1


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


                                       SECURITIES AND EXCHANGE COMMISSION
                                             Washington, D.C. 20549

                                                  ============
                                                    FORM 10-Q
                                                  ============

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

                               For the quarterly period ended May 4, 2002




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

                                         Commission file number 1-11609

                                                TOYS "R" US, INC.
                                  Incorporated pursuant to the Laws of Delaware

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


              Internal Revenue Service - Employer Identification No. 22-3260693
                                    461 From Road, Paramus, New Jersey 07652
                                                 (201) 262-7800

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  [  ]

212,374,020 shares of the registrant's Common Stock were outstanding on
June 10, 2002.



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


<PAGE>












                                                       INDEX



                                                                           PAGE

PART I - FINANCIAL INFORMATION

  Item 1. Financial Statements


     Condensed Consolidated Balance Sheets.............................      2


     Condensed Consolidated Statements of Operations.............            3


     Condensed Consolidated Statements of Cash Flows...........              4


     Notes to Condensed Consolidated Financial
       Statements............................................................5.



   Item  2.   Management's   Discussion  and  Analysis  of  Results
                          of  Operations  and  Financial
      Condition..............................................................10


PART II - OTHER INFORMATION..........................................        15


SIGNATURES.....................   ...........................................16





                                                         1


<PAGE>
<TABLE>



                                        TOYS "R" US, INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                                    (Unaudited)
                                    ==========================================
                                                   (In millions)

ASSETS                            May 4,            May 5,          February 2,
------
                                  2002              2001              2002
                             ---------------- ------------------ --------------
<CAPTION>
<S>                               <C>               <C>                <C>

Current Assets:
 Cash and cash equivalents        $  452       $        291        $     283
 Accounts and other receivables      178                145              210
 Merchandise inventories           2,241              2,353            2,041
 Prepaid expenses and other
             current assets          115                110               97
                            ---------------- ----------------- ----------------
 Total current assets              2,986              2,899            2,631

Property and equipment, net        4,577              4,252            4,544
Goodwill, net                        348                358              348
Other assets                         536                499              553
                           ---------------- ------------------ ----------------
                                 $ 8,447       $      8,008        $    8,076

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
 Short-term borrowings          $     7         $      641         $     -
 Accounts payable                   931                958              878
 Accrued expenses and
     other current liabilities      560                558              777
 Income taxes payable               256                233              345
                             ---------------    --------------- ---------------
    Total current liabilities     1,754              2,390            2,000

Long-term debt                    2,383              1,566            1,816
Deferred income taxes               447                402              395
Other liabilities                   349                189              398

Minority interest in Toysrus.com     50                 66               53

Stockholders' equity              3,464              3,395            3,414
                           ----------------- ------------------ ----------------
                               $  8,447         $    8,008          $ 8,076
                           ================= ================== ================


                  See notes to condensed consolidated financial statements.
<FN>
</FN>
</TABLE>


                                                             2


<PAGE>
<TABLE>



                       TOYS "R" US, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Unaudited)
              ===================================================
                      (In millions, except per share data)
<CAPTION>

                                  13 Weeks Ended
              -----------------------------------------------------------
                                May 4, 2002                  May 5, 2001
<S>                                    <C>                         <C>
                       -------------------------        ------------------------
Net sales                      $      2,095                 $      2,061
Cost of sales                         1,413                        1,396
                       -------------------------        ------------------------
       Gross Margin                     682                          665

Selling, general and
      administrative expenses           581                          590
Depreciation and amortization            79                           73
                          -----------------------       ------------------------
  Total Operating Expenses              660                          663

   Operating Earnings                    22                            2

     Interest expense - net              28                           30
                         -------------------------      ------------------------

Loss before income tax benefit           (6)                        (28)
 Income tax benefit                      (2)                        (10)
                         -------------------------      ------------------------

Net loss                         $       (4)                   $    (18)
                         ==========================     ========================


Basic and diluted loss
          per share              $     (0.02)                  $   (0.09)
                         ==========================     ========================

Weighted average basic and
 diluted shares outstanding            197.0                       197.6
                         ==========================     ========================
<FN>
</FN>
</TABLE>

                   See notes to condensed consolidated financial statements.



