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 3, 1997

                                       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 [ ]

285,273,977 shares of the registrant's  Common Stock were outstanding on
May 27, 1997.



<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 3,        May 4,    February 1,
                                                                  1997          1996         1997  
 <S>                                                               <C>           <C>           <C> 
                                                           
 ASSETS                                                                                      
 Current Assets:                                                                        
                                                                                             
     Cash and cash equivalents ....................          $    277.3    $    378.0    $    760.9
                                                                                        
     Accounts and other receivables ...............               169.1         150.2         142.1
                                                                                        
     Merchandise inventories ......................             2,551.5       2,343.8       2,214.6
                                                                                        
     Prepaid expenses and other current assets ....                59.7         110.6          42.0
                                                                                        
          Total current assets ....................             3,057.6       2,982.6       3,159.6
                                                                                        
Property and equipment, net and other assets ......             4,478.6       4,214.3       4,498.6
                                                                                        
Goodwill, net .....................................               362.7        --             365.0
                                                                                        
                                                             $  7,898.9    $  7,196.9    $  8,023.2
                                                                                        
LIABILITIES AND STOCKHOLDER'S EQUITY                                                    
                                                                                        
Current Liabilities:                                                                    
                                                                                        
     Short-term borrowings ........................          $    606.2    $    985.1    $    303.5
                                                                                        
     Accounts payable .............................             1,376.7       1,278.1       1,346.5
                                                                                        
     Accrued expenses and other current liabilities               398.7         336.9         720.0
                                                                                        
     Income taxes payable .........................               117.5          83.2         170.7
                                                                                              
          Total current liabilities                                                     
                                                                2,499.1       2,683.3       2,540.7
                                                                                        
Long-term debt ....................................               906.3         717.2         908.5
                                                                                        
Deferred income taxes .............................               227.1         237.0         222.5
                                                                                        
Other liabilities .................................               174.5         131.4         160.9
                                                                                        
Stockholders' equity ..............................             4,091.9       3,428.0       4,190.6
                                                                                         
                                                             $  7,898.9    $  7,196.9    $  8,023.2
                                                                                        
                                                                                     
<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 3,       May 4,
                                                         1997         1996
<S>                                                    <C>           <C>      
                                                  
Net sales ..............................           $   1,924.1   $   1,645.5   
                                                  
Costs and expense                                 
                                                  
     Cost of sales                                     1,326.3       1,124.4                                                      
     Selling, advertising, general &                 
      administrative ...................                 479.1         422.6
     Depreciation and amortization .....                  56.2          49.0
     Interest expense - net ............                  16.2          19.8
                                                  
                                                       1,877.8       1,615.8
                                                  
Earnings before taxes on income ........                  46.3          29.7
Taxes on income ........................                  16.9          11.0
Net earnings                                              29.4          18.7
                                                  
                                                  
Earnings per share .....................               $   .10           .07
                                                                              
                                                  
Weighted average number of common                 
     and common equivalent shares ......                 288.8         275.5
                                                  
                                                  
                                                  
                                            
<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 3,      May 4, 
                                                                        1997        1996
<S>                                                                     <C>         <C>    

Cash flows from operating activities:
Net earnings ...............................................         $   29.4  $   18.7 
Adjustments to reconcile net earnings to net cash                   
   used in operating activities:                                    
     Depreciation and amortization .........................             56.2      49.0  
     Deferred income taxes .................................              4.6       5.0
     Changes in operating assets and liabilities:                   
       Accounts and other receivable .......................            (27.0)    (21.9)
       Merchandise inventories .............................           (336.9)   (349.7)
       Prepaid expenses and other operating assets .........            (25.4)    (27.1)
       Accounts payable and other operating liabilities ....           (216.1)    (86.5)
   Net cash used in operating activities ...................           (515.2)   (412.5)
                                                                    
Cash flows used in investing activities:                            
Capital expenditures, net ..................................            (64.1)    (58.5)
                                                                    
Cash flow from financing activities:                                
Short-term borrowing, net ..................................            302.7     647.0
Long-term borrowings .......................................              8.7    --
Exercise of stock options ..................................              5.2       5.9
Long-term debt repayment ...................................           (119.6)     (3.3)
Share repurchase program ...................................            (88.1)   --
     Net cash provided by financing activities .............            108.9     649.6
                                                                    
