SECURITIES AND EXCHANGE COMMISSION
                                        Washington, D.C. 20549

                                             FORM 10-Q

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

                      For the quarterly period ended October 31, 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 [ ]

         251,024,719    shares   of   the    registrant's    Common   Stock  
         were outstanding on November 24, 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............................................................7

PART II - OTHER INFORMATION

          Item 1. Legal Proceedings ..........................................11

          Item 5. Other Information ..........................................11

          Item 6. Exhibits and Reports on Form 8-K  ..........................12

SIGNATURES....................................................................13





                                                   1
<PAGE>
<TABLE>

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

                             (Unaudited)
                            (In millions)
<CAPTION>
                                     October 31,     November 1,     January 31,                       
                                           1998            1997           1998                 
<S>                                         <C>             <C>             <C>    
ASSETS
                                                                            

Current Assets:
 Cash and cash equivalents               $   250          $ 283            $ 214
 Accounts and other receivables              167            174              175
 Merchandise inventories                   3,256          3,923            2,464
 Prepaid expenses and other current assets    79             74               51

              Total current assets         3,752          4,454            2,904

Property and equipment,net and other assets4,789          4,677            4,703
Goodwill, net                                349            358              356
             

                                         $ 8,890        $ 9,489          $ 7,963

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Short-term borrowings                  $ 1,723       $  1,261           $  134
  Accounts payable                         2,027          2,290            1,280
  Accrued expenses and 
  other current liabilities                  469            488              680
  Income taxes payable                        98             54              231
       
     Total current liabilities             4,317          4,093            2,325

Long-term debt                               817            901              851
Deferred income taxes                        168            235              219
Other liabilities                            247            129              140
Stockholders' equity                       3,341          4,131            4,428
                                                                                
                                                                            
                                        $  8,890       $  9,489         $  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)

                                          13 Weeks Ended          39 Weeks Ended
                                         
                                      October 31,    November 1,    October 31,    November 1,
                                           1998           1997            1998           1997
<S>                                         <C>            <C>            <C>             <C>

Net sales                               $  2,171       $  2,142         $  6,234     $   6,055
Costs and expenses: 
Cost of sales                              1,831          1,456            4,638         4,136
Selling, advertising, general &
administrative                               600            533            1,638         1,514
Restructuring charge                         294              -              294             -
Depreciation and amortization                 65             59              187           171
Interest expense - net                        28             22               72            58

                                           2,818          2,070            6,829         5,879
                                                     


Loss)/earnings before income taxes          (647)            72             (595)          176
Income tax (benefit)/expense                (172)            26             (153)           64
Net (loss)/earnings                     $   (475)       $    46         $   (442)     $   (112)          

Basic (loss)/earnings per share         $   (1.85)      $   .16         $   (1.64)    $    .39
Weighted average basic shares outstanding  257.4         284.9             270.2        285.8

Diluted (loss)/earnings per share       $    (1.85)     $   .16         $  (1.64)     $   .39
Weighted average diluted shares outstanding 257.4        288.9            270.2        288.7
<FN>


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


                                                             3

<PAGE>
<TABLE>

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

                        (Unaudited)
                        (In millions)
<CAPTION>
                                                      39 Weeks Ended
                                                 October 31,    November 1,
                                                       1998           1997
<S>                                                      <C>           <C>   
            
Cash flows from operating activities:
Net (loss)/earnings                               $    (442)       $    112
Adjustments  to  reconcile  net  earnings
to net  cash  used in operating activities:
 Restructuring and other charges                        546               -
 Depreciation and amortization                          187             171
 Deferred income taxes                                  (51)             13
 Changes in operating assets and liabilities:
  Merchandise inventories                            (1,143)         (1,709)
  Accounts payable and other operating liabilities      510             677
  Other operating assets                                (87)            (67)
 Net cash used in operating activities                 (480)           (803)
                                                                                               
Cash flows used in investing activities:
Capital expenditures, net                              (308)           (388)

Cash flow from financing activities:
Short-term borrowings, net                            1,590             958
Long-term borrowings                                     31              10
Long-term debt repayments                               (78)           (136)
Exercise of stock options                                16              58
Share repurchase program                               (705)           (212)
  Net cash provided by financing activities             854             678

Effect of exchange rate changes on cash and
cash equivalents                                        (30)             35
  Cash and cash equivalents:
  Increase/(decrease) during period                      36             (478)
  Beginning of period                                   214              761
  End of period                                     $   250          $   283
  Supplemental disclosures of cash flow information:
  Income tax payments                               $   111          $   154
  Interest payments                                 $    85          $    79 

<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)
                                             (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 changes in
         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 (loss) income amounted to $(456) million and $116 million
         for the third  quarter  ended  October 31,  1998 and  November 1, 1997,
         respectively.  For the 39 weeks ended  October 31, 1998 and November 1,
         1997  comprehensive  (loss) income  amounted to $(411)  million and $94
         million,  respectively,  as a result of the change in foreign  currency
         translation adjustments.