                                        3


<PAGE>
<TABLE>


                       TOYS "R" US, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
              ====================================================
                                  (In millions)
<CAPTION>

                                                  13 Weeks Ended
                                        -------------------------------------
                                          May 4,2002               May 5,2001
                                         ----------------  -------------------
<S>                                           <C>                    <C>
Cash Flows from Operating Activities:
Net loss                                   $     (4)          $        (18)
Adjustments to reconcile net loss
     to net cash from operating activities:
   Depreciation and amortization                 79                     73
   Minority interest in Toysrus.com              (3)                    (4)
   Other                                           -                    (5)
   Changes in operating assets
                and liabilities:
     Merchandise inventories                    (188)                  (60)
     Accounts payable and
         other operting liabilities             (203)                 (483)
     Other operating assets                       (3)                   60
                                          ----------------  -------------------
Net cash from operating activities               (322)                (437)
                                          ----------------  -------------------

Cash Flows from Investing Activities:
Capital expenditures, net                         (57)                 (97)
                                          ----------------  -------------------

Cash Flows from Financing Activities:
Short-term borrowings, net                          7                   54
Long-term borrowings                              670                  466
Long-term debt repayment                         (135)                   -
Exercise of stock options                           -                   10
                                          ----------------  -------------------
Net cash from financing activities                542                  530
                                          ----------------  -------------------

Effect of exchange rate changes on cash
           and cash equivalents                     6                   20

Cash and Cash Equivalents:
Increase during period                             169                  16
Beginning of period                                283                 275
                                          ----------------  -------------------
End of period                               $      452         $       291
                                          ================  ===================

Supplemental disclosures of cash flow information:
Income tax payments / (refunds), net       $        23         $       (22)
                                          ================  ===================
Interest paid                              $        49     $            25
                                          ================  ===================



                   See notes to condensed consolidated financial statements.
<FN>
</FN>
</TABLE>

                                        4


<PAGE>


                       TOYS "R" US, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            ==========================================================

1.       Interim reporting
         The interim condensed consolidated financial statements are unaudited
         and are subject to year-end adjustments. However, in the opinion of
         management, all known adjustments (which consist primarily of normal
         recurring accruals), have been made and the interim financial
         statements present fairly the consolidated financial condition and
         operating results for the unaudited periods. Because of the seasonal
         nature of the company's business, results for interim periods are not
         indicative of results to be expected for the fiscal year.

         The financial statements and notes are presented in accordance with the
         rules and regulations of the Securities and Exchange Commission and do
         not contain certain information included in the company's annual
         report. Therefore, the interim statements should be read in conjunction
         with the company's annual report for the fiscal year ended February 2,
         2002.

2.       Reclassification
         Certain amounts in the quarter ended May 5, 2001 have been reclassified
         to conform to the quarter ended May 4, 2002 presentation.

3.       Short-term borrowings
         On May 28, 2002, the company refinanced its short-term borrowings by
         issuing equity and equity-linked securities, as described in the
         subsequent event note to the condensed consolidated financial
         statements, and accordingly, $393 million of commercial paper and $117
         million of revolving credit borrowings outstanding at May 4, 2002 have
         been reclassified to long-term debt.
         At May 5, 2001, the company classified $368 million of commercial paper
         as long-term debt, as the company maintained long-term committed
         agreements to support these borrowings and subsequently refinanced
         these borrowings on a long-term basis. Additionally, commercial paper
         of $609 was included in short term-borrowings at May 5, 2001.

4.       Comprehensive income
         Comprehensive income / (loss) was $28 million and ($34) million for the
         quarters ended May 4, 2002 and May 5, 2001, respectively, primarily as
         a result of the change in foreign currency translation.

5.       Investment in Toys - Japan
         The company accounts for its investment in the common stock of Toys -
         Japan on the "equity method" of accounting since the initial public
         offering on April 24, 2000. As part of the initial public offering,
         Toys - Japan issued 1,300,000 shares of new common stock to the public
         at a price of 12,000 yen or $113.95 per share. The company's accounting
         policy for the sales of subsidiaries' stock is to recognize gains or
         losses for value received in excess of or less than its basis in such
         subsidiary. At the present time, no similar issuances of subsidiaries'
         stock are under consideration. The carrying value of the investment is
         reflected on the condensed consolidated balance sheets as part of
         "Other assets." At May 4, 2002, the quoted market value of the
         company's investment was $356 million, which exceeds the carrying value
         of the investment. The valuation represents a mathematical calculation
         based on the closing quotation published by the Tokyo over-the-counter
         market and is not necessarily indicative of the amount that could be
         realized upon sale.
                                        5

<PAGE>
<TABLE>

6.       Toysrus.com
         Toysrus.com operates a co-branded toy and video games on-line store,
         which was launched in the third quarter of 2000 and a co-branded baby
         products on-line store, which was launched in May 2001 under a
         strategic alliance with Amazon.com, which expires in 2010. Under this
         alliance each company is responsible for specific aspects of the
         on-line stores. Toysrus.com is responsible for merchandising and
         content for the co-branded stores. Toysrus.com also identifies, buys,
         owns and manages the inventory. Amazon.com handles web site
         development, order fulfillment, customer service, and the housing of
         Toysrus.com's inventory in Amazon.com's U.S. distribution centers.
         The company recognizes revenue for Toysrus.com at the point in time
         when merchandise is shipped to consumers, in accordance with the
         shipping terms (FOB shipping point) that exist under the agreement with
         Amazon.com.

