulting in St. Charles, Illinois.  Prior to that, he was Executive
Vice President and Chief Financial Officer with Sun Television and Appliances,
Inc. in Columbus, Ohio for one year.  Before that, he was Vice President of
Strategy and Business Development for Sears, Roebuck and Co. in Hoffman Estates,
Illinois since early 1993.  Mr. Martin has also held various other financial
planning positions with Humana Inc. and BATUS, Incorporated in Louisville,
Kentucky, as well as Armco, Inc. in Middletown, Ohio.

     Mr. Dennis was elected Vice President in June 1994 and Secretary in July
1996.  Mr. Dennis has also served as General Counsel of the Company since 1993.
In 1999, he assumed responsibility for overseeing the human relations area of
the Company.  Prior to that, he was

                                       9
<PAGE>

employed as Managing Attorney, Banc One New Hampshire Asset Management Company
from 1992 to 1993 and Associate Attorney, Weil, Gotshal & Manges from 1986 until
1992.

     Mr. McVey was elected Vice President of the Company in March 1996 and
Senior Vice President in June 1997.  He is primarily responsible for store
operations.  Since 1994, Mr. McVey has served as divisional Senior Vice
President and Regional Manager.  Prior to that time, he was regional Vice
President from 1989 to 1994.

     Mr. Miller was elected Treasurer in July 1996, Assistant Secretary in
January 1997 and  Vice President in May 1997.  He originally joined the Company
in 1976, serving in various accounting and treasury positions.  In June of 1990,
Mr. Miller left the Company and joined Profit Recovery Group, a contingency
audit firm, where he was employed until September of 1993, at which time he
rejoined the Company.

     Mr. Randall joined the Company and was elected Vice President, General
Merchandise Manager in May of 1998.  He is primarily responsible for the
merchandising and advertising functions of the Company.  Prior to joining the
Company, Mr. Randall was Vice President of Merchandising for Hills Department
Stores, where he was employed for approximately four years.  Prior to that, Mr.
Randall was employed by Pace Warehouse Clubs for approximately two years and
B.J.'s Wholesale Clubs for approximately six years in a merchant vice president
capacity.

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

     The Common Stock of the Company has been listed on the American Stock
Exchange under the symbol "OSH" since June 21, 1995.  Prior to that date, the
Common Stock of the Company was quoted on The Nasdaq Stock Market.  The
following table sets forth the quarterly high and low reported sales prices per
share for the Common Stock:

<TABLE>
<CAPTION>
                                              High       Low
                                             ------     ------
<S>                                          <C>        <C>

Fiscal Year ending January 30, 1999
First Quarter ended May 2, 1998               $6.75      $4.25
Second Quarter ended August 1, 1998            9.38       5.63
Third Quarter ended October 31, 1998           8.69       3.88
Fourth Quarter ended January 30, 1999          4.75       2.88

Fiscal Year ending January 29, 2000
First Quarter ended May 1, 1999               $3.38      $2.25
Second Quarter ended July 31, 1999             3.13       2.50
Third Quarter ended October 30, 1999           2.63       1.88
Fourth Quarter ended January 29, 2000          2.19       1.38

Fiscal Year ending February 3, 2001
First Quarter through April 20, 2000          $2.81      $1.56
</TABLE>

     As of April 20, 2000, there were approximately 550 holders of record of
the Common Stock.  The last reported sale price for the Common Stock on the
American Stock Exchange composite tape as of April 20, 2000, was $1.75.

                                       10
<PAGE>

     The Board of Directors of the Company suspended the payment of dividends in
March 1991 and does not anticipate paying dividends in the foreseeable future.
The Company's credit agreement with CIT places certain limitations and
restrictions on the Company's ability to pay dividends on the Common Stock.

Item 6.  Selected Financial Data.

     The following table provides selected consolidated financial information
for the Company's last five fiscal years.

<TABLE>
<CAPTION>
                                                                      For the year ended
                                                                    or as of the year end
                                           January 29,     January 30,     January 31,     February 1,     February 3,
                                              2000            1999            1998            1997            1996
                                           (52 Weeks)      (52 weeks)      (52 weeks)      (52 weeks)      (53 weeks)
                                        ----------------  ------------    ------------    ------------    ------------
                                                                     (in thousands, except per share data)
<S>                                     <C>               <C>             <C>             <C>             <C>
Consolidated Sales                             $306,492      $309,057        $342,609        $365,879        $342,889
Net Earnings (Loss)                              (3,630)       (1,351)          6,372*        (27,250)          1,942
Net Basic Earnings (Loss) per Share                (.62)        (0.23)           1.09           (4.67)           0.33
Net Diluted Earnings (Loss) per Share              (.62)        (0.23)           1.07           (4.67)           0.32
Dividends per Share                                  --            --              --              --              --
Total Assets                                    132,665       126,004         148,350         160,734         162,923
Long-Term Debt                                   37,463        28,679          35,953          42,397          36,681
</TABLE>

_______________________
*    Excludes loss of $1,299 from cumulative effect of change in accounting
     method for pre-opening expenses.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Overview

     The Company has been in operation since 1931, having been incorporated in
1946 as the successor to a proprietorship founded by J.S. Oshman. After building
a base in Texas, where it is headquartered, the Company expanded into other
states across the Sun Belt, growing from 11 stores in 1970 to 193 stores at the
beginning of fiscal 1990. In fiscal 1990, the Company opened its first two
SuperSports USA megastores.  The changing nature of retailing and the new
competitive challenges in the sporting goods sector had started to affect the
results of the Company's traditional stores.  Starting in 1990, the Company has
transformed its business by focusing on opening and operating SuperSports USA
megastores occupying, on average, approximately 55,000 square feet, while
reducing its pre-existing base of traditional stores, which currently average
approximately 11,000 square feet.  In fiscal 1999, the Company opened megastores
in Auburn Hills, Michigan and Elizabeth, New Jersey.    At year-end the Company
operated 42 SuperSports USA stores, including 37 SuperSports USA megastores,
five mini SuperSports USA stores and 15 traditional stores.  Subsequent to the
end of fiscal 1999, the Company sold an owned property in West Los Angeles and
closed the traditional store located there.  The Company's stores are located
primarily in medium to large metropolitan areas, in Texas and California as well
as in Arizona, Florida, Kansas, Louisiana, Michigan, Minnesota, New Jersey, New
Mexico, Oklahoma, South Carolina, Tennessee, Utah and Washington.

                                       11
<PAGE>

Store Closings

     In the fourth quarter of fiscal 1996, the Company announced a plan to close
53 of its traditional stores during fiscal 1997.  The Company recorded a store
closing provision and asset impairments of $13.6 million to cover lease
termination costs ($5.2 million), employee costs and other incremental store
closing costs ($839,000), inventory adjustments ($6.3 million) and leasehold and
other asset write-offs ($1.3 million).  Forty-four of these stores were closed
in fiscal 1997, six in 1998 and one in 1999.  The remaining two stores are
expected to continue to operate due to the Company's inability to terminate the
leases on a satisfactory basis.

     In addition to the 51 store closings in the group of stores discussed
above, the Company also closed seven stores in 1999, including a megastore and a
mini SuperSports USA store, one store in 1998 and seven stores in fiscal 1997,
including one megastore.  These stores were not part of the original group of
53.  The company believes that its store closing program is substantially
complete and does not anticipate closing large numbers of additional stores at
this time.

     At the end of fiscal 1999, the Company had reserves of approximately $1.2
million, which its management believes are sufficient, to cover estimated
incremental costs associated with anticipated store closings and remaining
obligations from stores previously closed.

Impairment of Long-Lived Assets

     In the fourth quarter of fiscal 1998, the Company recorded a charge of $3.0
million to write down the carrying value of assets in four California
SuperSports USA megastores and two traditional stores located in Texas to fair
value under the requirements of FASB 121, Accounting for the Impairment of Long-
Lived Assets and Long-Lived Assets to be Disposed of. The impairment loss is
related primarily to the California megastores.

High Impact Shoe Department

     During 1999, the Company began to convert many of its shoe departments to a
new high impact format.  This process, which will be completed in 2000, has
resulted in substantial improvement in sales within these departments.

New Merchandising Management System

     During 1999, the Company installed a new merchandise management system.
Conversion difficulties may have adversely affected results, but such problems
have been solved and the Company now believes that the system greatly enhances
its ability to manage its inventory assets.

                                       12
<PAGE>

Stock Repurchase

     On March 27, 2000 the Company announced a stock buyback program whereby up
to 150,000 shares (or 2.6% of the issued and outstanding shares) of its common
stock may be repurchased by the Company.  The repurchased shares are to be
reserved for future issuance in connection with employee incentive or stock
option plans.