3.       Derivative Instruments and Hedging Activities

         In June 1998, the Financial Accounting Standards Board issued Statement
         No. 133, Accounting for Derivative  Instruments and Hedging Activities,
         which the Company is  required  to adopt in its fiscal  year  beginning
         February 2000.  Management does not anticipate that the adoption of the
         new  Statement  will  have a  significant  effect  on  earnings  or the
         financial position of the Company.






                                                            5





<PAGE>

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



4.       Restructuring and Other Charges

         On  September   16,  1998,   the  Company   announced   strategic
         initiatives  to reposition  its worldwide  business,  as well as other
         charges  resulting in a total charge of $333 million ($265 million net
         of tax benefits, or $1.03 and $.98 per share for the third quarter and
         the first nine months of 1998,  respectively).  The Company determined
         that the strategic initiatives required a restructuring charge of $294
         million to close  and/or  downsize  stores,  distribution  centers and
         administrative  functions. This worldwide plan includes the closing of
         50  toy  stores  in  the  International  division,   predominately  in
         continental  Europe,  and 9 in the United  States that do not meet the
         Company's return  objectives.  The Company will also close 31 Kids "R"
         Us stores,  convert 26 nearby US toy  stores and  downsize  its 2 Kids
         World stores into  combination  stores in the new C-3 format discussed
         below. Combination stores include toys and an apparel selling space of
         approximately  5,000 square feet.  Other charges consist  primarily of
         changes in  accounting  estimates of $39 million  recorded in selling,
         general and administrative  expenses.  Of the total  restructuring and
         other charges, $149 million relates to operations in the United States
         and $184 million relates to International operations.  Unused reserves
         of $171 million are estimated to be utilized in the fourth  quarter of
         1998 and  throughout  1999,  with the  exception  of  long-term  lease
         commitments, which will be utilized throughout 1999 and thereafter. 

5.       Inventory Markdowns and Other Charges

         On  September  16,  1998,  the Company  announced  markdowns  and other
         charges  to cost of  sales of $345  million  ($229  million  net of tax
         benefits,  or $.89 and $.85 per share for the third  quarter  and first
         nine months of 1998,  respectively).  The  Company  has  designed a new
         store  format   called  C-3  which   stands  for   Customer   friendly,
         Cost-effective and Concept for the future. The Company plans to convert
         approximately  200 US toy stores to the new C-3 format in 1999. Of this
         charge,  $253 million was related to markdowns required to clear excess
         inventory  from its stores so the Company can proceed  with its new C-3
         store format on an accelerated  basis.  Another component of the charge
         was inventory  markdowns of $29 million  related to the closing  and/or
         downsizing of stores  discussed in footnote 4, above.  The Company also
         recorded  charges to cost of sales of $63 million  related to inventory
         system refinements and changes in accounting estimates. Unused reserves
         of $221 million are  estimated to be utilized in the fourth  quarter of
         1998 and  throughout  1999. Of these  charges,  $288 million  relate to
         operations in the United States and $57 million relate to International
         operations.

6.       Other Matters

         See Part II - Item I - Legal Proceedings.
                                                             6

<PAGE>

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

Results of Operations
Total sales were $2.2 billion for the third  quarter  ended October 31, 1998, as
compared  with $2.1 billion for the third  quarter  ended  November 1, 1997,  an
increase of 1.4%. For the first nine months of 1998,  sales increased 3% to $6.2
billion  as  compared  with  $6.1  billion  for the first  nine  months of 1997.
Excluding the impact of foreign currency,  total sales increased 2% in the third
quarter  and 4% for the first nine  months of 1998,  as  compared  with the same
periods in the prior year.  The increase in total sales is  attributable  to the
Company's continued store expansion.

Comparable USA toy store sales  decreased by 5% for the third quarter and 2% for
the first nine months of 1998,  as compared  with the same periods in 1997.  The
decrease  was  primarily  due to lower sales of video  hardware,  including  the
impact of price  deflation,  as well as lower sales of virtual  pets,  plush and
action  figures,  all of which had strong sales in the same periods in the prior
year.  Internationally,  the Company experienced a same store sales decrease due
to last year's strong sales in video  hardware sold at much higher price points,
lower sales of virtual pets, as well as the downturn in the Japanese economy.