7.       Cost of sales and selling, general and administrative expenses
         ----------------------------------------------------------------
         The significant components of the line item "Cost of sales" include the
         cost to acquire merchandise from vendors; freight in; markdowns at
         cost; provision for inventory shortages; and discounts and allowances.
         The significant components of the line item "Selling, general and
         administrative expenses" include store payroll and related payroll
         benefits; rent and other store operating expenses; net advertising
         expenses; costs associated with operating the company's distribution
         network that primarily relate to moving merchandise from distribution
         centers to stores; and other corporate-related expenses.

8.       Long-term debt
         On March 19, 2002, the company refinanced a note payable originally due
         2005 and increased the amount outstanding to $160 million from $100
         million. This borrowing is repayable in semi-annual installments, with
         the final installment due on February 20, 2008. The effective cost of
         this borrowing is 2.23% and is secured by expected future cash flows
         from license fees due from Toys - Japan.

9.       Restructuring, non-recurring and other charges
         In January 2002, the company recorded restructuring and other charges
         of $237 million ($126 million net of taxes and after reversals from
         1998 and 1995 restructuring charges) for the closing of 37 Kids "R" Us
         store locations, 27 Toys "R" Us store locations, the consolidation of
         five store support center facilities and the elimination of
         approximately 1,900 staff positions at stores and headquarters. See the
         company's annual report for the year ended February 2, 2002 for details
         on these charges. The subsequent utilization and remaining reserve
         balances are as follows:


                             Reserve Balance                    Reserve Balance
Description                     @ 02/02/02         Utilized          @ 05/04/02
<S>                                  <C>              <C>              <C>
----------------------------- --------------- --------------- ------------------
Store Closings:
    Lease commitments                $52            $ -                 $ 52
    Severance                          4              -                    4
    Markdowns                         27              1                   26
Store Support Center Consolidation:
    Lease commitments                 28              -                   28
    Severance                         15              4                   11
----------------------------- ---------------- --------------- -----------------
Total remaining restructuring
        and other charges           $126            $ 5                $ 121
<FN>
</FN>
</TABLE>



                                               6
<PAGE>
<TABLE>

In 2000, the company's subsidiary Toysrus.com recorded $118 million in
non-recurring charges as a result of the transition to the co-branded on-line
store with Amazon.com. See the company's annual report for the year ended
February 2, 2002 for further descriptions of these charges. Details on the
components of these non-recurring costs and charges are detailed below as well
as the utilization and remaining reserve balances:


                                                      Reserve
                             Initial     Utilized     Balance          Utilized
Description                   Charge     in 2000     @ 02/03/01        in 2001
------------------------  ----------   -----------    ----------- --------------
<S>                            <C>         <C>           <C>              <C>
Distribution Centers and
Web-site:
  Write-down of property
    and equipment             $ 75        $ 75              $ -          $ -
  Lease commitments             10           1                9            6
  Severance and other costs     23          21                2            2
Inventory Markdowns             10           6                4            4
------------------------- ----------- ----------- ---------------- ------------
Total non-recurring costs
  and charges                $ 118       $ 103             $ 15         $ 12
------------------------- ----------- ----------- ---------------- ------------
<FN>
</FN>


                              Reserve                      Reserve
                              Balance        Utilized       Balance
Description                  @ 02/02/02       in 2002     @ 05/04/02
------------------------   ----------------- ----------- -----------------
<CAPTION>
<S>                               <C>             <C>          <C>
Distribution Centers and
Web-site:
  Write-down of property
    and equipment                $ -         $ -               $ -
  Lease commitments                3           -                 3
  Severance and other costs        -           -                 -
Inventory Markdowns                -           -                 -
------------------------  ----------------- ----------- -----------------
Total non-recurring costs
and charges                       $3         $ -               $ 3
------------------------  ----------------- ----------- -----------------
<FN>
</FN>


In 1998, the company recorded restructuring and other non-recurring charges of
$698 million ($508 million net of tax benefits) to strategically reposition its
worldwide business. See the company's annual report for the year ended
February 2, 2002 for details on these charges. We recorded $59 million of other
charges as part of this restructuring consisting of $35 million related to
provisions for legal settlements; $18 million for charges related to the
write-off of certain vendor and other receivables; and $6 million of
miscellaneous write-offs of other assets that were determined to have no
realizable value. The $59 million of other charges had been fully
utilized/reversed as of February 2, 2002. The subsequent utilization and
remaining reserve balances and are as follows:

                      Reserve Balance                        Reserve Balance
Description             @ 02/02/02         Utilized            @ 05/04/02
------------------ ------------------- ----------------- ----------------------
<CAPTION>
<S>                       <C>                 <C>                 <C>
Closings/downsizings:
  Lease commitments         $25                $ 3                  $ 22
  Severance and
   other closing costs       6                   -                     6
------------------ ------------------- ----------------- ----------------------
Total remaining
   restructuring charges    $31                $ 3                  $ 28