Results of Operations

     The following table sets forth selected statements of operations data of
the Company expressed as a percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>
                                                       Percentage of Net Sales
                                                             Fiscal Year
                                                  1999       1998      1997
                                                 ------     ------    ------
<S>                                              <C>        <C>       <C>
Net Sales                                         100.0     100.0      00.0
Cost of goods sold                                 65.8      65.8      65.6
                                                 ------     ------    ------
     Gross profit                                  34.2      34.2      34.4
Operating expenses:
     Selling and administrative expenses           34.3      34.4      34.2
     Pre-opening expenses                            .2         -        .4
     Impairment of long-lived assets                  -       1.0         -
     Store closing provision                          -       (.2)      (.2)
     Miscellaneous income                           (.1)     (1.4)     (1.8)
                                                 ------     ------    ------
        Operating income (loss)                     (.2)       .4       1.8
Interest expense, net                               1.0       1.0       1.1
                                                 ------     ------    ------
Income (loss) before income taxes and
  cumulative effect of change in accounting
  method for pre-opening expenses                  (1.2)      (.7)       .7
Income tax (benefit)                                  -       (.2)     (1.2)
                                                 ------     ------    ------
Income (loss) before cumulative effect of
  change in accounting method for
  pre-opening expenses                             (1.2)      (.4)      1.9
Cumulative effect of change in accounting
  method for pre-opening expenses                     -         -       (.4)
                                                 ------     ------    ------
Net earnings (loss)                                (1.2)      (.4)      1.5
                                                 ------     ------    ------
</TABLE>

Fiscal 1999 Compared to Fiscal 1998

     Net sales for fiscal 1999 decreased less than 1% to $306.5 million from
$309.1 million in 1998.  The net reduction in sales is due to stores closed in
1999 and 1998.  Comparable store sales increased almost 1% between years.  The
conversion of some stores to the high impact format in the shoe department aided
in this comparable store sales increase.  However, unusually warm weather in the
fourth quarter hurt sales in the ski and apparel areas.  Gross profit on these
sales remained steady between years.

                                       13
<PAGE>

     Selling and administrative expenses as a percentage of net sales were 34.3%
in fiscal 1999 compared to 34.4% in fiscal 1998.  This decrease is primarily due
to sales growth outpacing selling and administrative expense growth in on-going
stores along with the closing of the more inefficient stores.  Selling and
administrative expenses in the overhead area also showed a decrease due to the
capitalization of handling costs during the first few months of the year, but
this decrease was offset by a corresponding decrease in the inventory cap
reclassification.

     The Company recorded an impairment loss of $3.0 million in fiscal 1998
related primarily to megastores in the Los Angeles/Orange County, California
area.  No such impairment was recorded in 1999.  See the disclaimer above under
"Impairment of Long-Lived Assets."

     The Company had pre-opening expenses of $722,000 in 1999 which amounted to
0.2% of sales.  No pre-opening expenses were recorded in 1998, since the Company
did not open any new stores in that year.

     There was no benefit from the store closing provision in 1999, while the
Company did record a benefit of $499,000 in fiscal 1998.  At the end of 1999,
management believed that its store closing reserve was adequate.

     The major components of miscellaneous income for fiscal 1999 and fiscal
1998 are set out in the table below:

                                                             Fiscal Year
                                                           ---------------
                                                            1999    1998
                                                           ------  -------
                                                           (in thousands)
     Gain on sale of real estate and leasehold interest    $   -   $3,914
     Fees from foreign licensees                             442      467
     Other, net                                             (120)    (118)
                                                           -----   ------
     Total                                                 $ 322   $4,263
                                                           =====   ======

     Net interest expense for fiscal 1999 was $3.0 million, compared to $3.2
million in fiscal 1998. The decreased interest expense in fiscal 1999 is
primarily related to reduced interest rates and lower average borrowings under
the Company's credit facility.

     The income tax benefit in fiscal 1998 included a benefit related to the
refund of prior year income taxes of $686,000.  No federal income tax benefit
was recorded relative to the Company's loss before income taxes in 1999 or 1998
due to valuation allowances recorded against the deferred tax assets generated
by the losses.

     In fiscal 1999, the Company had a loss of $3.6 million before income taxes
compared to a loss of $2.1 million in fiscal 1998.  The net loss in 1999
includes $722,000 in costs related to the opening of two new stores.  No new
stores were opened in 1998.  Additionally, fiscal 1998 received a net benefit of
$1.6 million from unusual items, including a $3.0 million charge for impairment
of long-lived assets, a $3.9 million gain from sale of real estate and leasehold
interests, and a $686,000 benefit related to refund claims filed for prior year
federal income taxes.

                                       14
<PAGE>

Fiscal 1998 Compared to Fiscal 1997

     Net sales for fiscal 1998 decreased 9.8% to $309.1 million from $342.6
million in 1997.  The net reduction in sales is primarily attributable to lost
sales from stores closed in fiscal 1997 and 1998 ($29.2 million) (see the
disclaimer above under "Store Closings") and a comparable store sales decline of
6.1% in continuing stores.  Management attributes the decline in comparable
store sales to several factors including lower inventory levels related to the
Company's efforts to increase margins and improve inventory turnover rates,
reduced advertising expenditures and increased competition.  Additionally, the
relatively soft market in 1998 for footwear and golf equipment, as well as a
weak Christmas selling season in the sporting goods industry, further
contributed to the decline in sales.

     Gross profit, as a percentage of net sales, was 34.2% in fiscal 1998
compared to 34.4% in 1997.  Gross margins in the fourth quarter of 1998 declined
approximately 2 points, as a percentage of sales, compared to 1997, primarily as
a result of lower than expected Christmas sales and higher than expected
footwear markdowns.

     Selling and administrative expenses as a percentage of net sales were 34.4%
in fiscal 1998, compared to 34.2% in fiscal 1997. Comparable store selling and
administrative costs, as well as corporate overhead and distribution costs were
reduced approximately $5.1 million in fiscal 1998 compared to fiscal 1997.
However, the reductions were not sufficient to overcome the effect of the lower
sales levels.

     The Company recorded an impairment loss of $3.0 million in fiscal 1998
related primarily to its megastores in the Los Angeles/Orange County, California
area.  See "Impairment of Long-Lived Assets."

     The Company had no pre-opening expenses in fiscal 1998 as no new stores
were opened.  Pre-opening expenses as a percentage of net sales were 0.4% in
fiscal 1997.  Prior to fiscal 1997, the Company's accounting policy with regard
to pre-opening expenses of new stores was that expenses related to stores larger
than 25,000 square feet in size (anticipated to be only SuperSports USA
megastores) would be deferred and amortized over a one year period subsequent to
the store opening.  Effective at the beginning of fiscal 1997, the Company
changed its policy to require that non-capital expenses related to the opening
of new stores, regardless of size, be charged to expense as incurred.
Accordingly, the Company took a charge in the first quarter of fiscal 1997 of
$1.3 million related to pre-opening expenses of megastores opened in fiscal
1996.

     Store closing provision was a benefit of $499,000 in fiscal 1998 compared
to a benefit of $836,000 in 1997.  The benefit in both years is related to
management's re-evaluation of store closing reserves for lease termination
costs, leasehold and other asset writeoffs and other incremental store closing
costs.  See "Store Closings."

                                       15
<PAGE>

     The major components of miscellaneous income for fiscal 1998 and fiscal
1997 are set out in the table below:

                                                             Fiscal Year
                                                           ----------------
                                                            1998     1997
                                                           -------  -------
                                                            (in thousands)
     Gain on sale of real estate and leasehold interest    $3,914   $5,616
     Fees from foreign licensees                              467    1,199
     Other, net                                              (118)    (769)
                                                           ------   ------
     Total                                                 $4,263   $6,046
                                                           ======   ======

     Net interest expense for fiscal 1998 was $3.2 million, compared to $3.7
million in fiscal 1997. Net interest expense in fiscal 1997 includes interest
income of $662,000 related to a Federal income tax refund. The decreased
interest expense in fiscal 1998 is primarily related to reduced interest rates
and lower average borrowings under the Company's credit facility.

     The income tax benefits in fiscal 1998 and 1997 include benefits related to
refunds of prior years Federal income taxes of $686,000 and $4.1 million
respectively.  In 1998, no Federal Income tax benefit was recorded relative to
the Company's loss before income taxes due to valuation allowances recorded
against the deferred tax assets generated by the losses.  No tax expense was
recorded related to 1997 due to the partial utilization of prior net operating
losses, which had been primarily subject to a valuation allowance.

     In fiscal 1998, the Company had a loss of $2.1 million before income taxes
and cumulative effect of change of accounting method for pre-opening expenses
compared to income of $2.4 million in fiscal 1997.  Significant factors
contributing to the loss in fiscal 1998 compared to fiscal 1997 are (i) the
decline in comparable store sales, (ii) the impairment loss in 1998 and (iii)
reduced gains from the sale of real estate and leasehold interests compared to
fiscal 1997, partially offset by (iv) reduced costs related to stores opened in
fiscal 1997.