Cost of sales as a percentage of sales increased by 16.3% and 6.1% for the third
quarter and first nine months of 1998,  respectively,  as compared with the same
periods in 1997. Cost of sales was negatively impacted by clearance markdowns of
$253 million,  markdowns  related to strategic  initiatives of $29 million,  and
inventory system refinements and changes in accounting  estimates of $63 million
discussed  below.  Before  the  impact  of  these  charges,  cost of  sales as a
percentage of sales increased by .4% and .6% for the third quarter and the first
nine months of 1998,  respectively,  as compared  with the same periods in 1997.
This  increase was due to a change in the sales mix  consisting of a decrease in
the sales of both higher margin action  figures  related to the strength of Star
Wars a year ago and higher margin virtual pets, as well as higher sales of lower
margin video software merchandise.

Selling, advertising, general and administrative expenses (SG&A) as a percentage
of sales  increased by 2.7% and 1.3% for the third quarter and first nine months
of 1998,  respectively,  as compared  with the same  periods in 1997.  1998 SG&A
includes $39 million of changes in accounting  estimates discussed below. Before
the impact of the changes in estimates,  the increase in SG&A as a percentage of
sales was .9% and .6% for the third  quarter  and the first nine months of 1998,
respectively,  as compared with the same periods in 1997.  This increase was due
primarily to new stores that opened in the latter half of 1997.

Depreciation  and  amortization  increased by $6 million and $16 million for the
third quarter and the first nine months of 1998, respectively,  as compared with
the same periods in 1997 as a result of the Company's  continued store expansion
and growth.

As a result of extensive  consumer  research  and renewed  customer  focus,  the
Company is bringing  together a number of successfully  tested concepts into its
new C-3 store format,  which stands for Customer  friendly,  Cost-effective  and
Concept for the future.  The Company  combined what was learned from the Concept
2000 remodels with a strong focus on improving the merchandise  offerings at the
stores,  and has included more feature shops in the new C-3 stores.  The Company
believes that the result will be a customer  friendly  store that will emphasize
the Company's strong selection, improve the customer's shopping

                                                             7
<PAGE>

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

experience and enable the Company to better demonstrate price value. The Company
plans to convert approximately 200 US toy stores to the new C-3 format in 1999.

On September 16, 1998, the Company  announced  strategic  initiatives  and other
charges to reposition  its  worldwide  business  including the  customer-focused
reformatting  of its toy stores  into the new C-3 format and  restructuring  its
International  operations  which  resulted  in a charge  of $333  million  ($265
million  net  of  tax  benefits).   The  strategic  initiatives  resulted  in  a
restructuring charge of $294 million. The other charges of $39 million primarily
consist  of changes  in  accounting  estimates.  The  Company is closing  and/or
downsizing  underperforming  stores and consolidating  distribution  centers and
administrative  offices.  Details on the components of the charges are described
in the Notes to the Condensed Consolidated Financial Statements. Unused reserves
of $171 million are  estimated to be utilized in the fourth  quarter of 1998 and
throughout 1999, with the exception of long-term lease  commitments,  which will
be utilized throughout 1999 and thereafter.

The Company also announced markdowns and other charges of $345 million ($229 net
of tax benefits). Of this charge, $253 million was related to markdowns required
to clear excess inventory from stores. These markdowns should enable the Company
to achieve its optimal inventory  assortment,  improve controls,  and streamline
systems so that it can proceed with the C-3 conversions on an accelerated basis.
The Company's  objective with its new C-3 concept is to provide customers with a
better  shopping  experience  leading to  increased  sales and higher  inventory
turns. In addition, the Company recorded $29 million in markdowns related to the
store closings  discussed  above.  The Company also recorded  charges to cost of
sales of $63 million  related to  inventory  system  refinements  and changes in
accounting  estimates.  Unused  reserves  of $221  million are  estimated  to be
utilized  in the fourth  quarter  of 1998 and  throughout  1999.  Details of the
markdowns  and  other  charges  are  described  in the  Notes  to the  Condensed
Consolidated Financial Statements.

The  implementation  of the strategic  initiatives,  markdowns and other charges
described  above are expected to have a significant  positive effect on Economic
Value Added or "EVA".  EVA is the  management  system  adopted by the Company to
determine whether its business  initiatives and investments  provide an adequate
return to its  stockholders.  The  strategic  initiatives,  markdowns  and other
charges are also expected to improve the  Company's  free cash flow and increase
operating earnings by more than $75 million in 1999, and even more thereafter.