<FN>
</FN>
</TABLE>

                                        7
<PAGE>
<TABLE>

10.      Segments
         Information related to the various company segments is as follows:
         (In millions)
         --------------------------------------------------------------------
                                                     13 Weeks Ended
                                            -----------------------------------
                                             May 4,                May 5,
                                             2002                   2001
         ----------------------------------------------------------------------
          <CAPTION>
          <S>                                    <C>                  <C>
         Net sales
             Toys "R" Us - U.S.             $   1,202            $    1,227
             Toys "R" Us - International          307                   285
             Babies "R" Us                        413                   370
             Toysrus.com                           46                    29
             Kids "R" Us                          127                   150
         ----------------------------------------------------------------------
         Total                              $   2,095            $    2,061
         ----------------------------------------------------------------------
         Operating earnings / (loss)
             Toys "R" Us - U.S.             $      25            $       16
             Toys "R" Us - International          (14)                  (12)
             Babies "R" Us                         49                    40
             Toysrus.com, net of
                minority interest                 (14)                  (24)
             Other                                (24)                  (18)
                                           ------------------------------------
         Operating earnings                        22                     2

         Interest expense, net                    (28)                  (30)
         ----------------------------------------------------------------------
         Loss before income tax benefit     $     (6)             $     (28)
         ----------------------------------------------------------------------

         Included in the category classified as "Other" are the operating
         results of the Kids "R" Us division and equity in the net earnings of
         Toys - Japan, as well as other corporate related items.

11.      Derivative Instruments and Hedging Activities
         The company is exposed to market risk from potential changes in
         interest rates and foreign exchange rates. The company continues to
         regularly evaluate these risks and continues to take measures to
         mitigate these risks, including, among other measures, entering into
         derivative financial instruments to hedge a variety of risk exposures
         including interest rate and currency risks.
         The company enters into forward exchange contracts to minimize and
         manage the currency risks related to its import merchandise purchase
         program. The company did not realize any material gain or loss related
         to these transactions in the first quarters of 2002 or 2001. In
         addition, the unrealized loss included in other comprehensive income at
         May 4, 2002 and May 5, 2001 was not material to the company's
         consolidated financial condition.
         The company has entered into interest rate swaps to manage interest
         rate risk and strive to achieve what it believes is an acceptable
         balance between fixed and variable rate debt. The company has reduced
         the carrying value of its long-term debt by $50 million at May 4, 2002,
         representing the carrying amount of the debt in excess of fair value at
         that date. Also at May 4, 2002, the company has recorded derivative
         assets of $23 million and derivative liabilities of $75 million,
         representing the fair value of these derivatives at that date. The
         derivative assets are reflected on the condensed consolidated balance
         sheets as part of "Other assets." The derivative liabilities are
         reflected on the condensed consolidated balance sheets as part of
         "Other liabilities."

<FN>
</FN>
</TABLE>
                                                                       8
<PAGE>

12.      Allowances and credits received from vendors
         Credits and allowances are received from vendors and are related to
         formal agreements negotiated with such vendors. These credits and
         allowances are predominately for cooperative advertising, promotions,
         and volume related purchases. These credits and allowances, excluding
         advertising allowances, are netted against cost of sales. The company's
         policy is to recognize these types of credits related directly to
         inventory purchases as inventory is sold. Cooperative advertising
         allowances offset the cost of cooperative advertising that is agreed to
         by the company and its vendors. These cooperative advertising
         allowances are netted against advertising expenses included in selling,
         general and administrative expenses. The company's policy is to
         recognize cooperative advertising allowances in the period that the
         related advertising media is run.

13.      Recent Accounting Pronouncements
         In August 2001, the Financial Accounting Standards Board issued SFAS
         No. 144, "Accounting for the Impairment or Disposal of Long-Lived
         Assets," which addresses financial accounting and reporting for the
         impairment or disposal of long-lived assets and supersedes SFAS No.
         121, "Accounting for the Impairment of Long-Lived Assets and for
         Long-Lived Assets to be Disposed Of." The company adopted SFAS No. 144
         as of February 3, 2002 and the adoption did not have a significant
         effect on the company's consolidated financial condition, results of
         operations and cash flow.

         In July 2001, the Financial Accounting Standards Board issued SFAS No.
         142, "Goodwill and Other Intangible Assets," which is effective for
         fiscal years beginning after December 15, 2001. SFAS No. 142 changes
         the accounting for goodwill from an amortization method to an
         impairment only approach. The company has adopted this pronouncement on
         February 3, 2002. As a result of this adoption, $348 million of
         goodwill, which was to be amortized ratably through 2037, ceased. Based
         on the historical and projected operating results of the reporting
         units to which the goodwill relates, the company has determined that no
         impairment of this goodwill exists. Application of the non-amortization
         provisions of SFAS No. 142 resulted in a diminution of net loss of $2
         million for the quarter ended May 4, 2002. Had the non-amortization
         provisions of SFAS No. 142 been applied for the quarter ended May 5,
         2001, the company would have reported an adjusted net loss of ($16)
         million and a basic and diluted loss per share of ($0.08).

