<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


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

     FOR THE QUARTERLY PERIOD ENDED October 25, 1996
                                    ----------------

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

     FOR THE TRANSITION PERIOD FROM ___________ TO ___________


                         COMMISSION FILE NUMBER 0-19830
                                                -------

                          Eagle Hardware & Garden, Inc.
                          -----------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


               Washington                                   91-1465348
               ----------                                   ----------
     (STATE OR OTHER JURISDICTION OF           (IRS EMPLOYER IDENTIFICATION NO.)
     INCORPORATION OR ORGANIZATION)




                      981 Powell Ave SW   Renton, WA  98055
                      -------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)


                                 (206) 227-5740
                                 --------------
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.  YES  X   NO
                                        ---     ---

THE REGISTRANT HAD 28,866,362 SHARES OF COMMON STOCK, WITHOUT PAR VALUE,
                   ----------
OUTSTANDING AT October 25, 1996.
               ----------------

<PAGE>

                          EAGLE HARDWARE & GARDEN, INC.

                               INDEX TO FORM 10-Q


                                                                         PAGE

PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . .       3

     ITEM 1 -  FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . .       3

          Consolidated Balance Sheets. . . . . . . . . . . . . . . .      10

          Consolidated Statements of Operations. . . . . . . . . . .      11

          Consolidated Statements of Cash Flows. . . . . . . . . . .      12

          Notes to Unaudited Consolidated Financial Statements . . .      13


     ITEM 2 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
               CONDITION AND RESULTS OF OPERATIONS . . . . . . . . .       3


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

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

          Exhibit 11.1 - Computation of Net Income Per Share . . . .      15

                                        2

<PAGE>

PART I - FINANCIAL INFORMATION:


ITEM 1 - FINANCIAL STATEMENTS -

     Eagle Hardware & Garden, Inc.'s ("the Company") unaudited consolidated
balance sheet as of October 25, 1996, audited consolidated balance sheet as of
January 26, 1996, unaudited statements of operations for the 13- and 39-week
periods ended October 25, 1996, and October 27, 1995, and unaudited consolidated
statements of cash flows for the 39-week periods then ended are attached.  Notes
to the unaudited consolidated financial statements are also attached.


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

     It is suggested that this discussion be read in conjunction with the
"Management's Discussion and Analysis" included in the Company's 1995 Annual
Report to Shareholders,  which has previously been filed with the Securities and
Exchange Commission.

     The results of operations for the 13- and 39-week periods ended October 25,
1996, are not necessarily indicative of the results to be expected for the full
fiscal year.  The Company expects that its gross margin percentage will
generally be lower in the second and third quarters of each fiscal year when
sales of lower margin products are greater.  The Company also expects that, in
general, individual stores will experience lower net sales and operating income
and that cash flow from operations will be lower in the fourth quarter of the
fiscal year than in any of the other quarters, due primarily to the effect of
winter weather on home improvement projects and the lack of significant sales of
lawn and garden products during this period.  In addition, unusual weather
conditions could have a material adverse effect on seasonal sales.

     "Store Weeks in Period" represents the aggregate number of full weeks in
which stores were open during the reporting period.  There were 321 store weeks
of operations during the third quarter of fiscal 1996, an increase of 6%
compared to the 302 store weeks during the comparable prior year period.  For
the 39 weeks ended October 25, 1996, total store weeks increased 15% to 945 from
823 store weeks in 1995.

     RESULTS OF OPERATIONS -

     (a)  COMPARISON OF THE 13 WEEKS ENDED OCTOBER 25, 1996, AND OCTOBER 27, 
1995.

     NET INCOME.  Net income for the third quarter of fiscal 1996 increased 207%
to $7,591,000, or $0.28 per share, fully diluted, from $2,473,000, or $0.11 per
share, during the third quarter of fiscal 1995.  The Company's 6.25% convertible
subordinated debentures were dilutive  during the third quarter of fiscal 1996
(see Exhibit 11.1).  Had the debentures not been dilutive, net income per share
for the quarter ended October 25, 1996 would have been $0.29 (primary net income
per share).  The 207% increase in net income was due to the factors discussed
below.

     Weighted average common and common equivalent shares outstanding for use in
the primary earnings per share calculation increased 13% from 23,129,000 as of
October 27, 1995, to 26,055,000 as of October 25, 1996.  The primary reason for
this increase was the completion of a public stock offering in September 1996
which resulted in the issuance of 5,750,000 shares of Common Stock.