Net interest  expense  increased by approximately $6 million and $14 million for
the third quarter and the first nine months of 1998,  respectively,  as compared
with the same  periods  in 1997.  This  was due to the  increase  in  short-term
borrowings  discussed  below and the $4 million  charge in the second quarter of
1998 relating to the early extinguishment of debt.

Foreign currency exchange did not have a material effect on net earnings for the
third quarter or the first nine months of 1998.

Financial Condition
The  Company  opened 5 new toy  stores  and 13 new  Babies  "R" Us stores in the
United  States this year.  The Company  plans to open an additional 2 new Babies
"R" Us stores in the United States by the end of 1998. The Company closed 3 Kids
"R" Us stores in the United States this year.  Internationally,  the Company has
opened 27 new toy stores this year and plans on opening one additional franchise
toy store

                                                             8
<PAGE>

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

by the end of 1998.  The Company has closed 3 stores in the International
division.

Short-term  borrowings,  net of  investments  increased  by  approximately  $495
million at October 31, 1998 as compared  with  November 1, 1997 due primarily to
cash  used  for  the   Company's   share   repurchase   program  and  the  early
extinguishment of $67 million principal amount of its of 8 1/4% debentures.  The
current  ratio has  declined to .87 to 1 at October 31, 1998,  as compared  with
1.09 to 1 at November 1, 1997.  This decline is due to the  Company's  strategic
repositioning  program as well as the increase in short-term  borrowings.  As of
October 31, 1998, the Company has reduced consolidated  inventory levels by $667
million as compared with the end of the third quarter last year.  This reduction
is  due to the  markdowns  discussed  in  Note 5 of the  Condensed  Consolidated
Financial  Statements  as well as the  Company's  effort to reduce  consolidated
store for store inventory  levels.  The reductions have had a positive impact on
the  Company's  free cash flow, in turn enabling the Company to pursue
the stock buy back program.

The Company  repurchased  over 31 million shares of its common stock through its
share  repurchase  programs  for a total of $705  million  during the first nine
months of 1998. The Company  completed its $1 billion share repurchase  program,
announced in January 1994, and has $348 million  remaining in its new $1 billion
share repurchase program announced in January 1998.

Annual capital  expenditures for new and existing facilities are estimated to be
approximately  $450 million in 1998. Cash  requirements for operations,  capital
expenditures,  lease commitments,  and the share repurchase program are expected
to 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 257.4 million for
the quarter  ended  October 31, 1998,  compared  with 288.9 million for the same
period in 1997.  For the nine month  period  ended  October 31,  1998,  weighted
average diluted common  equivalent  shares  decreased to 270.2 million  compared
with 288.7  million for the same period in 1997.  The decrease was due primarily
to the Company repurchasing shares under the share repurchase programs.

Year 2000

The Company has been  evaluating and addressing Year 2000 issues since the first
quarter of 1997.  Year 2000 issues are those related to the inability of certain
computer  software  programs to properly  recognize  and process  date-sensitive
information  relative  to the year  2000 and  beyond.  The  Company's  Year 2000
project includes four major elements: 1) information technology (IT) systems, 2)
non - IT systems, 3) relationships with key business partners and 4) contingency
planning.  Approximately 95% of the required coding conversions on IT and non-IT
systems are expected to be completed by the end of this fiscal year. The Company
plans to complete all known remaining coding conversions by the end of the first
quarter of 1999. The Company is utilizing  both internal and external  resources
to implement the conversion of our systems for Year 2000 compliance.

The total  estimated cost to achieve Year 2000 compliance is  approximately  $25
million,  which is being expensed as incurred.  These estimates exclude internal
labor and related costs. Approximately $13
                                                             9

<PAGE>

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

Year 2000 (continued)

million of these costs have been incurred  through the end of the third quarter.
All of these costs are being  funded  through  cash flows from  operations.  The
Company has identified significant business partners and is working closely with
them to understand their Year 2000 compliance  status.  The Company  anticipates
minimal  business  interruption  to occur as a result of Year 2000 issues within
its control.  However,  possible  consequences  include, but are not limited to,
loss of  communication  links  with store  locations,  loss of  electric  power,
delayed product  deliveries from major  suppliers,  and the inability to process
transactions or engage in similar normal business activities.  In addition,  not
all  customer  situations  can be  anticipated.  The Company may  experience  an
increase  of  sales  returns  of  products   containing   hardware  or  software
components.  Such returns, if they occur, are likely to be the responsibility of
the manufacturers and are not expected to be material to the Company's financial
condition or results of operations.  The Company believes the readiness of third
parties  is the most  significant  area of risk to the  Company  related to Year
2000.  However,  the Company also believes that ongoing  communication  with and
assessment  of readiness of these third  parties will  minimize  this risk.  The
Company has begun  preliminary  review but has not yet  finalized a  contingency
plan for  possible  Year 2000  issues.  Contingency  plans are expected to be in
place by the end of the second quarter of 1999.

