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 May 2, 1998

                                       OR

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


                         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 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 [ ]

275,793,811 shares of the registrant's Common Stock were outstanding on May 26,
1998.


<PAGE>


                                      INDEX


                                                                            PAGE
PART I - FINANCIAL INFORMATION

      Item 1. Financial Statements

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

              Condensed Consolidated Statements of Earnings....................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.....................................................6

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

SIGNATURES....................................................................10


                                        1


<PAGE>

<TABLE>

                        TOYS "R" US, INC AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                   (Unaudited)
                                  (In millions)

<CAPTION>


                                               May 2,   May 3,   January 31,
                                                1998     1997       1998
<S>                                              <C>       <C>        <C>  

ASSETS 
Current Assets:
  Cash and cash equivalents                     $  438    $  277     $  214
  Accounts and other receivables                   178       169        175
  Merchandise inventories                        2,656     2,552      2,464
  Prepaid expenses and other current assets         60        60         51

     Total current assets                        3,338     3,058      2,904

Property and equipment, net and other assets     4,741     4,478      4,703
Goodwill, net                                      354       363        356

                                                $8,433    $7,899     $7,963


LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Short-term borrowings                         $  824   $   606     $  134
  Accounts payable                               1,446     1,377      1,280
  Accrued expenses and other current liabilities   443       398        680
  Income taxes payable                             161       118        231

     Total current liabilities                   2,874     2,499      2,325


Long-term debt                                     867       906        851
Deferred income taxes                              223       227        219
Other liabilities                                  122       175        140
Stockholders' equity                             4,347     4,092      4,428


                                               $ 8,433   $ 7,899    $ 7,963

<FN>

See notes to condensed consolidated financial statements.

</FN>
</TABLE>

                                        2



<PAGE>
<TABLE>


                       TOYS "R" US, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

                                   (Unaudited)

                       (In millions except per share data)

<CAPTION>

                                                       13 Weeks Ended
                                                  May 2,                 May 3,
                                                   1998                   1997
<S>                                                  <C>                    <C>

Net sales                                      $  2,043               $  1,924 

Costs and expenses:
      Cost of sales                               1,417                  1,326
      Selling, advertising, general &               518                    480
      administrative
      Depreciation and amortization                  61                     56
      Interest expense - net                         17                     16

                                                  2,013                  1,878

Earnings before taxes on income                      30                     46
Taxes on income                                      11                     17
Net earnings                                    $    19                $    29

Basic earnings per share                        $   .07                $   .10
Weighted average basic shares outstanding         280.2                  286.9

Diluted earnings per share                      $   .07                $   .10
Weighted average diluted shares outstanding       282.3                  288.8


<FN>

See notes to condensed consolidated financial statements.

</FN>
</TABLE>

                                        3

<PAGE>
<TABLE>


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


<CAPTION>

                                                             13 Weeks Ended
                                                        May 2,            May 3,
                                                         1998              1997
<S>                                                    <C>               <C>   


Cash flows from operating activities:
Net earnings                                           $   19            $   29
Adjustments to reconcile net earnings to net
cash  used in operating activities:
   Depreciation and amortization                           62                56
   Deferred income taxes                                    4                 4
   Changes in operating assets and liabilities:
       Merchandise inventories                           (192)             (337)
       Accounts payable and other operating 
       liabilities                                       (161)             (216)
       Other operating assets                             (11)              (52)
   Net cash used in operating activities                 (279)             (516)

Cash flows used in investing activities:
Capital expenditures, net                                 (80)              (64)

Cash flow from financing activities:
Short-term borrowing, net                                 691               303
Long-term borrowings                                       31                 9
Long-term debt repayment                                  (10)             (120)
Exercise of stock options                                  14                 5
Share repurchase program                                 (150)              (88)
   Net cash provided by financing activities              576               109

Effect of exchange rate changes on cash and 
cash equivalents                                            7               (13)
Cash and cash equivalents:
Increase/(decrease) during period                         224              (484)
Beginning of period                                       214               761 
End of period                                          $  438            $  277

Supplemental disclosures of cash flow information:
Income taxes paid                                      $   73            $   68

Interest paid                                          $   23            $   25

<FN>


See notes to condensed consolidated financial statements.