                                        3

<PAGE>

     NET SALES.  Net sales for the third quarter of fiscal 1996 were 
$198,731,000, compared to net sales of $159,764,000 for the comparable prior 
year period.  This 24% increase in net sales over the prior year period was 
due to a 19% increase in same store sales for the quarter (for stores open 
one year or more) and a 6% increase in store weeks of operations during the 
period.  Same store sales increased primarily as a result of a 17% increase 
in the number of transactions.  The increase of 19% in same store sales 
during the quarter compares to a decrease of 11% for the third quarter of 
fiscal 1995.  Management attributes the increase in same store sales to 
several factors, including favorable economic conditions in most of the 
Company's markets and the declining performance of a primary competitor, 
Ernst Home Center, Inc. (Ernst).   Ernst filed for Chapter 11 bankruptcy 
protection in July 1996 and subsequently obtained approval from the court in 
November 1996 to conduct a Chapter 7 orderly liquidation of assets.  
Liquidation of the remaining Ernst stores began on November 23, 1996.

     GROSS MARGIN.  The Company's gross margin was $54,660,000 for the third
quarter of fiscal 1996.  This represents an increase of $11,501,000, or 27%,
over the third quarter of fiscal 1995.  As a percentage of net sales, gross
margin was 27.5% in the third quarter of fiscal 1996 versus 27.0% in the
comparable prior year period.  Management attributes the improvement in gross
margin as a percentage of net sales to a combination of factors, including
volume-related buying efficiencies, a reduction in realized inventory shrinkage
(attributed primarily to continuing loss prevention programs) and less
promotional pricing by competitors.

     OPERATING EXPENSES.  Operating expenses as a percentage of net sales
decreased from 22.6% in the third quarter of fiscal 1995 to 22.3% in the third
quarter of 1996, primarily as a result of additional leverage attributable to
the 19% increase in same store sales.  The dollar amount of operating expenses
increased by $8,273,000, or 23%, from the comparable prior year period,
primarily as a result of the 19% increase in same store sales and the 6%
increase in store weeks of operations.  Third quarter operating expense leverage
would have been greater had it not been for the Company's decision to increase
staffing on the sales floor to support increased levels of customer traffic and
to further its ongoing commitment to providing a high level of customer service.

     PREOPENING EXPENSES.    Preopening expenses were $504,000, or 0.3% of net
sales, in the third quarter of fiscal 1996, during which the Company opened one
store.  In the comparable prior year quarter, when the Company opened two
stores, preopening expenses were $1,266,000, or 0.8% of net sales.

     OPERATING INCOME.  For the reasons explained above, operating income
increased 68%, from $5,832,000 in the third quarter of fiscal 1995 to $9,822,000
in the third quarter of fiscal 1996.  Expressed as a percentage of net sales,
operating income improved from 3.7% in the third quarter of fiscal 1995 to 4.9%
in the third quarter of 1996.

     INTEREST EXPENSE.  Net interest expense during the third quarter of fiscal
1996 was $1,493,000, compared to $2,044,000 during the comparable prior year
period.  The decrease resulted primarily from the completion of the Company's
$125,000,000 Common Stock offering in September 1996.  A portion of the proceeds
from this offering was used to pay off credit line borrowings and the remainder
was invested on a short-term basis.  Interest on the Company's convertible
subordinated debentures, which represent the primary source of interest expense,
was comparable between the current and prior year periods.  During both
quarters, interest incurred was partially offset by interest capitalized on
construction projects.

     OTHER INCOME.  Other income in the third quarter of fiscal 1996 consisted
primarily of a $2,108,000 capital gain on the sale of surplus land located in
Lynnwood, Washington.

                                        4

<PAGE>

     INCOME TAXES.  The Company recorded a combined federal and state tax
provision of $2,947,000 for the third quarter of fiscal 1996, compared to a
provision of $1,342,000 during the comparable prior year period.  The effective
tax rate for the third quarter of fiscal 1996 was 28.0% versus 35.2% in the
third quarter of fiscal 1995.  The effective tax rate in the third quarter of
fiscal 1996 was lower than the combined federal and state statutory rates that
the Company expects to pay under normal circumstances for two reasons.  First,
$2,142,000 in capital gains recorded in the quarter was not taxable due to the
utilization of a portion of the Company's capital loss carryforward incurred in
the fourth quarter of fiscal 1994.  Second, a portion of the Company's net
proceeds from the stock offering was invested in tax-exempt securities,
resulting in a lower expected effective tax rate for the year.  The third
quarter effective rate for 1995 was lower than the combined federal and state
statutory tax rates due primarily to adjustments between the prior year tax
provision and the tax return which was filed during that quarter.