Effect of exchange rate changes on cash and cash equivalents            (13.2)     (3.3)
                                                                    
Cash and cash equivalents:                                          
(Decrease)/increase during period ..........................           (483.6)    175.3
Beginning of period ........................................            760.9     202.7
End of period ..............................................         $  277.3  $  378.0
                                                                    
Supplemental disclosures of cash flow information:                  
                                                                    
Income taxes paid ..........................................         $   68.2  $   58.1
                                                                    
Interest paid ..............................................         $   25.2  $   23.0
                                                              
<FN>

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


                                        4

<PAGE>

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

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.       Earnings Per Share

         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement No. 128, Earnings per Share,  which is required to be adopted
         on January 31, 1998, the last day of the Company's fiscal year. At that
         time, the Company will be required to change the method  currently used
         to compute earnings per share and restate all prior periods.  Under the
         new  requirements  for  calculating  primary  earnings  per share,  the
         dilutive  effect of stock options will be excluded.  There is no impact
         in primary  earnings per share for the first quarters ended May 3, 1997
         and May 4, 1996. The impact of Statement No. 128 on the  calculation of
         fully diluted earnings per share for these quarters is not material.

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  17% to $1.9 billion for the first  quarter  ended May 3,
1997,  as compared  with $1.6 billion for the first  quarter  ended May 4, 1996.
Excluding the impact of foreign  currency,  total sales increased  almost 20% in
the first  quarter of 1997,  as  compared  with the first  quarter of 1996.  The
increase in total sales is  attributable  to the  increase in  comparable  store
sales during this period and the Company's continued store expansion,  including
the acquisition of Baby Superstore on February 3, 1997.

Comparable USA toy store sales increased by 8% for the first quarter of 1997, as
compared  with the first quarter of 1996.  The increase was primarily  driven by
strong  sales of video  product  as well as action  figures,  plush and  outdoor
playsets. Internationally,  the Company experienced a comparable toy store sales
increase of approximately 4% in local currency for the first quarter of 1997, as
compared with the first quarter of 1996, including double digit comparable store
sales  increases  in both  Canada and the United  Kingdom.  The sales  increases
internationally were primarily driven by the introduction of Nintendo 64 in most
of  Europe  as  well as  innovative  marketing  and  advertising  programs.  The
Company's Kids "R" Us and Babies "R" Us divisions  experienced  comparable store
sales  decreases  primarily due to a weak demand for children's  apparel and the
expected impact during the transition of the Baby Superstore locations to Babies
"R" Us.

Cost of sales, as a percentage of sales,  increased by approximately .6% for the
first quarter of 1997, as compared with the first quarter of 1996.  The increase
was due  primarily  to the  negative  impact  on the  sales  mix  caused  by the
increased sales of video hardware merchandise, somewhat offset by lower sales of
consumables.

Selling, advertising, general and administrative expenses as a percentage of 
sales decreased by approximately .8% for the first quarter of 1997, as compared
with the first quarter of 1996,  primarily  as a result of expense  control  and
sales leveraging. 

Depreciation and amortization increased by $7.2 million for the first quarter of
1997, as compared with the first  quarter of 1996 as a result of the Company's 
continued store expansion and growth and $2.3 million of goodwill amortization 
related to the acquisition of Baby Superstore.

Net  interest  expense  decreased  by  approximately  $3.6 million for the first
quarter of 1997,  as  compared  with the first  quarter of 1996 due in part to 
the closing of a medium-term $325 million financing in the second half of 1996
which replaced  borrowings  carrying  higher interest  rates,  as well as
improved  cash flow as a result of the  comparable store sales growth and the
benefits of the worldwide restructuring program.

Foreign currency exchange did not have a material effect on net earnings for the
first quarter ended May 3, 1997.


                                        6

<PAGE>

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

Financial Condition
-------------------

In 1997,  the Company  plans to open  approximately  20 toy stores in the United
States,  all  utilizing  the  "Concept  2000" store  design and plans to remodel
approximately  56 toy  stores  in the  United  States  to this new  format.  The
Company's  expansion plans also include opening  approximately 5 new Kids "R" Us
stores and  approximately  20 new  Babies  "R" Us stores in the  United  States.
Internationally, the Company will open approximately 40 new toy stores including
15 franchise stores.