                                       16
<PAGE>

Seasonality and Quarterly Fluctuations

     The following table sets forth certain unaudited financial information for
the Company for each of the quarterly periods in fiscal 1999 and fiscal 1998:

<TABLE>
<CAPTION>
                                                           Fiscal 1999
                                        ------------------------------------------------
                                   First             Second            Third            Fourth
                                  Quarter           Quarter           Quarter           Quarter
                              ----------------  ----------------  ----------------  ---------------
                                                     (dollars in thousands)
<S>                           <C>               <C>               <C>               <C>
Net sales                            $71,374           $76,274           $65,137           $93,707
Gross profit                         $25,162           $26,211           $23,282           $30,265
Gross margin                            35.3%             34.4%             35.7%             32.3%
Operating income (loss)              $   131           $  (309)          $(2,772)          $ 2,330
Operating margin                         0.2%             (0.4%)            (4.3%)             2.5%
Net income (loss)                    $  (497)          $(1,014)          $(3,606)          $ 1,487
Net income (loss) margin                (0.7%)            (1.3%)           (5.5)%              1.6%
</TABLE>

<TABLE>
<CAPTION>
                                                           Fiscal 1998
                                        ------------------------------------------------
                                   First            Second            Third             Fourth
                                  Quarter           Quarter          Quarter           Quarter
                              ----------------  ---------------  ----------------  ----------------
                                                    (dollars in thousands)
<S>                           <C>               <C>              <C>               <C>
Net sales                            $72,140           $79,032          $64,312           $93,573
Gross profit                         $25,380           $26,847          $24,079           $29,474
Gross margin                            35.2%             34.0%            37.4%             31.5%
Operating income (loss)              $  (149)          $ 4,094          $(1,704)          $(1,094)
Operating margin                        (0.2%)             5.2%            (2.6%)            (1.2%)
Net income (loss)                    $(1,124)          $ 3,420          $(2,015)          $(1,632)
Net income (loss) margin                (1.6%)             4.3%            (3.1%)            (1.7%)
</TABLE>

     During fiscal 1999, 1998 and 1997, 30.6%, 30.3% and 29.7%, respectively, of
the Company's sales were generated during the fourth quarter.  As a result of
the increased sales, the Company's operating results for the fourth quarter
generally exceed the operating income for any other quarter during these fiscal
years. However, this did not occur in fiscal 1998, primarily as a result of a
real estate gain recognized in the second quarter of the year, an impairment
loss recorded in the fourth quarter of the year and a disappointing Christmas
selling season.

                                       17
<PAGE>

Comparable Store Sales

     The following table sets forth for the fiscal years 1999, 1998 and 1997
certain information regarding the percentage increase (decrease) in comparable
store sales for comparable 52 week periods.

                             Fiscal 1999
     ---------------------------------------------------
      First     Second      Third      Fourth               Fiscal     Fiscal
     Quarter    Quarter    Quarter     Quarter     Year      1998       1997
    ---------  ---------  ---------   ---------  -------- ----------  ---------
      0.0%       (1.5)%      3.5%        1.7%      0.9%      (6.1)%     (3.7)%

     Management attributes the increase in comparable store sales to several
factors including improved performance in footwear in stores where high impact
shoe departments have been installed.  However, these increases were partially
offset by unusually warm winter weather which adversely affected the sales in
the ski and apparel areas.

Liquidity and Capital Resources

     In fiscal 1999, operating activities used cash totaling $4.3 million.  The
primary uses of cash were increases in inventories of $7.2 million and a
decrease in trade accounts payable of $3.4 million.  These uses were partially
offset by an increase in accrued liabilities of $5.5 million.  Investing
activities used cash of $4.5 million due to the purchase of $6.6 million of
property, plant and equipment which were offset by developer provided funds of
$2.0 million.  Financing activities provided $8.8 million, mainly through
utilization of the Company's credit facility.

     Merchandise inventories increased 9.3%, to $94.2 million at the end of
fiscal 1999 from $86.2 million at the end of fiscal 1998.  With the transition
to a new merchandise management system now completed, the Company expects the
system to improve inventory productivity and inventory should decrease.

     Additions to property, plant and equipment were $6.6 million in fiscal
1999.  The Company opened two new stores during the year and expenditures
related to these openings were approximately $1.6 million.  Approximately $2.3
million was used for computer hardware and software, including expenditures for
new merchandising systems software, network upgrades and store radio frequency
installation.  About $2.7 million was used for various store, warehouse and
administrative renovation and refurbishment projects including the installation
of the high impact shoe departments.

     On August 31, 1992, the Company entered into an agreement providing for a
three-year, $32.5 million revolving credit facility with The CIT Group/Business
Credit, Inc.  Advances under the facility are based on a borrowing base formula,
and subject to certain loan reserves.  The facility is secured primarily by
inventory, accounts receivable and real estate.  The credit agreement includes
various restrictions, requirements and financial covenants.  During 1996, the
agreement was amended to increase the revolving line of credit to $65.0 million,
with a further seasonal increase to $80.0 million during the period from mid-
September through mid-December each year.  In addition, the Company may, at its
option, increase the line of credit by an additional $5.0 million.

                                       18
<PAGE>

In fiscal 1998, the agreement was amended to among other things, reduce interest
rates under the agreement and to extend the term of the agreement until August
31, 2001. As of January 29, 2000, the Company was in breach of two of its
financial covenants, but has subsequently obtained a waiver from CIT and is no
longer in breach of any covenants.

     The Company's primary source of liquidity in fiscal 1999 was the Company's
credit facility, under which average borrowings during the year were $37.9
million.  Because of the seasonal nature of its business and the build up in
inventory for the Christmas shopping season, the amount of outstanding
borrowings and letters of credit under the Company's credit facility is
typically highest in November and reached $56.1 million in November 1999.  At
January 29, 2000, the Company had recorded debt with respect to its credit
facility of $37 million and had outstanding letters of credit (used primarily to
purchase certain of the Company's imported inventory) of $582,000.

     The Company believes that its existing revolving credit facilities together
with cash flow from operations will be adequate to meet anticipated capital
needs, including seasonal financing needs for fiscal 2000.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

     In the normal course of business, the financial position of the Company is
exposed to minimal market risk associated with interest rate movements on
borrowings under the Company's credit facility with The CIT Group/Business
Credit, Inc.  A one percent increase or decrease in the levels of interest rates
on variable rate debt with all other variables held constant would not result in
a material change to the Company's result of operations.

Disclosure Regarding Forward-Looking Statements

     The information discussed herein includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.  All statements
other than statements of historical facts included herein regarding expected
direct store profits, returns on investment, estimated operating costs,
comparable store sales, planned capital expenditures, store openings and
closings, the Company's financial position, business strategy and other plans
and objectives for future operations (typically using words and phrases such as
"expect," "plan," "forecast," "anticipate," "should approximate," "believe,"
"intend" or similar expressions), are forward-looking statements.  Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, they do involve certain assumptions, risks and
uncertainties, and the Company can give no assurance that such expectations will
prove to have been correct.  The Company's actual results could differ
materially from those anticipated by such forward-looking statements as a result
of certain factors, including: the Company's ability to manage its expansion
efforts in existing and new markets, availability of suitable new store
locations at acceptable terms, levels of discretionary consumer spending,
availability of merchandise to meet fluctuating consumer demands, customer
response to the Company's merchandise offerings, fluctuating sales margins,
increasing competition in sporting goods and apparel retailing, the results of
financing efforts and financial market conditions.  Many of such

                                       19
<PAGE>

factors are beyond the Company's ability to control or predict. Readers are
cautioned not to put undue reliance on forward-looking statements. The Company
disclaims any intent or obligations to update these forward-looking statements,
whether as a result of new information, future events or otherwise.

                                       20
<PAGE>

                                   PART III

     In accordance with paragraph (3) of General Instruction G to Form 10-K,
Part III of this Report is omitted because the Company will file with the
Securities and Exchange Commission not later than 120 days after the end of the
fiscal year ended January 29, 2000 a definitive proxy statement pursuant to
Regulation 14A involving the election of directors, which proxy statement is
incorporated herein by reference.

                                       21
<PAGE>

                                    PART IV

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K.

<TABLE>
<CAPTION>

                                                                                                 Page
(a)    1.  Financial Statements                                                                Reference
           --------------------                                                                ---------
<S>                                                                                            <C>
       Report of Independent Certified Public Accountants.................................            23
       Consolidated balance sheets at January 29, 2000 and January 30, 1999                           25
       Consolidated statements of operations for the years ended January 29, 2000,
       January 30, 1999, and January 31, 1998.............................................            26
       Consolidated statement of stockholders' equity for the years ended
       January 31, 1998, January 30, 1999, and January 29, 2000...........................            27
       Consolidated statements of cash flows for the years ended January 29, 2000,
       January 30, 1999, and January 31, 1998.............................................            28
       Notes to consolidated financial statements.........................................            29
       Selected quarterly financial data..................................................            45

       2.  Financial Statement Schedules
           -----------------------------

       Schedule II - Allowance for Doubtful Receivables - Years ended
       January 29, 2000, January 30, 1999, and January 31, 1998...........................            46
</TABLE>

     All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the financial
statements or the notes thereto.

     3.  List of Exhibits
         ----------------

     See index to exhibits immediately following the signature page.

     The Registrant will furnish to stockholders a copy of any exhibit upon
payment of $.20 per page to cover the expense of furnishing such copies.
Requests should be directed to Steven Martin, Oshman's Sporting Goods, Inc.,
P.O. Box 230234, Houston, Texas 77223-0234.

(b)  Reports on Form 8-K
     -------------------

     The Company filed no reports on Form 8-K during the last quarter of the
fiscal year ended January 29, 2000.

                                       22
<PAGE>

              Report of Independent Certified Public Accountants
              --------------------------------------------------

Board of Directors and Stockholders
Oshman's Sporting Goods, Inc.

     We have audited the accompanying consolidated balance sheets of Oshman's
Sporting Goods, Inc. (a Delaware corporation) and Subsidiaries as of January 29,
2000 and January 30, 1999, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the three years in
the period ended January 29, 2000.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

   We conducted our audits in accordance with auditing standards generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe our audits provide a reasonable
basis for our opinion.