14.      Subsequent Event
         On May 28, 2002, the company completed its previously announced public
         offerings of Toys "R" Us equity and equity-linked securities. On that
         date, the company issued 14,950,000 shares of its common stock at a
         price of $17.65 per share and received net proceeds of $253 million.
         Also on that date, the company issued 8,050,000 equity security units
         with a stated amount of $50 per unit and received net proceeds of $390
         million. Each security unit consists of a contract to purchase, for
         $50, a specified number of shares of Toys "R" Us common stock in August
         2005, and a senior note due 2007 with a principal amount of $50.
         Interest on the senior notes is payable quarterly at an initial rate of
         6.25%, commencing August 2002. The notes are expected to be remarketed
         in May 2005 at the then prevailing market interest rate for similar
         notes. The net proceeds from these public offerings were used to
         refinance short-term borrowings and for other general corporate
         purposes, prospectively. Accordingly, $510 million of short-term
         borrowings outstanding as of May 4, 2002 have been reclassified as
         long-term debt.


                                    9

<PAGE>


             MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                            AND FINANCIAL CONDITION
==============================================================================

Results of Operations
Comparison of first quarter ended May 4, 2002 to first quarter ended May 5, 2001

Our net sales increased 2% to $2.1 billion. On a consolidated basis, comparable
store sales, in local currencies, were flat. Comparable store sales for the Toys
"R" Us - USA division decreased 2%. We plan to complete the renovation of
approximately 250 additional stores to conclude the three-year plan to
reposition all of our U.S. toy stores by the 2002 holiday season. A total of 115
toy stores in the U.S. were under renovation to the Mission Possible format
during the first quarter of this year. Several factors contributed to the
comparable store sales decline in our U.S. toy stores. These factors included
the disruption caused by the Mission Possible construction, as well as a 15%
decrease in sales in our outdoor seasonal categories due to less than ideal
weather patterns. In addition, we experienced a 4% decrease in sales of the
video business driven by a pronounced slowdown in April as consumers anticipated
the video hardware price cuts announced in May by the major manufacturers of
video gaming systems. Internationally, our overall comparable toy store sales,
on a local currency basis, increased 10%. The increase was primarily attributed
to the implementation of various initiatives, including improvements in
merchandise content and presentation as well as guest service programs.
Our Babies "R" Us division had a 3% comparable store sales increase and total
sales increased 12%. We opened 5 new Babies "R" Us stores opened during the
quarter. Sales of furniture and bedding were particularly strong, posting a 23%
increase. Toysrus.com reported net sales of $46 million, up from $29 million.
Sales growth of Babiesrus.com was a primary driver of this increase.
Babiesrus.com began operating on the Amazon.com platform in the second quarter
of 2001.

Total gross margin, as a percentage of sales, improved 30 basis points to 32.6%
from 32.3%, despite a 60 basis point decrease in allowance income. Gross margin
for the Toys "R" Us - USA division increased 30 basis points to 31.3% from
31.0%. Gross margins in the Babies "R" Us division grew 70 basis points to 35.0%
from 34.3%. These increases were a result of continued expansion of exclusive
product offerings, strategic pricing, and favorable shifts in the merchandise
mix. Gross margin for the International division decreased 30 basis points to
32.6% from 32.9%. The decrease is attributable to a shift in merchandise mix to
lower margin products including video. The video business, which has lower
margins than other product categories, accounted for 20% of total international
sales as compared to 19%.

Total SG&A, as a percentage of sales, decreased 120 basis points to 27.7% from
28.9%, in part due to a decrease in distribution costs of 30 basis points and an
increase in cooperative advertising allowance income of 40 basis points. SG&A
for the Toys "R" Us - USA division decreased 120 basis points to 24.6% from
25.8%. The decrease was primarily due to payroll savings as a result of the
elimination of staff positions announced as part of the charges on January 28,
2002. SG&A for the Babies "R" Us division decreased 70 basis points to 21.6%
from 22.3%. The decrease was driven by a reduction in payroll at stores and
administrative offices of 60 basis points and lessening of transaction fees
incurred, for sales paid for with credit or debit cards, of 20 basis points.
SG&A for the International division increased 20 basis points to 33.6% from
33.4%. The increase was mainly due to higher net advertising costs.

Net interest expense decreased $2 million. This decrease is mainly attributable
to the favorable interest rate environment.

Foreign currency exchange did not have a material effect on the net loss for the
first quarter of 2002.

                                       10

<PAGE>
<TABLE>

Restructuring, Non-recurring and Other Charges
In the fourth quarter of 2001, we recorded restructuring and other charges
relating to our plans announced on January 28, 2002 to close 37 Kids "R" Us
stores and 27 non-Mission Possible format Toys "R" Us stores, eliminate
approximately 1,900 staff positions at stores and headquarters, and consolidate
our store support center facilities into our new headquarters in Wayne, New
Jersey. We also reversed $24 million of previously accrued charges ($11 million
from the 1998 program and $13 million from the 1995 program) that have been
deemed no longer needed. These restructuring and other charges totaled $213
million on a pre-tax basis.