Short-term  borrowings,  net of  investments  decreased  by  approximately  $278
million at May 3, 1997 as  compared  with the May 4, 1996 due  primarily  to the
refinancing  of  short-term  debt  with a medium-term $325  million  financing.
Accordingly,  the current  ratio has  improved  to 1.22 to 1 at May 3, 1997,  as
compared with 1.11 to 1 at May 4, 1996.

Long term debt  repayments of $119.6 million in the first quarter of 1997 were
due primarily to the retirement of convertible debt assumed with the acquisition
of Baby Superstore.

The Company  repurchased  3.1 million shares of its common stock through its
share repurchase program for $88.1 million during the first quarter of 1997. The
Company  repurchased 24.4 million shares of its common stock for $782 million
since the $1 billion share repurchase program was announced in January 1994.

Annual capital  expenditures for new and existing facilities are estimated to be
approximately   $630  million.   Cash   requirements  for  operations,   capital
expenditures,  lease  commitments 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.

The Company's  restructuring program action plan is substantially  complete. The
franchising of the  Company's  stores  in the  Netherlands  is  pending  certain
regulatory approvals.

Weighted average common  equivalent  shares increased to 288.8 million at May 3,
1997 from 275.5  million at May 4, 1996,  due  primarily to 13 million  treasury
shares  of  Company  common  stock  issued  in  connection  with  the  Company's
acquisition of Baby Superstore on February 3, 1997.

                                        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. Hearings
                  on this complaint commenced on March 5, 1997.

                  Since the filing of the FTC  complaint,  several  class action
                  suits have been filed  against the Company,  alleging that the
                  Company  has  violated  certain  state  competition  laws as a
                  consequence  of the  behavior  alleged  in the FTC  complaint.
                  These class action suits seek damages in  unspecified  amounts
                  and other relief under state law.

                  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 or results of operations.

           2)     On July 12, 1996, an arbitrator  rendered an award in favor
                  of  Yusuf  Ahmed  Alghanim  & Sons,  W.L.L.  ("Alghanim")  and
                  against the Company and awarded  Alghanim  $46.4  million plus
                  interest  from  December  1994.  This  award was  rendered  in
                  connection  with a dispute  between  Alghanim  and the Company
                  involving rights under a 1982 license  agreement for toy store
                  operations  in the Middle East.  Accordingly,  the Company has
                  recorded a provision of $59.5 million during 1996 representing
                  all expected costs in connection with this matter. The Company
                  believes that the findings of the arbitrator are not supported
                  by the evidence presented in the case and has contested this 
                  award in the United States District Court. That motion was 
                  denied on December 13, 1996,  and the  arbitration  award was 
                  confirmed. The Company has filed an appeal with the United  
                  States  Court of Appeals for the Second Circuit.



                                        8

<PAGE>


Item 6.       Exhibits and Reports on Form 8-K

                (a) Exhibit 10P - Material Contracts -                    
                  
                      -Retention Agreement between Toys "R" Us, Inc. and Roger 
                        Gaston dated as of May 1, 1997.

                      -Retention Agreement between Toys "R" Us, Inc. and Louis 
                        Lipschitz dated as of May 1, 1997. 

                      -Retention Agreement between Toys "R" Us, Inc. and Michael
                        J. Madden dated as of May 1, 1997.
                    
                      -Retention Agreement between Toys "R" Us, Inc.and Richard 
                        L. Markee dated as of May 1, 1997.

                      -Retention Agreement between Toys "R" Us, Inc. and Gregory
                        R. Staley dated as of May 1, 1997.

                      -Retention Agreement between Toys "R" Us, Inc. and Robert
                        J. Weinberg dated as of May 1, 1997.

                    Exhibit 27 - Financial Data Schedule.

                (b) On  February  3,  1997,  the  Company  filed a Form 8-K in
                    connection with the completion of the Company's acquisition
                    of Baby Superstore, Inc.


                                       9

<PAGE>


                                   SIGNATURES
                                   ----------


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





  Date:    June 17, 1997                           Toys "R" Us, Inc.
                                                   -----------------
                                                   (Registrant)





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












                                       10