   In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Oshman's Sporting
Goods, Inc. and Subsidiaries as of January 29, 2000 and January 30, 1999, and
the consolidated results of their operations and their consolidated cash flows
for each of the three years in the period ended January 29, 2000, in conformity
with accounting principles generally accepted in the United States.

                                       23
<PAGE>

   We have also audited Schedule II of Oshman's Sporting Goods, Inc. and
Subsidiaries for each of the three years in the period ended January 29, 2000.
In our opinion, this schedule presents fairly, in all material respects, the
information required to be set forth therein.


GRANT THORNTON LLP


Houston, Texas
March 15, 2000

                                       24
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                         CONSOLIDATED BALANCE SHEETS
                    January 29, 2000 and January 30, 1999
                            (Dollars in thousands)

<TABLE>
<CAPTION>
                         ASSETS                          1999       1998
                                                       --------   --------
<S>                                                    <C>        <C>
CURRENT ASSETS
 Cash and cash equivalents                             $    321   $    356
 Accounts receivable, less allowance of $88 in 2000
   and in 1999                                            1,750      1,496
 Merchandise inventories                                 94,157     86,184
 Prepaid expenses and other                                 466      2,453
                                                       --------   --------

     Total current assets                                96,694     90,489

PROPERTY, PLANT AND EQUIPMENT - AT COST                  87,103     87,262
 Less accumulated depreciation and amortization          51,140     52,014
                                                       --------   --------

                                                         35,963     35,248
OTHER ASSETS                                                  8        267
                                                       --------   --------

                                                       $132,665   $126,004
                                                       ========   ========

            LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Current maturities of long-term obligations           $     58   $      -
 Trade accounts payable                                  30,094     33,478
 Accrued liabilities                                     20,998     15,919
 Store closing reserve                                    1,044      1,022
                                                       --------   --------

     Total current liabilities                           52,194     50,419

LONG-TERM OBLIGATIONS                                    37,463     28,679

OTHER NONCURRENT LIABILITIES                              6,643      6,911

STOCKHOLDERS' EQUITY
 Common stock                                             5,830      5,830
 Additional capital                                       4,210      4,210
 Retained earnings                                       26,346     29,976
   Less:  Treasury stock, at cost                           (21)       (21)
                                                       --------   --------

                                                         36,365     39,995
                                                       --------   --------

                                                       $132,665   $126,004
                                                       ========   ========
</TABLE>

See notes to consolidated financial statements.

                                       25
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                     CONSOLIDATED STATEMENTS OF OPERATIONS
      Years ended January 29, 2000, January 30, 1999 and January 31, 1998
               (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                         1999       1998       1997
                                                       ---------  ---------  ---------
<S>                                                    <C>        <C>        <C>
Net sales                                              $306,492   $309,057   $342,609

Cost of goods sold                                      201,572    203,277    224,620
                                                       --------   --------   --------
   Gross profit                                         104,920    105,780    117,989

Operating expenses
 Selling and administrative expenses                    105,140    106,396    117,264
 Pre-opening expenses                                       722          -      1,525
 Impairment of long-lived assets                              -      3,000          -
 Store closing provision                                      -       (499)      (836)
 Miscellaneous income                                      (322)    (4,263)    (6,046)
                                                       --------   --------   --------

     Operating income (loss)                               (620)     1,146      6,082

Interest expense, net                                     3,011      3,241      3,711
                                                       --------   --------   --------

(Loss) earnings before income taxes                      (3,631)    (2,095)     2,371

Income tax benefit                                           (1)      (744)    (4,001)
                                                       --------   --------   --------
 (Loss) earnings before cumulative effect of change
   in accounting principle                               (3,630)    (1,351)     6,372

Cumulative effect of change in accounting principle
for pre-opening expenses                                      -          -     (1,299)
                                                       --------   --------   --------

     NET (LOSS) EARNINGS                               $ (3,630)  $ (1,351)  $  5,073
                                                       ========   ========   ========
(Loss) earnings per share
 (Loss) earnings before cumulative effect of change
   in accounting principle
   Basic (loss) earnings per share                     $   (.62)  $   (.23)  $   1.09
   Diluted (loss) earnings per share                   $   (.62)  $   (.23)  $   1.07
 Cumulative effect to February 2, 1997 of change
   in accounting principle for pre-opening expenses
   Basic (loss) earnings per share                     $      -   $      -   $   (.22)
   Diluted (loss) earnings per share                   $      -   $      -   $   (.22)
 Net (loss) earnings per share
   Basic (loss) earnings per share                     $   (.62)  $   (.23)  $    .87
   Diluted (loss) earnings per share                   $   (.62)  $   (.23)  $    .85
</TABLE>

                                       26
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      Years ended January 31, 1998, January 30, 1999 and January 29, 2000
                                (In thousands)

<TABLE>
<CAPTION>
                                Common stock   Treasury   Additional  Retained
                               --------------
                               Shares  Amount    stock     capital    Earnings
                               ------  ------  ---------  ----------  ---------
<S>                            <C>     <C>     <C>        <C>         <C>
Balance at February 1, 1997     5,830  $5,830    $   (21)     $4,068   $26,254
Compensation under stock
 option and stock bonus
 plans                              -       -         -          109         -
Net earnings for the year           -       -         -            -     5,073
                                -----  ------    ------       ------   -------
Balance at January 31, 1998     5,830   5,830       (21)       4,177    31,327
Compensation under stock
 option and stock bonus
 plans                              -       -         -           33         -
Net loss for the year               -       -         -            -    (1,351)
                                -----  ------    ------       ------   -------
Balance at January 30, 1999     5,830   5,830       (21)       4,210    29,976
Net loss for the year               -       -         -            -    (3,630)
                                -----  ------    ------       ------  --------
Balance at January 29, 2000     5,830  $5,830    $  (21)      $4,210  $ 26,346
                                =====  ======    ======       ======  ========
</TABLE>

See notes to consolidated financial statements.

                                       27
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
      Years ended January 29, 2000, January 30, 1999 and January 31, 1998
                            (Dollars in thousands)
<TABLE>
<CAPTION>
                                                                       1999           1998          1997
                                                                     ---------      ---------     --------
<S>                                                                  <C>            <C>           <C>
Cash flows of operating activities
 Net (loss) earnings                                                 $ (3,630)      $ (1,351)     $  5,073
 Adjustments to reconcile net cash provided (used)
   by operating activities
   Depreciation and amortization                                        6,340          7,181         7,180
   Cumulative effect of change in accounting principle for
     pre-opening costs                                                      -              -         1,299
   Charge to reserve for store closings                                (1,410)        (1,857)       (2,443)
   (Recovery) provision for losses on store closings, net                   -           (499)         (836)
   Stock option and bonus plan expense, net of stock
     retained for income taxes                                              -             33           109
   Loss (gain) on disposition of fixed assets                             191             60           (30)
   Amortization of deferred rental allowance                             (495)          (458)         (344)
   Gain on disposition of real estate and leaseholds                        -         (3,859)       (5,616)
   Recording impairment of long-lived assets                                -          3,000             -
   Changes in assets and liabilities
     (Increase) decrease in accounts receivable                          (254)           233         2,042
     (Increase) decrease in merchandise inventories                    (7,156)        13,352         7,311
     (Increase) in prepaid expenses and other                             (29)           (61)       (2,476)
     Decrease in other assets                                             187              2             -
     (Decrease) in trade accounts payable                              (3,384)        (8,889)       (3,337)
     Increase (decrease) in accrued liabilities                         5,458         (1,009)         (947)
     (Decrease) increase in other noncurrent liabilities                  (90)           382         1,774
     (Decrease) in income taxes                                           (62)          (167)       (4,456)
                                                                     --------        -------      --------
       Net cash (used) provided by operating activities                (4,334)         6,093         4,303
Cash flows of investing activities
 Proceeds from disposition of fixed assets                                  -          4,197         8,527
 Purchase of property, plant and equipment                             (6,631)        (2,976)      (10,047)
 Proceeds from note receivable                                             72             73            45
 Proceeds from landlords                                                2,016            446         3,752
                                                                      -------        -------      --------
       Net cash (used) provided by investing activities                (4,543)         1,740         2,277
Cash flows of financing activities
 Proceeds from issuance of long-term obligations                          546              -             -
 Payments of long-term obligations                                        (24)        (3,527)       (1,293)
 Proceeds (payments) from revolving credit facility, net                8,320         (4,313)       (5,361)
                                                                     --------        -------      --------
       Net cash (used) provided by financing activities                 8,842         (7,840)       (6,654)
                                                                     --------        -------      --------
Net (decrease) in cash and cash equivalents                               (35)            (7)          (74)
Cash and cash equivalents at beginning of period                          356            363           437
                                                                     --------        -------      --------
Cash and cash equivalents at end of period                           $    321        $   356      $    363
                                                                     ========        =======      ========
Supplemental disclosures of cash flow information
 Cash paid (received) during the year for
   Income taxes                                                      $     26        $  (244)     $    147
   Interest expense                                                     2,793          3,134         4,405
</TABLE>

See notes to consolidated financial statements.