Accordingly, based on all of these actions, we recorded $126 million, on an
after-tax basis, of restructuring and other charges in the fourth quarter of our
fiscal year ended February 2, 2002. Details on the components of our
restructuring and other charges announced January 28, 2002 are described in our
annual report for the year ended February 2, 2002. The subsequent utilization
and remaining reserve balances and are as follows:

                             Reserve Balance                    Reserve Balance
Description                    @ 02/02/02        Utilized        @ 05/04/02
<S>                              <C>               <C>               <C>
---------------------------- -------------- ------------------ -----------------
Store Closings:
    Lease commitments             $52             $ -                 $ 52
    Severance                       4               -                    4
    Markdowns                      27               1                   26
Store Support Center
    Consolidation:
    Lease commitments              28               -                   28
    Severance                      15               4                   11
-------------------- --------------------- --------------------  ---------------
Total remaining restructuring
   and other charges             $126             $ 5                   $ 121
<FN>
</FN>

In 2000, our Toysrus.com subsidiary recorded non-recurring costs and charges
totaling, before minority interest, approximately $118 million, $10 million of
which were included in cost of sales and $108 million of which were included in
selling, general and administrative expenses, primarily relating to the closure
of three distribution centers, the write-off of web site assets, as well as
other costs associated with migrating data and merchandise to the new co-branded
site with Amazon.com. Details on the components of these non-recurring costs and
charges are detailed below as well as the utilization and remaining reserve
balances:



                           Initial     Utilized    Reserve Balance   Utilized
Description                Charge       in 2000    @ 02/03/01        in 2001
-------------------------  --------   ----------   --------------- -------------
<CAPTION>
<S>                          <C>         <C>               <C>           <C>
Distribution Centers and
Web-site:
  Write-down of property
  and equipment             $ 75        $ 75              $ -          $ -
  Lease commitments           10           1                9            6
  Severance and other costs   23          21                2            2
Inventory Markdowns           10           6                4            4
--------------------------- --------  -----------  ---------------- ------------
Total non-recurring costs
 and charges               $ 118       $ 103             $ 15         $ 12
-------------------------- ---------  -----------  ---------------- ------------

<FN>
</FN>
                                Reserve Balance    Utilized   Reserve Balance
Description                      @ 02/02/02        in 2002      @ 05/04/02
-----------------------------  ----------------- ----------- -----------------
<CAPTION>
<S>                                   <C>             <C>            <C>
Distribution Centers and
Web-site:
    Write-down of property and
    equipment                          $ -         $ -               $ -
    Lease commitments                    3           -                 3
    Severance and other costs            -           -                 -
Inventory Markdowns                      -           -                 -
-----------------------------  ----------------- ----------- -----------------
Total non-recurring costs and
charges                                 $3         $ -               $ 3
-----------------------------  ----------------- ----------- -----------------

<FN>
</FN>
</TABLE>
                                       11

<PAGE>
<TABLE>

During 1998, we announced strategic initiatives to reposition our worldwide
business and other charges including the customer-focused reformatting of our
toy stores into the Mission Possible format, as well as the restructuring of our
International operations, which resulted in a charge of $353 million ($279
million net of tax benefits). Details on certain components of our strategic
initiatives and other charges are described in our annual report for the year
ended February 2, 2002. We recorded $59 million of other charges as part of this
restructuring consisting of $35 million related to provisions for legal
settlements; $18 million for charges related to the write-off of certain vendor
and other receivables; and $6 million of miscellaneous write-offs of other
assets that were determined to have no realizable value. The $59 million of
other charges had been fully utilized/reversed as of February 2, 2002. The
subsequent utilization and remaining reserve balances and are as follows:

                                   Reserve Balance              Reserve Balance
Description                           @ 02/02/02     Utilized     @ 05/04/02
-------------------------------------------------------------------------------
<S>                                        <C>          <C>           <C>
Closings/downsizings:
    Lease commitments                      $25         $ 3           $ 22
    Severance and
      other closing costs                    6           -              6
- -----------------------------------------------------------------------------
Total remaining restructuring charges      $31         $ 3           $ 28
<FN>
</FN>
</TABLE>

We believe that unused reserves remaining at May 4, 2002 are reasonable
estimates of what is required to complete all remaining initiatives.

Financial Condition
By February 1, 2003, we expect to be operating approximately 1,588 stores,
consisting of: 685 toy stores in the United States, all of which will be in the
Mission Possible format; 533 International toy stores (including 109 franchise
and joint venture stores); 146 Kids "R" Us stores; 188 Babies "R" Us stores and
36 Imaginarium stores. In addition, we sell merchandise through our Internet
sites at www.toysrus.com, www.babiesrus.com and www.imaginarium.com.