     (b)  COMPARISON OF THE 39 WEEKS ENDED OCTOBER 25, 1996, AND OCTOBER 27,
1995.

     NET INCOME.  Net income for the first 39 weeks of fiscal 1996 increased 92%
to $18,620,000, or $0.74 per share, fully diluted, from $9,706,000, or $0.42 per
share, during the first 39 weeks of fiscal 1995.  The Company's 6.25%
convertible subordinated debentures were dilutive during the first 39 weeks of
fiscal 1996 (see Exhibit 11.1).  Had the debentures not been dilutive, net
income per share for the 39 weeks ended October 25, 1996 would have been $0.77
(primary net income per share).  The 92% increase in net income was due to the
factors discussed below.

     Weighted average common and common equivalent shares outstanding for use in
the primary earnings per share calculation increased 5% from 23,094,000 as of
October 27, 1995, to 24,217,000 as of October 25, 1996.  The primary reason for
this increase was the completion of a public stock offering in September 1996
which resulted in the issuance of 5,750,000 shares of Common Stock.

     NET SALES.  Net sales for the first 39 weeks of fiscal 1996 were 
$568,915,000, compared to net sales of $457,745,000 for the comparable prior 
year period.  This 24% increase in net sales over the prior year 39-week 
period was due primarily to a 15% increase in store weeks of operations and 
an 11% increase in same store sales for the period.  Same store sales 
increased primarily as a result of a 9% increase in the number of 
transactions.  The increase of 11% in same store sales during the 39-week 
period compares to a decrease of 9% for the first 39 weeks of fiscal 1995.  
Management attributes the increase in same store sales to several factors, 
including strong existing home sales, favorable economic conditions in most 
of the Company's markets and the declining performance of a primary 
competitor, Ernst Home Center, Inc.   Ernst filed for Chapter 11 bankruptcy 
protection in July 1996 and subsequently obtained approval from the court in 
November 1996 to conduct a Chapter 7 orderly liquidation of assets.  
Liquidation of the remaining Ernst stores began on November 23, 1996.

     GROSS MARGIN.  The Company's gross margin was $158,255,000 for the first 39
weeks of fiscal 1996.  This represents an increase of $35,030,000, or 28%, over
the first 39 weeks of fiscal 1995.  As a percentage of net sales, gross margin
was 27.8% in the first 39 weeks of fiscal 1996 versus 26.9% in the comparable
prior year period.  Management attributes the improvement in gross margin as a
percentage of net sales to a combination of factors, including volume-related
buying efficiencies, a reduction in realized inventory shrinkage (attributed
primarily to continuing loss prevention programs) and less promotional pricing
by competitors.  In addition, the prior year gross margin was lower due to the
opening of five new stores during the first 39 weeks of fiscal 1995 (versus one
store opening thus far in fiscal 1996) and related grand opening promotional
pricing.

                                        5

<PAGE>

     OPERATING EXPENSES.  Operating expenses as a percentage of net sales
decreased from 22.5% in the first 39 weeks of fiscal 1995 to 22.2% in the first
39 weeks of fiscal 1996, primarily as a result of additional leverage
attributable to the 11% increase in same store sales.  The dollar amount of
operating expenses increased by $23,161,000, or 23%, from the comparable prior
year period, primarily as a result of the 15% increase in store weeks of
operations and the 11% increase in same store sales.  Operating expense leverage
in the first 39 weeks of fiscal 1996 would have been greater had it not been for
the Company's decision to increase staffing on the sales floor to support
increased levels of customer traffic and to further its ongoing commitment to
providing a high level of customer service.

     PREOPENING EXPENSES.    Preopening expenses were $504,000, or 0.1% of net
sales, in the first 39 weeks of fiscal 1996, during which the Company opened one
store.  In the comparable prior year period, when the Company opened five
stores, preopening expenses were $2,934,000, or 0.6% of net sales.

     OPERATING INCOME.  For the reasons explained above, operating income
increased 82%, from $17,353,000 in the first 39 weeks of fiscal 1995 to
$31,652,000 in the first 39 weeks of fiscal 1996.  Expressed as a percentage of
net sales, operating income improved from 3.8% in the first 39 weeks of fiscal
1995 to 5.6% in the comparable current year period.