</FN>
</TABLE>

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<PAGE>

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

1.       Interim Reporting

         The  interim  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.

2.       Comprehensive Income

         As of February 1, 1998,  the Company  adopted  SFAS No. 130,  Reporting
         Comprehensive  Income.  SFAS No.  130  establishes  new  rules  for the
         reporting  and  display of  comprehensive  income  and its  components;
         however,  the adoption of this Statement had no impact on the Company's
         net income or stockholders'  equity.  SFAS No. 130 requires  unrealized
         gains  or  losses  on  the  Company's   foreign  currency   translation
         adjustments,  which prior to adoption  were only reported as a separate
         component  of  stockholders'  equity,  to also  be  included  in  other
         comprehensive   income.  Prior  year  financial  statements  have  been
         reclassified to conform to the requirements of SFAS No. 130.

         Comprehensive  income (loss)  amounted to $48 million and ($16) for the
         first  quarter  ended May 2, 1998 and May 3, 1997,  respectively,  as a
         result of the change in foreign currency translation adjustments.

3.       Other Matters

         See Part II - Item I - Legal Proceedings.








                                        5


<PAGE>


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

Results of Operations

Total sales  increased  6% to $2.0  billion for the first  quarter  ended May 2,
1998,  as compared  with $1.9 billion for the first  quarter  ended May 3, 1997.
Excluding the impact of foreign currency,  total sales increased 7% in the first
quarter of 1998,  as compared  with the first  quarter of 1997.  The increase in
total sales is attributable  to the Company's  continued store expansion and the
increase in comparable store sales during this period.

Comparable USA toy store sales increased by 2% for the first quarter of 1998, as
compared  with the first quarter of 1997.  The increase was primarily  driven by
strong sales of video software  merchandise  and diecast cars.  Internationally,
the Company  experienced a low single digit  comparable toy store sales decrease
in local  currency  for the first  quarter of 1998,  as compared  with the first
quarter of 1997. The comparable sales decreases were due primarily to the impact
of price deflation relating to video game systems as well as the cycling against
the release of Nintendo 64 in most of Europe a year ago.  The  Company's  Babies
"R" Us division had a comparable  store sales  increase in the mid-teens for the
quarter,  driven by an increase in customer counts as well as an increase in our
average sale per customer.  The Company's Kids "R" Us division experienced a mid
single digit  comparable  store sales increase due in part to very strong Easter
sales this year.

Cost of sales, as a percentage of sales, increased by approximately 0.4% for the
first quarter of 1998, as compared with the first quarter of 1997.  The increase
was in part due to  higher  sales of lower  margin  video  software  merchandise
throughout  the world as well as a decrease in the sales of higher margin action
figures.

Selling,  advertising,  general and  administrative  expenses as a percentage of
sales increased by approximately  .4% for the first quarter of 1998, as compared
with  the  first  quarter  of  1997,  primarily  as a  result  of our  strategic
investments for the future,  including consulting fees, as well as the impact of
our sales performance versus the prior year.

Depreciation and  amortization  increased by $5 million for the first quarter of
1998,  as compared  with the first  quarter of 1997 as a result of the Company's
continued store expansion and growth.

Net interest expense increased by approximately $1 million for the first quarter
of 1998,  as  compared  with the first  quarter of 1997 due to the  increase  in
short-term borrowings discussed below.

Foreign currency exchange did not have a material effect on net earnings for the
first quarter ended May 2, 1998.



                                        6


<PAGE>

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                             AND FINANCIAL CONDITION
                                   (continued)

Financial Condition

In 1998,  the  Company  plans to open  approximately  5 toy stores in the United
States. The Company's  expansion plans also include opening  approximately 15 to
20 new Babies "R" Us stores in the United States.  Internationally,  the Company
will open approximately 35 new toy stores including 15 franchise stores.

Short-term borrowings, net of investments increased by approximately $57 million
at May 2, 1998 as compared  with May 3, 1997 due  primarily to cash used for the
Company's  share  repurchase   program  and  increased   capital   expenditures.
Accordingly,  the current  ratio has  declined  to 1.16 to 1 at May 2, 1998,  as
compared with 1.22 to 1 at May 3, 1997.