We have $975 million in unsecured committed revolving credit facilities from a
syndicate of financial institutions. These credit facilities consist of a $650
million facility expiring September 2006 and a $325 million facility expiring
September 2002. As of May 4, 2002, we had borrowed $117 million against these
credit facilities. The facilities are available for seasonal borrowings and to
support the company's domestic commercial paper borrowings. Cash requirements
for operations, capital expenditures and lease commitments will be met primarily
through operating activities, issuance of commercial paper, utilization of our
unsecured committed revolving credit facilities, additional medium-term
financing and the issuance of equity and equity linked securities described
below.

For 2002, capital requirements for our expansion plans mentioned above, as well
as other capital requirements are estimated to be approximately $475 million.

Our net cash outflows from operations were $322 million for the first quarter of
2002 compared with $437 million for the first quarter of 2001, primarily due to
the decrease in funds expended on accounts payables and other operating
liabilities.


                                       12

<PAGE>

Net borrowings increased $542 million for the quarter ended May 4, 2002, as
compared with an increase of net borrowings of $520 million for the quarter
ended May 5, 2001. This increase is primarily due to working capital needs and
the remodeling of the toy stores to the Mission Possible format. On May 28,
2002, Standard & Poor's revised our long-term debt rating to "BBB" and affirmed
our commercial paper rating of "A-2" with a stable outlook. Moody's currently
rates our long-term debt and commercial paper "Baa3/P-3". We continue to be
confident in our ability to refinance maturing debt, as well as to provide for
new capital.

We did not purchase any shares through our share repurchase program during the
first quarters of 2002 or 2001.

We are exposed to market risk from potential changes in interest rates and
foreign exchange rates. Our market risks at May 4, 2002 are similar to those
disclosed in our Form 10-K for the year ended February 2, 2002 and we continue
to regularly evaluate these risks and continue to take measures to mitigate
these risks, including, among other measures, entering into derivative financial
instruments to hedge a variety of risk exposures including interest rate and
currency risks.

On May 28, 2002, we completed our previously announced public offerings of Toys
"R" Us equity and equity-linked securities. On that date, we issued 14,950,000
shares of our common stock at a price of $17.65 per share and received net
proceeds of $253 million. Also on that date, we issued 8,050,000 equity security
units with a stated amount of $50 per unit and received net proceeds of $390
million. Each security unit consists of a contract to purchase, for $50, a
specified number of shares of Toys "R" Us common stock in August 2005, and a
senior note due 2007 with a principal amount of $50. Interest on the senior
notes is payable quarterly at an initial rate of 6.25%, commencing August 2002.
The notes are expected to be remarketed in May 2005 at the then prevailing
market interest rate for similar notes. The net proceeds from these public
offerings were used to refinance short-term borrowings and for other general
corporate purposes, prospectively.

Recent Accounting Pronouncements
In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets," which
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets and supersedes SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of". We adopted SFAS
No. 144 as of February 3, 2002 and the adoption did not have a significant
effect on our consolidated financial condition, results of operations and cash
flow.

In July 2001, the Financial Accounting Standards Board issued SFAS No. 142,
"Goodwill and Other Intangible Assets," which is effective for fiscal years
beginning after December 15, 2001. SFAS No. 142 changes the accounting for
goodwill from an amortization method to an impairment only approach. We have
adopted this pronouncement on February 3, 2002. As a result of this adoption,
$348 million of goodwill, which was to be amortized ratably through 2037,
ceased. Based on the historical and projected operating results of the reporting
units to which the goodwill relates, we have determined that no impairment of
this goodwill exists. Application of the non-amortization provisions of SFAS No.
142 resulted in a diminution of net loss of $2 million for the quarter ended May
4, 2002. Had the non-amortization provisions of SFAS No. 142 been applied for
the quarter ended May 5, 2001, we would have reported an adjusted net loss of
($16) million and a basic and diluted loss per share of ($0.08).



                                       13

<PAGE>

Forward-Looking Statements
This Form 10-Q contains "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, which are intended to be covered by
the safe harbors created thereby. We may also make forward-looking statements in
other documents filed with the Securities and Exchange Commission, our annual
report to shareholders, our proxy statement and in press releases. All
statements that are not historical facts, including statements about our beliefs
or expectations, are forward-looking statements. Such statements involve risks
and uncertainties that exist in our operations and business environment that
could render actual outcomes and results materially different than predicted.
Our forward-looking statements are based on assumptions about many factors,
including, but not limited to, ongoing competitive pressures in the retail
industry, changes in consumer spending, general economic conditions in the
United States and other jurisdictions in which we conduct business (such as
interest rates and consumer confidence) and normal business uncertainty. While
we believe that our assumptions are reasonable at the time forward-looking
statements were made, we caution that it is impossible to predict the actual
outcome of numerous factors and, therefore, readers should not place undue
reliance on such statements. Forward-looking statements speak only as of the
date they are made, and we undertake no obligation to update such statements in
light of new information or future events that involve inherent risks and
uncertainties. Actual results may differ materially from those contained in any
forward-looking statement.