     INTEREST EXPENSE.  Net interest expense during the first 39 weeks of fiscal
1996 was $6,108,000, compared to $4,925,000 during the comparable prior year
period.  This increase was due primarily to interest on additional long-term
borrowings made during the fourth quarter of fiscal 1995 and the second quarter
of fiscal 1996 and higher average borrowings on the Company's bank line of
credit compared to the prior year.  Interest on the Company's convertible
subordinated debentures, which represent the primary source of interest expense,
was comparable between the current and prior year.  During both periods,
interest incurred was partially offset by interest capitalized on construction
projects.

     OTHER INCOME.  Other income for the first 39 weeks of fiscal 1996 consisted
mostly of a $2,108,000 capital gain on the sale of surplus land located in
Lynnwood, Washington.  Other income for the first 39 weeks of fiscal 1995
consisted primarily of $1,125,000 related to the settlement of securities
litigation and $818,000 in capital gains recognized on the sale of surplus
property in Utah.

     INCOME TAXES.  The Company recorded a combined federal and state tax
provision of $9,278,000 for the first 39 weeks of fiscal 1996, compared to a
provision of $4,776,000 during the comparable prior year period.  The effective
tax rate for the first 39 weeks of fiscal 1996 was 33.3% versus 33.0% in the
first 39 weeks of fiscal 1995.  The 1996 effective tax rate for the first 39
weeks was lower than the combined federal and state statutory tax rates that the
Company expects to pay under normal circumstances for two reasons.  First,
$2,189,000 in capital gains recorded during the period was not taxable due to
the utilization of a portion of the Company's capital loss carryforward incurred
in the fourth quarter of fiscal 1994.  Second, a portion of the Company's net
proceeds from the stock offering was invested in tax-exempt securities, which
resulted in a lower expected effective tax rate for the year.

     The 1995 effective tax rate for the first 39 weeks was lower than the
combined federal and state statutory tax rates due primarily to the utilization
of a portion of the Company's capital loss carryforward.  The capital loss
carryforward was used to offset capital gains realized on the sale of surplus
land in Utah and the recovery of a previously reserved receivable relating to
the sale of land in Canada.

                                        6

<PAGE>

     LIQUIDITY AND CAPITAL RESOURCES -

     On September 20, 1996, the Company completed a public offering of 5,750,000
shares of Common Stock.  All shares were offered by the Company and net proceeds
totaled approximately $125 million.  Of the net proceeds, $42.2 million was used
to pay off credit line borrowings and the balance will be used to finance the
Company's ongoing store expansion plans and for general corporate purposes.
Pending such uses, the net proceeds have been invested in highly liquid
investment grade securities.

     The Company opened a store in Wenatchee, Washington on August 22.  This 
store is the first Eagle store built in a new format designed for smaller 
population centers. In addition to the Wenatchee store, the Company's fiscal 
1996 expansion plans include stores under construction in Pueblo and 
Louisville, Colorado, both of which are scheduled to open during the fourth 
quarter of fiscal 1996.  The Company also has stores under construction in 
North Seattle and Tacoma, Washington, and Kahului (Maui), Hawaii.  In 
addition to these stores, which are currently scheduled to open in early 
fiscal 1997, the Company has signed purchase agreements for two sites planned 
for opening in fiscal 1997 in the Denver, Colorado market.  The Company 
continues to review additional sites for future expansion.

     The Company's balance sheet at October 25, 1996, reflects a $148.0 million
(40%) increase in total assets since the fiscal year began on January 27.  The
principal components of this change are an increase of $70.3 million in cash and
cash equivalents and short-term investments, a $23.1 million increase in
inventories and an increase of $55.2 million in net property and equipment.  The
increase in cash and cash equivalents and short-term investments  was due
primarily to the recently completed Common Stock offering.  The increase in
inventories was due primarily to the higher sales volumes as well as the opening
of an additional store during the first 39 weeks of fiscal 1996.  The increase
in net property and equipment was attributable primarily to the Company's
continuing store expansion program.  Financing for this expansion was provided
primarily by cash flow from operations and proceeds from the offering.
Additional financing was provided by a $9.0 million mortgage executed during the
second quarter and a sale of surplus land that provided another $7.4 million.