                                       28
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE A - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

 GENERAL BUSINESS
 ----------------

     Oshman's Sporting Goods, Inc. (the Company) operates a chain of retail
     sporting goods specialty stores.  As of January 29, 2000, the Company
     operated 42 SuperSports USA stores, 37 of which are megastores and 5 of
     which are mini-SuperSports USA stores, and 15 traditional stores.  Sales in
     Texas and California accounted for 57% and 14% of retail sales.  The
     majority of the Company's sales are either cash or through major national
     credit cards.

 1. Fiscal Year
    -----------

 The Company's fiscal year ends on the Saturday closest to the end of January.
 Fiscal years 1999, 1998, and 1997 ended on January 29, 2000, January 30, 1999,
 and January 31, 1998, respectively.

 2. Principles of Consolidation
    ---------------------------

 The consolidated financial statements include the accounts of Oshman's Sporting
 Goods, Inc. and its subsidiaries, all wholly-owned.  In consolidation, all
 significant intercompany transactions have been eliminated.

 3. Use of Estimates
    ----------------

 In preparing the financial statements in conformity with generally accepted
 accounting principles, management is required to make estimates and assumptions
 that affect the reported amounts of assets and liabilities and the disclosure
 of contingent assets and liabilities at the date of the financial statements
 and revenues and expenses during the reporting period.  Actual results could
 differ from those estimates.

 4. Cash and Cash Equivalents
    -------------------------

 The Company considers all highly liquid debt instruments purchased with a
 maturity of three months or less to be cash equivalents.

 5. Merchandise Inventories
    -----------------------

 Merchandise inventories are valued principally by the retail method and are
 stated at the lower of cost, determined on a first-in, first-out (FIFO) basis,
 or market.

                                       29
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE A - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Continued

 6. Property, Plant and Equipment
    -----------------------------

 The Company applies SFAS No. 121, Accounting for Impairment of Long-Lived
 Assets and Long-Lived Assets to be Disposed Of, which requires that long-lived
 assets that are held and used by an entity be reviewed for impairment whenever
 events or changes in circumstances indicate that the carrying amount of an
 asset may not be recoverable.  When it is determined that an asset's estimated
 future net cash flows will not be sufficient to recover its carrying amount, an
 impairment charge must be recorded to reduce the carrying amount for the asset
 to its estimated fair value.  Impairment charges of $3,000,000 were taken in
 1998 to reduce the carrying value of certain leasehold improvements and
 fixtures to their estimated realizable value.

 Depreciation and amortization are provided principally by the straight-line
 method based upon estimated useful lives of 3 to 10 years for furniture,
 fixtures and equipment, 3 to 30 years for leasehold improvements and 20 to 40
 years for buildings.  Estimated useful lives of leasehold improvements
 represent the remaining term of the lease in effect at the time the
 improvements are made.

 7. Amortization of Other Assets
    ----------------------------

 Loan acquisition costs are being amortized over the term of the related debt
 using the straight-line method.

 8. Deferred Rental Allowances
    --------------------------

 The Company may receive payments from landlords as inducements to sign new
 store leases.  The construction costs of real property improvements are offset
 by this landlord funding.  Deferred rental allowances represent payments in
 excess of the costs of the real property improvements and are recognized as a
 reduction of rent expense over the life of each applicable lease.

 9. Income Taxes
    ------------

 Provision has been made for deferred income taxes applicable to the temporary
 differences between earnings for financial reporting purposes and taxable
 income.  Principal temporary differences include differences in accounting for
 depreciation and capitalization of certain inventory costs.

                                       30
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE A - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Continued

 10.  Pre-opening Expense
      -------------------

 Effective February 2, 1997, the Company changed the method of accounting for
 pre-opening expenses.

 Expenses (other than property, plant and equipment) associated with the opening
 of new stores are charged to expense as incurred.  Previously, the Company
 deferred and amortized all direct and incremental expenses related to the
 opening of a store over a one-year period subsequent to the store opening.  The
 Company believes this change is preferable because there is no direct causal
 relationship between these expenses and future revenues and it improves
 comparability with other companies in its industry.  The cumulative effect of
 this change on periods prior to January 31, 1998 of $1,299,000 is shown
 separately in the consolidated statement of operations.

 11.  Advertising Costs
      -----------------

 Advertising costs consist principally of newspaper and television
 advertisements and are recorded net of any advertising incentives earned from
 vendors.  Advertising costs were $9,990,000, $11,376,000 and $14,280,000 in
 1999, 1998 and 1997.

 12.  Store Closing Provision
      -----------------------

 The Company provides a provision for store closings when the decision to close
 a store is made.  The provision consists of the incremental costs which are
 expected to be incurred, including future net lease obligations, employee costs
 and other direct store closing costs.  Inventory valuation adjustments, as
 necessary, are recorded as additional cost of goods sold and as a direct
 reduction to inventory.

 13.  Earnings Per Share
      ------------------

 Basic earnings per share is calculated by dividing net income available to
 common stockholders by the weighted average number of common shares
 outstanding.  Dilutive earnings per share is calculated by dividing net income
 available for common stockholders by the weighted average number of common
 shares and dilutive potential common shares outstanding.  Stock options may be
 potential common shares and are therefore considered in the earnings per share
 calculations, if dilutive.  The number of dilutive potential common shares is
 determined using the treasury stock method.

                                       31
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE A - BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Continued

 14. Reclassifications
     -----------------

 Certain amounts in prior financial statements have been reclassified to conform
 to the 1999 financial statement presentation.


NOTE B - PROPERTY, PLANT AND EQUIPMENT

 The cost of property, plant and equipment at the end of the year consists of
 the following:

                                                     1999     1998
                                                    -------  -------
                                                     (In thousands)
     Furniture, fixtures and equipment              $54,013  $54,278
     Leasehold improvements                          28,741   28,584
     Buildings                                        2,000    2,000
     Land                                             1,876    1,876
     Leasehold improvements under capital leases        473      524
                                                    -------  -------
                                                    $87,103  $87,262
                                                    =======  =======

NOTE C - NOTE RECEIVABLE

 The Company has a non-interest bearing note receivable from the Company's Chief
 Executive Officer.  At the end of 1999 and 1998, the balance of the note was
 $255,000 and $327,000, respectively.  The note is payable in bi-weekly
 installments of approximately $2,768 with the remainder due September 2000.
 The note is collateralized by life insurance and Company stock options.

NOTE D - LONG-TERM OBLIGATIONS

 Long-term obligations at the end of the year consist of the following:

                                                             1999        1998
                                                             ----        ----
                                                             (In thousands)

   Revolving credit facility due August 31, 2001, interest
     payable monthly, collateralized by inventory, accounts
     receivable and real estate                             $36,998     $28,679

                                       32
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE D - LONG-TERM OBLIGATIONS - Continued

                                                              1999     1998
                                                            -------  -------
                                                             (In thousands)

 Capitalized lease obligations, interest at an average rate
   of 10.6%, maturing at various dates through 2007             523        0
                                                            -------  -------
                                                             37,521   28,679
  Less current maturities                                        58        0
                                                            -------  -------
                                                            $37,463  $28,679
                                                            =======  =======

Following are maturities of long-term obligations for each of the next five
years and thereafter:

       Fiscal year                                     Amount
       -----------                                     ------
                                                   (In thousands)
          2000                                         $    58
          2001                                          37,063
          2002                                              72
          2003                                              80
          2004                                              88
         Thereafter                                        160
                                                       -------
                                                       $37,521
                                                       =======


The Company has an agreement providing for a revolving credit facility with the
CIT Group/Business Credit, Inc. (CIT). Advances under the facility are based on
a borrowing base formula and subject to certain loan restrictions, and the
facility is secured primarily by inventory, accounts receivable and real estate.
The credit agreement includes various requirements, financial covenants and
restrictions, including a restriction on the payment of dividends. During 1998,
CIT amended one ratio covenant to exclude the impairment losses so that the
Company would be in compliance. The Company was in compliance with all other
financial covenants at the end of 1998. As of January 29, 2000, the Company is
in breach of two of the financial covenants, but has subsequently obtained a
waiver from CIT and is no longer in breach of any covenants. Currently, the
revolving line of credit is $65,000,000, with a seasonal increase to $80,000,000
during the period from mid-September through mid-December each year. In
addition, the Company may, at its option, increase the line of credit by an
additional $5,000,000.

                                       33
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE D - LONG-TERM OBLIGATIONS - Continued

 Advances under the credit facility bear interest at the prime rate (8.5% at
 January 29, 2000) and any unused borrowing capacity is subject to a line of
 credit fee of .25%.  The Company may, under certain circumstances, elect to
 have interest computed at a rate of the London Interbank Offered Rate (LIBOR,
 5.84% to 6.17% at January 29, 2000) plus 2.125%.  The credit facility expires
 August 31, 2001.

 At the end of 1999 and 1998, outstanding letters of credit were $582,000 and
 $1,138,000, respectively.