                                       14

<PAGE>

                           PART II - OTHER INFORMATION


Item 2.           Changes in Securities and Use of Proceeds

                  In an amendment dated as of June 3, 2002, Toys "R" Us, Inc.
                  (the "company") amended the Rights Agreement, dated as of
                  April 16, 1999 (the "Rights Agreement"), by and between the
                  company and American Stock Transfer & Trust Company, as Rights
                  Agent to provide that the "Final Expiration Date" (as defined
                  in the Rights Agreement) will be the close of business on the
                  date of the 2006 annual meeting of the stockholders of the
                  company. A copy of this amendment is attached as an Exhibit to
                  this Form 10-Q.

Item 3.           Quantitative and Qualitative Disclosure of Market Risk

                  The information called for by this item is provided under the
                  caption "Financial Condition" under PART I - FINANCIAL
                  INFORMATION, Item 2 - Management's Discussion and Analysis of
                  Results of Operations and Financial Condition.

Item 5.           Exhibits and Reports on Form 8-K

                  (a)      Exhibits:

                      1. Amendment to Rights Agreement,  dated as of
                         June 3, 2002, to the Rights Agreement,  dated as
                         of April 16, 1999, between Toys "R" Us, Inc.
                         and American Stock Transfer & Trust Company,
                         as Rights Agent.

                  (b)      Report on Form 8-K:

                           None.














                                       15

<PAGE>


                                   SIGNATURES



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










         Date:  June 17, 2002         Toys "R" Us, Inc.
                                      --------------------------------------
                                      (Registrant)






                                      /s/ Louis Lipschitz
                                      -----------------------------------------
                                      (Signature)
                                      Louis Lipschitz
                                      Executive Vice President and
                                      Chief Financial Officer
















                                       16

<PAGE>


                AMENDMENT TO RIGHTS AGREEMENT, dated as of June 3, 2002,
(this "Amendment"), to the Rights Agreement, dated as of April 16, 1999
(the "Rights Agreement"), by and between Toys "R" Us, Inc. (the "Company")
and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent"). Terms used herein but not defined shall have the meaning
assigned to them in the Rights Agreement.

                  WHEREAS, the Company and the Rights Agent have heretofore
executed and entered into the Rights Agreement; and

                  WHEREAS, pursuant to Section 17 of the Rights Agreement,
the Company may from time to time supplement or amend the Rights Agreement in
accordance with the provisions of such Section 17; and

                  WHEREAS, the Board of Directors of the Company has determined
that it is in the best interest of the Company and its stockholders to amend
the Rights Agreement to provide that the "Final Expiration Date" (as defined
herein) will be the close of business on the date of the 2006 annual meeting of
the stockholders of the Company.

                  NOW, THEREFORE, the Company and the Rights Agent hereby amend
the Rights Agreement as follows:

                  1.       Section 1(l) of the Rights Agreement is hereby
amended by deleting the existing definition of "Expiration Date" and inserted
the following new definition:

                       (l) "Expiration Date' shall mean the earliest of (i) the
         close of business on the date of the 2006 annual meeting of the
         stockholders of the Company (the "Final Expiration Date"),
         (ii) the time at which the Rights are redeemed as provided in
         Section 23 hereof or (iii) the time at which the Rights are
         exchanged pursuant to Section 24 hereof.

                  2.       Exhibit A to the Rights Agreement, being the form of
Rights Certificate, is hereby modified and amended by (a) deleting the date
"January 22, 2008" in each place it appears therein and (b) substituting for
such date the following phrase:  "the close of business on the date of the
2006 annual meeting of stockholders of the Company".

                  3.       This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts made and performed entirely within such State.

                  4.       Except as specifically amended by this Agreement,
all other terms and conditions of the Rights Agreement shall remain in full
force and effect and are hereby ratified and confirmed.

<PAGE>


                  IN WITNESS WHEREOF, this Amendment has been duly executed by
the Company and the Rights Agent as of the day and year first written above.

                                           TOYS "R" US, INC.

                                           By:/s/ Christopher K. Kay
                                           --------------------------
                                           Name:  Christopher K. Kay
                                           Title:  Executive Vice President -
                                                 Operations and General Counsel

Attest:

/s/ David J. Schwartz
------------------------
Name:  David J. Schwartz
Title:  Assistant Secretary


                                       AMERICAN STOCK TRANSFER & TRUST COMPANY

                                          By: /s/ Herbert J. Lemmer
                                          -------------------------
                                          Name: Herbert J. Lemmer
                                          Title: Vice President

Attest:

/s/ Joseph Alicia
--------------------
Name: Joseph Alicia
Title:  Vice President