     The Company's capital requirements are influenced by its expansion plans 
and by factors such as real estate costs in the markets which the Company 
enters, whether that real estate will be purchased or leased and the extent 
of Company-financed remodeling required when existing buildings are acquired 
or leased.  The Company presently expects to finance its expansion plans for 
the remainder of fiscal 1996 and for fiscal 1997 through a combination of 
cash flow from operations, proceeds from the September 1996 Common Stock 
offering and mortgages and/or sale-leasebacks of owned properties.

     The Company reports on a 52/53-week year.  Fiscal 1996 is a 53-week year
and the fourth quarter will consist of 14 weeks.  The fiscal year ends on the
last Friday in January.


     FORWARD-LOOKING STATEMENTS -

     Some of the information in this report constitutes forward-looking
statements.  These statements are subject to a number of risks and uncertainties
that might cause actual results to differ materially from stated expectations.
These risks include, among others, the highly competitive environment in the
retail home improvement industry, the effect of general economic conditions and
weather in the Company's markets and the Company's ability to achieve its
expansion plans and successfully manage its growth.  These risks are described
in detail in the Company's Annual Report on Form 10-K and other SEC filings.

                                        7

<PAGE>


PART II - OTHER INFORMATION:


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

(a) Exhibits filed with this Form 10-Q are as follows:

     10.99B    Supplement No. 103 and Supplement No. 104 under Retail Technology
               Exchange Agreement by and between Fujitsu-ICL Systems, Inc. and
               Eagle Hardware & Garden, Inc.

     10.103A   First Amendment to Real Estate Purchase and Sale Agreement dated
               August 1996, by and between Terrace Point Partnership, Inc. and
               Eagle Hardware & Garden, Inc.

     10.112    Agreement for Purchase and Sale of Real Property dated   
               September 5, 1996, by Northglenn Partners, L.P. and Eagle 
               Hardware & Garden, Inc.

     10.113    Real Estate Purchase and Sale Agreement dated October 6, 1996, by
               and between Eagle Hardware & Garden, Inc. and The Good Guys--
               California, Inc.

     10.114    Stipulation and Order of Appropriation and Judgment by the
               Superior Court of Washington for Snohomish County dated 
               September 24, 1996.

     11.1      Statement Regarding Computation of Per Share Earnings.

(b) No reports on Form 8-K were filed during the third quarter of fiscal 1996.

                                        8

<PAGE>

SIGNATURES:


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



                                  EAGLE HARDWARE & GARDEN, INC.
                                  -----------------------------
                                  Registrant



December 4, 1996                  /s/ David J. Heerensperger
----------------                  -------------------------------------
Date                              David J. Heerensperger
                                  Chairman and Chief Executive Officer
                                  (Principal Executive Officer)



December 4, 1996                  /s/ Richard T. Takata
----------------                  -------------------------------------
Date                              Richard T. Takata
                                  President and Chief Operating Officer


December 4, 1996                  /s/ Ronald P. Maccarone
----------------                  -------------------------------------
Date                              Ronald P. Maccarone
                                  Executive Vice-President-Finance and Chief
                                  Financial Officer (Principal Financial
                                  Officer)



December 4, 1996                  /s/ Steven M. Stenberg
----------------                  -------------------------------------
Date                              Steven M. Stenberg
                                  Controller and Treasurer

                                        9

<PAGE>

                          EAGLE HARDWARE & GARDEN, INC.
                           CONSOLIDATED BALANCE SHEETS
                                      [000]

                                                         (UNAUDITED)
                                                         OCTOBER 25, JANUARY 26,
                                                            1996        1996
                                                         ----------- -----------
                         ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                                 $44,900       $6,591
 Short-term investments                                     32,035            0
 Trade and other accounts receivable, net                    5,230        3,594
 Merchandise inventories                                   166,173      143,094
 Prepaid expenses                                            3,088        2,076
 Deferred income taxes                                       3,473        1,571
                                                        ----------   ----------
     Total current assets                                  254,899      156,926
                                                        ----------   ----------

PROPERTY AND EQUIPMENT, at cost:
 Land and buildings                                        139,851      105,725
 Furniture, fixtures and equipment                          72,882       64,486
 Leasehold improvements                                     45,365       45,035
 Construction in progress                                   24,605        4,743
                                                        ----------   ----------
                                                           282,703      219,989
 Less accumulated depreciation and amortization             26,378       18,836
                                                        ----------   ----------
     Net property and equipment                            256,325      201,153
                                                        ----------   ----------