The total  cost of the Year 2000  project  is not  expected  to have a  material
effect on the Company's financial condition or results of operations.  The costs
of conversion and the  completion  dates for the project are  management's  best
estimates. 

The  above  Management's   Discussion  and  Analysis  contains  forward  looking
statements  that involve  inherent risks and  uncertainties.  Actual results may
differ materially from those contained in any forward looking statement.  Please
see Item 5 of this report which addresses forward looking statements made by the
Company.
                                          10

<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 appealed the Initial Decision to the Commissioners
                  of the FTC. The Commission upheld the Initial  Decision in an 
                  Opinion and Order issued October 14, 1998. The Company is 
                  entitled to have the United States Court of Appeals review the
                  FTC's  decision, and plans to do so.

                  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. 
                  The Company also believes that these actions will not have a 
                  material  adverse effect on its financial condition, results 
                  of operations or cash flows.

 Item 5.          Other Information
        
                  Cautionary Statement Regarding Forward Looking Information

                  All of the  statements  made on this  Form  10-Q,  other  than
                  historical  facts,  are  forward  looking  statements  made in
                  reliance  on  the  safe  harbor   provisions  of  the  Private
                  Securities  Litigation  Reform  Act of  1995.  As  such,  they
                  involve  risks  and  uncertainties  that  could  cause  actual
                  results to differ materially. The Company's forward looking

                                                              11
<PAGE>
                           
                                PART II - OTHER INFORMATION
                                      (continued)


 Item 5.          Other Information 
                  (continued)

                  statements are based on assumptions about many important
                  factors, including ongoing competitive  pressures  in the
                  retail  industry,  changes  in consumer spending,  
                  general United States economic  conditions (such as higher 
                  interest rates and consumer  confidence), and normal
                  business  uncertainty.  While the Company  believes that its
                  assumptions  are  reasonable,  it cautions that it is
                  impossible  to predict  the impact of  certain  factors  which
                  could cause actual results to differ  materially from expected
                  results.  Forward looking statements speak only as of the date
                  they are made, and the Company undertakes no obligation to 
                  update such statements in light of new information or future 
                  events.

 Stockholder Proposals

                    Sec. 2.1(b) of the Company's  By-Laws provides for the 
                    Company to provide notice of an upcoming  Annual Meeting of
                    Stockholders  at least 100 days in advance of such meeting.
                    Notice is hereby given that the Company's  1999 Annual 
                    Meeting of Stockholders is expected to be held on June 9, 
                    1999. Pursuant to Sec. 2.1(b) of the  By-Laws,  stockholder
                    nominations  of persons for election to the Board of 
                    Directors of the  Company  must be  received  by the  
                    Company at its principal executive office, 461 From Road,
                    Paramus, New Jersey 07652, Attention: Secretary no later
                    than March 11,  1999 in order to be  considered  timely.  

                    In  addition, written notice of stockholder  proposals 
                    (other than nominations of persons for election to the Board
                    of  Directors and other than  proposals  submitted to the 
                    Company as stockholder  proposals  in  accordance  with Rule
                    14a-8 promulgated pursuant to the Securities  Exchange Act 
                    of 1934, as amended) for  consideration at the 1999 Annual 
                    Meeting must be received by the Company,  at the address set
                    forth in the  preceding  paragraph,  no later than March 10,
                    1999 in order to be considered  timely.  The  persons  
                    designated  as  proxies  by  the  Company  in connection 
                    with the 1999 Annual Meeting will have discretionary voting 
                    authority with  respect to any  stockholder  proposal of 
                    which the Company did not receive timely notice.

Item 6.           Exhibits and Reports on Form 8-K


                  (a)      Exhibit 27.1 - Financial Data Schedule for the
                           quarter ended October 31, 1998.

                  (b)      Exhibit 27.2 - Financial Data Schedule for the 
                           quarter ended  November 1, 1997 - Restated.

                  (c)      On September 17, 1998, the Company filed a Form 8-K 
                           in connection with the repositioning of its worldwide
                           business.

                  (d)      On October 16, 1998, the Company filed a Form 8-K 
                           in connection with the initial decision upheld by the
                           Federal Trade Commission.

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<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:    December 15, 1998                           Toys "R" Us, Inc.
                                                              -----------------
                                                                    (Registrant)





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





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