NOTE E - INCOME TAXES

 The Company's tax expense (benefit) consisted of the following:

                                 1999      1998       1997
                                ------    ------    ---------
                                      (In thousands)
   Current
     Federal                    $  18     $(686)     $(4,142)
     Foreign                       35        43           78
     State                          4         2           19
   Deferred
     State                        (58)     (103)          44
                                -----     -----      -------
                                $  (1)    $(744)     $(4,001)
                                =====     =====      =======

 A reconciliation of income tax benefits on net earnings (losses) before income
 taxes computed at the statutory federal income tax rate and income taxes
 reported in the consolidated statements of operations is as follows:

                                                   1999      1998      1997
                                                 ---------  -------  ---------
                                                         (In thousands)

      Income tax benefit at statutory
          rate                                    $(1,235)   $(712)   $   806
      Increases (reductions)
          Change in valuation allowance
             Current year operations                1,256      593       (851)
             Net operating loss carryback               -     (507)    (2,489)
          Carryback of net operating loss to
          periods for which tax rates exceed
          current rate                                  -     (179)    (1,652)
      Other items - net                               (22)      61        185
                                                  -------    -----    -------
             Income tax benefit                   $    (1)   $(744)   $(4,001)
                                                  =======    =====    =======

                                       34
<PAGE>

                 Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE E - INCOME TAXES - Continued

 Deferred tax assets and liabilities consist of the following:

<TABLE>
<CAPTION>
                                                       January 29, 2000        January 30, 1999
                                                      -------------------     -------------------
                                                      Current   Long-Term     Current   Long-Term
                                                      -------   ---------     -------   ---------
                                                        (In thousands)             (In thousands)
<S>                                                   <C>       <C>           <C>       <C>
     Assets
     ------
          Accrued expenses                              $ 379     $   645      $  271     $   471
          Lease incentives                                167       1,851         158       1,892
          Store closing reserves                          355           -         917           -
          Net operating loss carryforward                   -       9,112           -       9,142
          Business tax credits                              -       1,082           -       1,006
                                                        -----     -------      ------     -------
                                                          901      12,690       1,346      12,511

                                                       January 29, 2000          January 30, 1999
                                                      -------------------      -------------------
                                                      Current   Long-Term      Current   Long-Term
                                                      -------   ---------      -------   ---------
                                                        (In thousands)            (In thousands)
     Liabilities
     -----------
          Depreciation of property and equipment        $   -     $ 3,561      $    -     $ 4,727
          Inventory capitalization                        722           -       1,078           -
          State taxes                                       4         132           4         190
          Other                                            50         127          50         127
                                                        -----     -------      ------     -------
                                                          776       3,820       1,132       5,044
                                                        -----     -------      ------     -------
           Net asset before valuation allowance           125       8,870         214       7,467
          Less valuation allowance                       (179)     (9,128)       (268)     (7,783)
                                                        -----     -------      ------     -------
           NET LIABILITY                                $  54     $   258      $   54     $   316
                                                        =====     =======      ======     =======
</TABLE>

 In 1998, the Company recorded federal income tax refunds of $686,000, of which
 $219,000 plus interest of $3,000 was received by year-end, resulting from the
 application of net operating loss carrybacks.

     In the third quarter of fiscal 1995, the Company received federal income
 tax refunds of $4,142,000 plus interest of $662,000 resulting from the
 application of net operating loss carrybacks.  These amounts resulted in tax
 benefits recordable in the Company's statement of operations due to the
 expiration of the statute of limitations for review of the refunds during 1997.
 Approximately $179,000 and $1,652,000 of the tax refunds in 1998 and 1997
 relate to the benefit of carrying back net operating losses to periods for
 which the tax rates exceeded the current 34% federal income tax rate.

                                       35
<PAGE>

                 Oshman's Sporting Goods, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       January 29, 2000, January 30, 1999
                              and January 31, 1998

NOTE E - INCOME TAXES - Continued

 Deferred tax assets were reduced by valuation allowances of $9,307,000 and
 $8,051,000 at January 29, 2000 and January 30, 1999, respectively.  Due to the
 operating loss carryforwards generated during fiscal 1999 from the Company's
 continuing operations, management believes that uncertainties exist such that
 it cannot be considered more likely than not that the Company's deferred tax
 assets will be realized in the future and therefore have recorded a valuation
 allowance against existing net deferred tax assets.  In 1999, the Company
 increased its valuation allowance by $1,256,000 due to net deferred tax assets
 generated during the year.

 The Company has net operating loss carryforwards of approximately $26,800,000.
 The carryforwards expire as follows:

          Expiration                         Amount
          ----------                         ------
                                          (In thousands)
             2010                            $ 2,980
             2011                              2,375
             2012                             12,159
             2013                              6,161
             2019                              3,125
                                             -------
                                             $26,800
                                             =======

 Additionally, the Company has foreign tax credit carryforwards of $246,000
 expiring from 2000 to 2005, job tax credit carryforwards of $748,000 expiring
 from 2008 to 2011 and alternative minimum tax credit carryforwards of $246,000.

NOTE F - COMMITMENTS AND CONTINGENCIES

 Operating Leases
 ----------------

     The Company conducts certain of its operations in owned facilities with its
     remaining operations being conducted in facilities leased under
     noncancelable operating leases.  Rentals of the retail locations are based
     on minimum required rentals and/or, in certain instances, contingent
     rentals based on a percentage of sales.  Some leases contain renewal
     options with provision for increased rentals during the renewal term.

                                       36
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE F - COMMITMENTS AND CONTINGENCIES - Continued

 Future minimum rental payments under operating leases at the end of 1999 are as
 follows:

     Fiscal year                                         Amount
     -----------                                       ----------
                                                     (In thousands)
        2000                                            $ 17,967
        2001                                              18,341
        2002                                              18,144
        2003                                              17,460
        2004                                              16,304
     Thereafter to 2019                                  148,347

  Minimum payments have not been reduced by minimum sublease rental income of
  $9,178,000 due in the future under noncancelable subleases.

  Total rental expense entering into the determination of net earnings (loss) is
  as follows:

                                               1999     1998     1997
                                              -------  -------  -------
                                                   (In thousands)
  Leased facilities
    Minimum rentals                           $18,478  $18,862  $18,550
    Contingent rentals (based on a
      percentage of sales)                        856    1,003    1,525
                                              -------  -------  -------
                                               19,334   19,865   20,075
  Other rentals                                   384      394      425
                                              -------  -------  -------
                                              $19,718  $20,259  $20,500
                                              =======  =======  =======

 Certain leases between the Company and two trusts, which are for the benefit of
 two shareholders, provide for total minimum annual rentals of $399,000 through
 November, 2003.

 Profit Sharing Plan
 -------------------

     The Company and its subsidiaries participate in a discretionary employee
     profit sharing plan.  The Plan is a 401(k) Retirement Savings Plan covering
     substantially all employees.  Under the Plan, participating employees can
     allocate up to 15% of their salary.  The Company may make discretionary
     contributions to the Plan.  The Company made no contributions to the Plan
     in 1999, 1998 or 1997.

                                       37
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE F - COMMITMENTS AND CONTINGENCIES - Continued

  Severance Pay Bonus Agreements
  ------------------------------

     The Company has employment agreements with certain executive officers that
     become operative only upon a change in control of the Company.
     Compensation which may be payable under these agreements has not been
     accrued in the consolidated financial statements as a change in control, as
     defined, has not occurred.

 Deferred Compensation Agreement
 -------------------------------

     The Company has a deferred compensation agreement with an executive officer
     under which the officer will receive an estimated annual retirement benefit
     of $151,515 after he attains age 65.  Payments began in 1998 and will
     continue for an additional eight years.  This agreement amended a previous
     deferred compensation agreement between the Company and the executive
     officer, which was funded by a purchased life insurance policy on the life
     of the executive.  As part of the revised agreement, the Company cancelled
     the life insurance policy for the full cash value at the time of
     cancellation.  If the executive dies before all payments are made, the
     remaining payments will be made to his designated beneficiary under the
     same payment schedule.

 Litigation
 ----------

     Various legal claims have arisen in the normal course of business, which,
     in the opinion of management, will not have a material adverse effect on
     the Company's financial statements.

NOTE G - STOCKHOLDERS' EQUITY

 Capital Stock
 -------------

     Authorized capital stock consists of 500,000 shares of $1 par value
     preferred stock and 15,000,000 shares of $1 par value common stock.  No
     preferred stock has been issued.  Common stock shares issued were 5,830,000
     and shares outstanding were 5,827,000 at the end of 1999, 1998, and 1997.

 Common Stock Option Plans
 -------------------------

     The Company's 1994 Omnibus Plan authorizes the grant of Incentive Awards
     for up to 750,000 shares of common stock to key employees of the Company.
     Awards may be in the form of stock options, stock appreciation rights,
     restricted stock, performance units, performance shares or other stock
     based awards and certain additional payments in the amount of federal
     income taxes payable by a grantee and relating to an award, and are to be
     determined by a committee of the Board of Directors.

                                       38
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE G - STOCKHOLDERS' EQUITY - Continued

     Stock options granted may be either nonqualified options or incentive stock
     options and may include reload options.  Exercise price will be determined
     by the committee; however, in the case of incentive stock options, the
     exercise price shall not be less than 100% of the market value of the
     shares at the time the options are granted.  No option is exercisable after
     the expiration of ten years from the date of grant.

     The 1994 Omnibus Plan replaces the Company's 1991 Stock Option Plan, 1986
     Stock Option Plan and 1986 Stock Bonus Plan.  However, currently
     outstanding options and grants under those plans will continue to exist
     until they vest and are exercised or expire.  No awards are outstanding
     under the 1986 Stock Bonus Plan or the 1991 Stock Option Plan at year end.