PREOPENING COSTS                                               547            7
OTHER ASSETS                                                 2,766        8,481
                                                        ----------   ----------
     Total assets                                         $514,537     $366,567
                                                        ----------   ----------
                                                        ----------   ----------

                      LIABILITIES & SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
 Checks drawn in excess of bank balances                    $9,538       $8,859
 Accounts payable                                           52,999       32,226
 Note payable to bank                                            0       34,500
 Sales taxes payable                                         8,526        3,945
 Accrued payroll and related expenses                       13,103        8,648
 Other current liabilities                                   7,138        7,159
 Current portion of long-term debt                           2,030        6,198
                                                        ----------   ----------
     Total current liabilities                              93,334      101,535
                                                        ----------   ----------

DEFERRED INCOME TAXES                                        7,185        5,042
OTHER LONG-TERM LIABILITIES                                  3,096        2,847
LONG-TERM DEBT                                             108,967      101,542
                                                        ----------   ----------
     Total liabilities                                     212,582      210,966
                                                        ----------   ----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
 Common stock, without par value; 50,000 shares
   authorized; 28,866 and 22,900 shares issued
   and outstanding                                         263,455      135,721
 Retained earnings                                          38,500       19,880
                                                        ----------   ----------
     Total shareholders' equity                            301,955      155,601
                                                        ----------   ----------
     Total liabilities & shareholders' equity             $514,537     $366,567
                                                        ----------   ----------
                                                        ----------   ----------
          See accompanying notes to consolidated financial statements.

                                       10
<PAGE>

                          EAGLE HARDWARE & GARDEN, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   [000, EXCEPT STORE WEEK AND PER SHARE DATA]
                                   [UNAUDITED]


                                     13 WEEKS ENDED          39 WEEKS ENDED
                                 ----------------------- -----------------------
                                 OCTOBER 25, OCTOBER 27, OCTOBER 25, OCTOBER 27,
                                    1996        1995        1996        1995
                                 ----------- ----------- ----------- -----------
STORE WEEKS IN PERIOD                 [321]       [302]       [945]       [823]

NET SALES                         $198,731    $159,764    $568,915    $457,745
COST OF SALES                      144,071     116,605     410,660     334,520
                                 ----------- ----------- ----------- -----------
     Gross margin                   54,660      43,159     158,255     123,225

OPERATING EXPENSES                  44,334      36,061     126,099     102,938
PREOPENING EXPENSES                    504       1,266         504       2,934
                                 ----------- ----------- ----------- -----------
     Operating income                9,822       5,832      31,652      17,353

OTHER INCOME (EXPENSE):
 Net interest (expense)             (1,493)     (2,044)     (6,108)     (4,925)
 Other income                        2,209          27       2,354       2,054
                                 ----------- ----------- ----------- -----------
     Income before tax              10,538       3,815      27,898      14,482

INCOME TAX PROVISION                 2,947       1,342       9,278       4,776
                                 ----------- ----------- ----------- -----------
     Net income                     $7,591      $2,473     $18,620      $9,706
                                 ----------- ----------- ----------- -----------
                                 ----------- ----------- ----------- -----------

 NET INCOME PER SHARE (SEE
 EXHIBIT 11.1 FOR DETAILED
 COMPUTATIONS):

     Net income per share,
        primary                      $0.29       $0.11       $0.77       $0.42

     Net income per share,
        fully diluted                $0.28       $0.11       $0.74       $0.42


          See accompanying notes to consolidated financial statements.

                                       11

<PAGE>

                          EAGLE HARDWARE & GARDEN, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      [000]
                                   [UNAUDITED]

                                                            39 WEEKS ENDED
                                                        ------------------------
                                                        OCTOBER 25,  OCTOBER 27,
                                                           1996         1995
                                                        -----------  -----------
OPERATING ACTIVITIES:
 Net income                                               $18,620      $9,706
                                                        -----------  -----------

 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                            8,382       6,542
   Net gain on asset sales                                 (2,189)       (736)
   Deferred income taxes                                      241         656
   Changes in operating assets and liabilities:
    Trade and other accounts receivable                    (1,636)       (410)
    Merchandise inventories                               (23,079)    (14,363)
    Prepaid expenses                                         (242)        (14)
    Other assets                                              693         470
    Preopening costs                                         (540)        224
    Accounts payable and checks drawn in excess of
      bank balances                                        21,452       5,308
    Income taxes payable                                   (1,851)      2,554
    Accrued liabilities                                    10,097       2,819
    Other                                                     249       1,419
                                                        -----------  -----------
                                                           11,577       4,469
                                                        -----------  -----------
     Net cash provided by operating activities             30,197      14,175
                                                        -----------  -----------