The Company repurchased 5.3 million shares of its common stock through its share
repurchase  programs  for $150  million  during the first  quarter of 1998.  The
Company  completed its original $1 billion share  repurchase  program,  that was
announced in January 1994, by  repurchasing a total of 31.5 million shares since
its  inception.  The Company began its new $1 billion share  repurchase  program
announced in January  1998,  by  repurchasing  3.4 million  shares of its common
stock for $97 million during the first quarter.

On June 1, 1998, the Company called and retired $63 million of its 8.25% sinking
fund debentures.  These  borrowings will be replaced with short-term  borrowings
carrying lower interest rates.  The charge related to this early  extinguishment
is  approximately  $4 million on a pre-tax basis,  which will be recorded in the
second quarter.

Annual capital  expenditures for new and existing facilities are estimated to be
approximately   $450  million.   Cash   requirements  for  operations,   capital
expenditures,  lease  commitments,  the early debt  extinguishment and the share
repurchase   program  will  be  met  primarily  through  operating   activities,
borrowings  under  the  $1  billion  revolving  credit  facility,   issuance  of
short-term commercial paper and bank borrowings by foreign subsidiaries.


Weighted average diluted common equivalent shares decreased to 282.3 million for
the period ended May 2, 1998 from 288.8 million at May 3, 1997, due primarily to
the Company  repurchasing shares under the Company's $1 billion share repurchase
programs.






                                        7



<PAGE>


                           PART II - OTHER INFORMATION

Item 1.           Legal Proceedings

                  1) On May 22, 1996, the Staff of the Federal Trade  Commission
                  (the  "FTC")  filed an  administrative  complaint  against the
                  Company alleging that the Company is in violation of Section 5
                  of the Federal Trade Commission Act for its practices relating
                  to warehouse  clubs.  The  complaint  alleges that the Company
                  reached   understandings  with  various  suppliers  that  such
                  suppliers  not sell to the clubs the same items that they sell
                  to the Company.  The  complaint  also alleges that the Company
                  "facilitated understandings" among the manufacturers that such
                  manufacturers  not sell to clubs. The complaint seeks an order
                  that the  Company  cease and desist  from this  practice.  The
                  matter  was tried  before an  administrative  law judge in the
                  period from March  through May of 1997. On September 30, 1997,
                  the   administrative  law  judge  filed  an  Initial  Decision
                  upholding the FTC's complaint against the Company.

                  The  Company  has  appealed   the  Initial   Decision  to  the
                  Commissioners  of the FTC.  That appeal was argued on February
                  19,  1998.  The  Company  will be  entitled to have the United
                  States  Court of Appeals  review any  adverse  decision by the
                  FTC.

                  Since the  commencement of the FTC  proceeding,  several class
                  action  suits have been filed  against  the Company in various
                  federal courts and in State courts in Alabama,  California and
                  New Jersey  alleging  that the  Company has  violated  certain
                  federal and state  competition  laws as a  consequence  of the
                  behavior  alleged  in the  FTC  complaint.  In  addition,  the
                  attorneys  general  of  forty-four  states,  the  District  of
                  Columbia and Puerto Rico have filed a suit against the Company
                  in their capacity as representatives of the consumers of their
                  states,  alleging  that the Company has  violated  federal and
                  state antitrust laws as a consequence of the behavior  alleged
                  in the FTC complaint.  These suits seek damages in unspecified
                  amounts and other relief  under state and/or  federal law. The
                  federal  class action and  attorneys  general  suits have been
                  consolidated  for  pre-trial  purposes  in the  United  States
                  District Court for the Eastern District of New York.

                  The Company  believes  that both its policy and its conduct in
                  connection  with the foregoing are within the law and plans to
                  contest  these actions  vigorously.  The Company also believes
                  that these actions will not have a material  adverse effect on
                  its financial condition, results of operations or cash flows.






                                        8

<PAGE>


Item 6.           Exhibits and Reports on Form 8-K


                  (a) Exhibit 27.1 - Financial Data Schedule for the quarter 
                  ended May 2, 1998.

                  (b) Exhibit  27.2 - Financial  Data  Schedule  for the quarter
                  ended May 3, 1997 Restated.





































                                        9


<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 16, 1998                     Toys "R" Us, Inc.
                                                    -----------------
                                                    (Registrant)





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















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