     Additionally, the Company's 1993 Non-Employee Director Stock Option Plan
     provides for the issuance of options to non-employee directors of the
     Company at an option price equal to the average of the closing prices of
     the last five trading days preceding and including the date of grant.
     Unexercised options expire no later than ten years from date of grant or
     three months after the termination of the directorship, extended to one
     year if the termination of directorship is caused by death or disability.

     The Company records an expense based on the difference between the option
     price and fair market value of the stock at date of grant, amortized over
     the vesting period of the option. Upon the exercise of options, the
     proceeds are credited to the common stock account to the extent of the par
     value of the shares issued, and the proceeds in excess of the par value are
     credited to additional capital.

 Restricted Stock Award
 ----------------------

     The Company granted 100,000 restricted shares of the Company's common stock
     to the Company's current Chief Executive Officer in 1994 pursuant to the
     1994 Omnibus Plan.  The grantee has no rights as a stockholder with respect
     to the restricted shares, including no right to transfer or receive
     dividends in most circumstances.  Grantee is 100% vested in restricted
     shares.  Restrictions on the stock end upon retirement or in the event of
     death or disability of the grantee, termination by grantee following a
     change in control of the Company, termination of grantee by the Company
     without cause and termination by grantee for good reason.  Additionally,
     the grant provides that the Company will pay the grantee the

                                       39
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE G - STOCKHOLDERS' EQUITY - Continued

     federal tax benefit (if any) realized by the Company from the tax deduction
     for compensation resulting from the restricted stock grant.  Expense
     recorded for the grant was approximately $0, $39,000 and  $98,000 in 1999,
     1998, and 1997, respectively.

 FASB Statement 123 Disclosure
 -----------------------------

     The Company applies APB 25 and related Interpretations in accounting for
     stock-based compensation.  Had compensation costs been determined based on
     the fair value at the grant dates for awards consistent with the method of
     FASB Statement 123, the Company's net income and earnings per share would
     have been reduced to the pro forma amounts indicated below:

                                            1999      1998      1997
                                          --------  ---------  -------
   Net (loss) income
     As reported                          $(3,630)   $(1,351)   $5,073
     Pro forma                             (3,917)    (1,438)    4,806
   Earnings (loss) per share - basic
     As reported                             (.62)      (.23)      .87
     Pro forma                               (.67)      (.25)      .82
   Earnings (loss) per share - diluted
     As reported                             (.62)      (.23)      .85
     Pro forma                               (.67)      (.25)      .80

     The fair value of each option grant is estimated on the date of the grant
     using the Black-Scholes option-pricing model with the following weighted-
     average assumptions used for the grants issued in 1999, 1998 and 1997:

                                  1999        1998       1997
                               ----------  ----------  --------
   Expected volatility           60.28%      55.69%     56.10%
   Risk free rate                 6.05%       5.65%      5.76%
   Expected life of options       7.5 years   7.5 years    6 years
   Expected dividend yield        0.00%       0.00%      0.00%

                                       40
<PAGE>

                 Oshman's Sporting Goods, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       January 29, 2000, January 30, 1999
                              and January 31, 1998


NOTE G - STOCKHOLDERS' EQUITY - Continued

     A summary of the Company's stock options and warrants of 1999, 1998 and
     1997 and changes during the years ending on those dates is presented below:

<TABLE>
<CAPTION>
                                                 1999                               1998                         1997
                                            Weighted-average                   Weighted-average             Weighted average
                               Shares        exercise price        Shares       exercise price     Shares    exercise price
                               ------       ----------------       ------       --------------     -------   --------------
<S>                            <C>          <C>                    <C>          <C>                <C>       <C>
   Outstanding at
     beginning of year         611,150            $4.42            586,650           $5.04         511,450       $5.38

   Granted                      57,000             2.12            317,000            5.57         299,250        4.60

   Forfeited                    35,500             4.80            290,000            6.92         224,050        5.80

   Expired                           -                -              2,500            6.75               -           -
                               -------                             -------                         -------
   Outstanding at
     end of year               632,650             4.19            611,150            4.42         586,650        5.04
                               =======                             =======                         =======
   Options exercisable
      at end of year            37,000             5.76             38,166            5.94         278,833        7.06
                               =======                             =======                         =======
</TABLE>

 The weighted-average fair value of compensatory options granted during 1999,
 1998 and 1997 was $1.45, $4.02 and $3.29 per option.

 The following table summarizes information about options and warrants
 outstanding at January 29, 2000:
<TABLE>
<CAPTION>

                                   Options/awards outstanding                     Options exercisable
                       -------------------------------------------------    ------------------------------
                                     Weighted-average
       Range of           Number         remaining      Weighted-average       Number     Weighted-average
     exercise prices   outstanding   contractual life   exercise price      outstanding    exercise price
     ---------------   -----------   ----------------   ----------------    -----------   ----------------
     <S>               <C>           <C>                <C>                 <C>           <C>
        $0 - $1          100,000        unlimited              -                  -              -
        $2 - $3           57,000       9.61 years           2.12              2,000           2.68
     $4.50 - $6.00       455,650       7.86 years           5.24             25,000           5.64
     $6.01 - $7.63        20,000       6.06 years           7.16             10,000           6.68
                         -------                                             ------
                         632,650                                             37,000
                         =======                                             ======
</TABLE>

                                       41
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      January 29, 2000, January 30, 1999
                             and January 31, 1998

NOTE H - EARNINGS (LOSS) PER SHARE

     The following data show the amounts used in computing earnings per share
     (EPS) and the weighted average number of shares of dilutive potential
     common stock.

                                                  1999       1998      1997
                                                ---------  ---------  ------
                                                       (In thousands)

   Net (loss) earnings                           $(3,630)   $(1,351)  $5,073
                                                 =======    =======   ======
   Weighted average common shares used
       In basic EPS                                5,830      5,830    5,830
          Effect of dilutive securities:
                 Stock Options                         -          -      110
                                                 -------    -------   ------
   Weighted average common and potential
     dilutive common shares used in dilutive
     EPS                                           5,830      5,830    5,940
                                                 =======    =======   ======


NOTE I - STORE CLOSING RESERVE

   The Company has accrued store closing reserves to cover estimated lease costs
   and other incremental closing costs of stores closed or targeted to close.
   Management believes that these reserves are adequate.


NOTE J - MISCELLANEOUS INCOME (EXPENSE)

 Miscellaneous income (expense) consist of the following:

                                                   1999       1998      1997
                                                   -----    --------   ------
                                                         (in thousands)
   Gain on sale of real estate and leasehold
     interests, net of commissions                 $   -     $3,914    $5,616
   Fees from foreign licenses                        442        467     1,199
   Other, net                                       (120)      (118)     (769)
                                                   -----     ------    ------
                                                   $ 322     $4,263    $6,046
                                                   =====     ======    ======

                                       42
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     January 29, 2000, January 30, 1999
                             and January 31, 1998


NOTE J - MISCELLANEOUS INCOME (EXPENSE) - Continued

     Fees from foreign licenses represent annual royalties from license
     agreements which provide the licensee the ability to use the Company's name
     and to import and sell the Company's products.  Revenue under the license
     agreements includes annual royalties based on the greater of a minimum or a
     percentage of sales in the licensee's stores and fees related to sales to
     the licensee.

                                       43
<PAGE>

                           SUPPLEMENTAL INFORMATION

                                       44
<PAGE>

                Oshman's Sporting Goods, Inc. and Subsidiaries

                       SELECTED QUARTERLY FINANCIAL DATA
                                  (Unaudited)
               Years ended January 29, 2000 and January 30, 1999
                    (In thousands except per share amounts)

                                         First    Second     Third     Fourth
                                        quarter   quarter   quarter   quarter
                                       --------- --------- --------- ----------
1999
  Net sales                             $71,374   $76,274   $65,137    $93,707
                                        =======   =======   =======    =======
  Gross profit                          $25,162   $26,211   $23,282    $30,265
                                        =======   =======   =======    =======
  Net earnings (loss)                   $  (497)  $(1,014)  $(3,606)   $ 1,487
                                        =======   =======   =======    =======
  Basic earnings (loss) per share       $  (.09)  $  (.17)  $  (.62)   $   .26
                                        =======   =======   =======    =======
  Diluted earnings (loss) per share     $  (.09)  $  (.17)  $  (.62)   $   .25
                                        =======   =======   =======    =======
1998
  Net sales                             $72,140   $79,032   $64,312    $93,573
                                        =======   =======   =======    =======
  Gross profit                          $25,380   $26,847   $24,079    $29,474
                                        =======   =======   =======    =======
  Net earnings (loss)                   $(1,124)  $ 3,420   $(2,015)   $(1,632)
                                        =======   =======   =======    =======
  Basic earnings (loss) per share       $  (.19)  $   .59   $  (.35)   $  (.27)
                                        =======   =======   =======    =======
  Diluted earnings (loss) per share     $  (.19)  $   .57   $  (.35)   $  (.27)
                                        =======   =======   =======    =======

                                       45
<PAGE>

                                                                     Schedule II

                Oshman's Sporting Goods, Inc. and Subsidiaries

                      ALLOWANCE FOR DOUBTFUL RECEIVABLES
                Years ended January 29, 2000, January 30, 1999
                             and January 31, 1998
                                (In thousands)



          Column A            Column B    Column C      Column D      Column E
          --------           ----------  ----------  --------------  ----------
                             Balance at  Additions                   Balance at
                             beginning   charged to                    end of
         Description         of period    expense    Deductions (A)    period
         -----------         ----------  ----------  --------------  ----------


Year ended January 29, 2000     $ 88       $    -        $     -         $ 88

Year ended January 30, 1999     $130       $    -        $    42         $ 88

Year ended January 31, 1998     $255       $    -        $   125         $130

(A)  Receivables charged off, net of recoveries.