INVESTING ACTIVITIES:
 Capital expenditures for property and equipment          (64,493)    (42,350)
 Net purchases of short-term investments                  (32,035)          0
 Proceeds on sale of surplus land                           7,422       3,718
 Other                                                      1,019           0
                                                        -----------  -----------
     Net cash used in investing activities                (88,087)    (38,632)
                                                        -----------  -----------

FINANCING ACTIVITIES:
 Advances on note payable to bank                         292,100     248,800
 Payments on note payable to bank                        (326,600)   (220,300)
 Net proceeds of stock offering                           124,855           0
 Net proceeds (payments) on long-term borrowings            3,366      (5,717)
 Other                                                      2,478         417
                                                        -----------  -----------
     Net cash provided by financing activities             96,199      23,200
                                                        -----------  -----------
     Increase (decrease) in cash and cash equivalents      38,309      (1,257)
Cash and cash equivalents at beginning of period            6,591       5,440
                                                        -----------  -----------
     Cash and cash equivalents at end of period           $44,900      $4,183
                                                        -----------  -----------
                                                        -----------  -----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 Cash paid for -
    Interest                                              $10,474      $7,844
    Income taxes                                           $9,327      $1,271

          See accompanying notes to consolidated financial statements.

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<PAGE>

EAGLE HARDWARE & GARDEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


1.        The accompanying unaudited consolidated financial statements do not
purport to be full presentations, and do not include all information and
disclosures required for fair presentation by generally accepted accounting
principles.  However, in the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting of normal
recurring accruals) considered necessary to present fairly the consolidated
financial position of the Company at October 25, 1996, the consolidated results
of operations for the 13-week and 39-week periods ended October 25, 1996, and
October 27, 1995, and consolidated cash flows for the 39-week periods then
ended.  These financial statements should be read in conjunction with the
financial statements included in the Company's Annual Report on Form 10-K for
the fiscal year ended January 26, 1996, filed with the Securities and Exchange
Commission.


2.        The results of operations for the 13- and 39-week periods ended
October 25, 1996, are not necessarily indicative of the results to be expected
for the full fiscal year.  The Company expects that its gross margin percentage
will generally be lower in the second and third quarters of each fiscal year
when sales of lower margin products are greater.  The Company also expects that,
in general, individual stores will experience lower net sales and operating
income and that cash flow from operations will be lower in the fourth quarter of
the fiscal year than in any of the other quarters, due primarily to the effect
of winter weather on home improvement projects and the lack of significant sales
of lawn and garden products during this period.  In addition, unusual weather
conditions could have a material adverse effect on seasonal sales.

          "Store Weeks in Period" represents the aggregate number of full weeks
in which stores were open during the reporting period.


3.        During the quarter, the Company sold a parcel of surplus land located
in Lynnwood, Washington, and recorded a capital gain of $2,108,000.  The capital
gain is included in Other Income.


4.        The Company recorded an effective tax rate of 28.0% for the quarter,
which is less than the Company's estimated effective tax rate for the year.  The
third quarter effective tax rate was lower than the combined federal and state
statutory tax rates due primarily to the utilization of a portion of the
Company's capital loss carryforward incurred in the fourth quarter of fiscal
1994.  The capital loss carryforward was used to offset a capital gain realized
on the sale of surplus land in Lynnwood, Washington.  The event which resulted
in this capital gain caused a revision to the valuation allowance previously
established against the deferred tax benefit of the capital loss carryforward.
In accordance with Financial Accounting Standard No. 109, the effect of this
event was recognized entirely in the third quarter of fiscal 1996.  In addition
to the capital gain, tax-exempt investment income contributed to the decrease in
the Company's effective tax rate.


5.        As of December 4, 1996, the Company had completed the purchases of
sites for four future store locations and had signed agreements to purchase
property for two additional sites at a cost of approximately $6,400,000.
Purchase of the latter sites will be finalized upon successful resolution of
various contingencies.

                                       13

<PAGE>

6.        On September 20, 1996, the Company completed a public offering of
5,750,000 shares of Common Stock at $22 7/8 per share.  Net proceeds to the
Company totaled approximately $125 million.

                                       14