                                       46
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                  OSHMAN'S SPORTING GOODS, INC.


                                  By:   /s/ Steven Martin
                                     ------------------------------------------
                                  Name:  Steven Martin
                                  Title: Senior Vice President, Chief Financial
                                         Officer

Date: April 27, 2000

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on April 27, 2000, by the following persons on
behalf of the Registrant and in the capacities indicated.


  /s/ Marilyn Oshman                    /s/ Alvin N. Lubetkin
----------------------------------    ----------------------------------------
Marilyn Oshman                        Alvin N. Lubetkin
Chairman of the Board of Directors    Vice Chairman of the Board of Directors,
                                      Chief Executive Officer, President
                                      (Principal Executive Officer) and
                                      Director


  /s/ Marvin Aronowitz                  /s/ Margaret A. Gilliam
----------------------------------    ----------------------------------------
Marvin Aronowitz                      Margaret A. Gilliam
Director                              Director


  /s/ Dolph B.H. Simon                  /s/ Steven Martin
----------------------------------    ----------------------------------------
Dolph B.H. Simon                      Steven Martin
Director                              Senior Vice President, Chief Financial
                                      Officer (Principal Accounting and
                                      Financial Officer)


  /s/ William M. Hitchcock              /s/ Karen Desenberg
----------------------------------    ----------------------------------------
William M. Hitchcock                  Karen Desenberg
Director                              Director

                                       47
<PAGE>

                               INDEX TO EXHIBITS
                               -----------------

3.1       Certificate of Incorporation of Oshman's Sporting Goods, Inc., as
          amended to date (filed as Exhibit 3.1 to the Company's Form 10-K for
          the fiscal year ended January 31, 1987 (the "1987 10-K") and
          incorporated herein by reference).

3.2       Amended and Restated Bylaws of Oshman's Sporting Goods, Inc. as of
          January 30, 1997 (filed as Exhibit 3.2 to the Company's Form 10-K for
          the fiscal year ended February 3, 1997 and incorporated herein by
          reference).

4.1       Amended and Restated Financing Agreement dated December 15, 1997
          between the Company's subsidiaries and The CIT Group/Business Credit,
          Inc. (the "Financing Agreement") (filed as Exhibit 4.1 to the
          Company's Form 10-K for the fiscal year ended January 31, 1998 (the
          "1998 10-K") and incorporated herein by reference).

4.1(a)    Amendment dated March 23, 1998 to the Financing Agreement (filed as
          Exhibit 4.1(a) to the 1998 10-K and incorporated herein by reference).

4.1(b)    Amendment dated May 1, 1998 to the Financing Agreement (filed as
          Exhibit 4.1(b) to the Company's Form 10-Q for the quarterly period
          ended August 1, 1998 and incorporated herein by reference).

4.1(c)    Amendment dated December 16, 1998 to the Financing Agreement (filed as
          Exhibit 4.1(c) to the Company's 10-K for the fiscal year ended January
          30, 1999 (the "1999 10-K") and incorporated herein by reference).

4.1(d)    Amendment dated December 28, 1998 to the Financing Agreement (filed as
          Exhibit 4.1(d) to the 1999 10-K and incorporated herein by reference).

4.1(e)    Amendment dated March 5, 1999 to the Financing Agreement (filed as
          Exhibit 4.1(e) to the 1999 10-K and incorporated herein by reference).

4.1(f)    Amendment dated April 29, 1999 to the Financing Agreement (filed as
          Exhibit 4.1(f) to the Company's 1999 Form 10-Q for the quarterly
          period ended May 1, 1999 and incorporated herein by reference).

10.1   *  Executive Salary Continuation Agreement between the Company and Marvin
          Aronowitz, dated October 1, 1976 (filed as Exhibit 10.4 to the
          Company's Form 10-K for the fiscal year ended January 29, 1983 and
          incorporated herein by reference).

10.2   *  Deferred Compensation Agreement between the Company and Alvin N.
          Lubetkin, dated December 29, 1988 (filed as Exhibit 10.5 to the
          Company's Form 10-K for the fiscal year ended January 28, 1989 (the
          "1989 10-K") and incorporated herein by reference).
<PAGE>

10.2(a)  *  Amendment to Deferred Compensation Agreement between the Company and
            Alvin N. Lubetkin, dated December 31, 1998 (filed as Exhibit 10.2(a)
            to the 1999 10-K and incorporated herein by reference).

10.3     *  Oshman's Sporting Goods, Inc. 1986 Stock Option Plan, as amended
            (filed as Exhibit 10.9 to the 1987 10-K and incorporated herein by
            reference).

10.3(a)  *  Second Amendment to Oshman's Sporting Goods, Inc. 1986 Stock Option
            Plan (filed as Exhibit 19.4 to the Company's Form 10-K for the
            fiscal year ended January 30, 1993 (the "1993 10-K") and
            incorporated herein by reference).

10.3(b)  *  Third Amendment to Oshman's Sporting Goods, Inc. 1986 Stock Option
            Plan (filed as Exhibit 19.5 to the 1993 10-K and incorporated herein
            by reference).

10.4     *  Oshman's Sporting Goods, Inc. 1986 Stock Bonus Plan (filed as
            Exhibit 10.10 to the 1987 10-K and incorporated herein by
            reference).

10.4(a)  *  First Amendment to Oshman's Sporting Goods, Inc. 1986 Stock Bonus
            Plan (filed as Exhibit 10.9 to the Company's Form 10-K for the
            fiscal year ended February 3, 1990 and incorporated herein by
            reference).

10.5     *  Employment Agreement dated October 3, 1990 between the Company and
            Alvin N. Lubetkin (filed as Exhibit 10.8 to the Company's Form 10-K
            for the fiscal year ended January 29, 1994 (the "1994 10-K") and
            incorporated herein by reference).

10.6     *  Loan Agreement dated October 3, 1990 between the Company and Alvin
            N. Lubetkin (filed as Exhibit 10.9 to the Company's Form 10-K for
            the fiscal year ended February 2, 1991 (the "1991 10-K") and
            incorporated herein by reference).

10.7     *  Oshman's Sporting Goods, Inc. 1991 Stock Option Plan (filed as
            Exhibit 10.10 to the 1991 10-K and incorporated herein by
            reference).

10.8     *  Oshman's Sporting Goods, Inc. 1993 Non-Employee Director Stock
            Option Plan (filed as Exhibit 10.14 to the 1994 10-K and
            incorporated herein by reference).

10.9     *  Oshman's Sporting Goods, Inc. 1994 Omnibus Plan (filed as Exhibit
            10.13 to the Company's Form 10-K for the fiscal year ended January
            28, 1995 (the "1995 10-K") and incorporated herein by reference).

10.9(a)  *  First Amendment to the Oshman's Sporting Goods, Inc., 1994 Omnibus
            Plan (filed as Exhibit 10.13 to the Company's Form 10-Q for the
            fiscal quarter ended July 29, 1995 and incorporated herein by
            reference).
<PAGE>

10.10    *  Restricted Stock Grant Agreement between the Company and Alvin N.
            Lubetkin, dated July 15, 1994 (filed as Exhibit 10.1 to the
            Company's Form 10-Q for the quarterly period ended July 30, 1994 and
            incorporated herein by reference).

10.10(a) *  First Amendment to Restricted Stock Grant Agreement between the
            Company and Alvin N. Lubetkin dated as of July 15, 1994 (filed as
            Exhibit 10.14 to the 1995 10-K and incorporated herein by
            reference).

10.11    *  Oshman's Sporting Goods, Inc. 1995 Incentive Compensation Plan for
            Senior Management (filed as Exhibit 10.16 to the Company's Form 10-Q
            for the quarterly period ended October 28, 1995 and incorporated
            herein by reference).

10.12    *  Statement of Policy Regarding Executive Severance Pay Bonus Program
            (as amended and restated) (filed as Exhibit 10.12 to the 1998 10-K
            and incorporated herein by reference).

10.13    *  Statement of Policy Regarding Key Executive Severance Pay Bonus
            Program (as amended and restated) (filed as Exhibit 10.13 to the
            1998 10-K and incorporated herein by reference).

10.14    *  Repricing Stock Option Agreement Under the 1994 Omnibus Plan between
            the Company and Alvin N. Lubetkin, dated April 9, 1998 (filed as
            Exhibit 10.14 to the 1999 10-K and incorporated herein by
            reference).

21.1        Subsidiaries of the Registrant (filed as Exhibit 21.1 to the 1999
            10-K and incorporated herein by reference).

23.1     +  Consent of Grant Thornton LLP.

27.1     +  Financial data schedule.

____
*  Management contract or compensatory plan or arrangement.
+  Filed herewith.