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



                     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 October 30, 1999




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

                        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 []

      239,947,544 shares of the registrant's Common Stock were outstanding on
      November 26, 1999.



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


<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..................................................14


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





                                          1


<PAGE>
<TABLE>



                         TOYS "R" US, INC. AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                      (Unaudited)
                      ==========================================
                                     (In millions)
<CAPTION>
<S>
ASSETS                                   October 30,  October 31,   January 30,
                                            1999           1998            1999
                                       ----------      -----------    ---------
                                          <C>               <C>             <C>
Current Assets:
 Cash and cash equivalents              $  297         $  250            $  410
 Accounts and other receivables            170            167               204
 Merchandise inventories                 3,101          3,256             1,902
 Prepaid expenses and
 other current assets                      132             79                81
                                      -----------    ------------    ----------
  Total current assets                   3,700          3,752             2,597

Property and equipment, net
and other assets                         5,147          4,789             4,955

Goodwill, net                              377            349               347
                                     ============    =============  ===========
                                      $  9,224       $  8,890           $ 7,899
                                     ============    =============  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities:
 Short-term borrowings               $  1,130        $  1,723          $    156
 Accounts payable                       2,132           2,027             1,415
 Accrued expenses and
 other current liabilities                586             469               696
 Income taxes payable                     121              98               224
                                   ------------   -------------     -----------
  Total current liabilities             3,969           4,317             2,491


Commitments and contingencies - Note 7

Long-term debt                          1,240             817             1,222
Deferred income taxes                     334             168               333
Other liabilities                         204             247               229
Stockholders' equity                    3,477           3,341             3,624
                                   ============   =============     ===========
                                     $  9,224        $  8,890          $  7,899

                                   ============   =============     ===========
<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            39 Weeks Ended
                                  ---------------------     -------------------
                               October 30,  October 31, October 30, October 31,
                                   1999        1998           1999         1998
                               ----------  -----------  ----------   ----------
<S>                                 <C>         <C>          <C>            <C>

Net sales                        $  2,465      $  2,171   $  6,835     $  6,234
                               ----------    ----------   ----------  ---------

Costs and expenses:
 Cost of sales                      1,704         1,831      4,731        4,638
 Selling, general and
 administrative expenses              641           600      1,767        1,638
 Restructuring charge                  -            294         -           294
 Depreciation and amortization         71            65        203          187
 Interest expense - net                25            28         64           72
                                ----------    ----------   ----------  --------
                                    2,441         2,818      6,765        6,829
                                ----------    ----------   ----------  --------



Earnings (loss) before
taxes on income                       24          (647)         70        (595)
Income tax expense (benefit)           9          (172)         26        (153)
                                ----------    ----------   ----------  --------
Net earnings (loss)               $   15       $  (475)     $   44     $  (442)
                               ==========    ==========    ==========  ========

Basic earnings (loss) per share    $ .06      $  (1.85)      $ .18    $  (1.64)
                               ==========    ==========   ==========  =========
Weighted average
basic shares outstanding          243.3         257.4       246.5       270.2
                               ==========   ==========   ==========  ==========

Diluted earnings (loss) per share  $ .06       $ (1.85)   $   .18     $  (1.64)
                               ==========    ==========  ==========  ==========
Weighted average
diluted shares outstanding        243.4          257.4     247.2        270.2
                               ==========    ==========  ==========  ==========

<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>
                                                           39 Weeks Ended
                                                     --------------------------
                                                      October 30,   October 31,
                                                           1999          1998
                                                     -------------  -----------
<S>                                                        <C>           <C>

Cash flows from operating activities:
Net earnings (loss)                                      $  44         $  (442)
Adjustments to reconcile net earnings
(loss) to net cash used in operatingactivities:
  Restructuring and other charges                           -              546
  Depreciation and amortization                            203             187
  Deferred income taxes                                     -              (51)
  Changes in operating assets and liabilities:
    Merchandise inventories                             (1,186)         (1,143)
    Accounts payable and other operating liabilities       473             510
    Other operating assets                                 (51)            (87)
                                                       ----------    ----------
      Net cash used in operating activities               (517)           (480)
                                                       ----------    ----------
Cash flows from investing activities:
Capital expenditures, net                                 (364)           (308)
Purchase of Imaginarium, net of cash acquired              (43)              -
                                                      -----------    ----------
     Net cash used in investing activities                (407)           (308)
                                                      -----------    ----------
Cash flows from financing activities:
Short-term borrowings, net                                 989           1,590
Long-term borrowings                                         -              31
Long-term debt repayment                                    (8)            (78)
Exercise of stock options                                   17              16
Share repurchase program                                  (179)           (705)
                                                     ------------   -----------
      Net cash provided by financing activities            819             854

Effect of exchange rate changes
on cash and cash equivalents                                (8)            (30)

Cash and cash equivalents:
(Decrease)/increase during period                         (113)             36
Beginning of period                                        410             214
                                                     ===========    ===========
End of period                                           $  297          $  250
                                                     ===========    ===========

Supplemental disclosures of cash flow information:
Income tax payments                                     $  123          $   111
                                                    ============    ===========

Interest paid                                           $   71          $    85
                                                    ============    ===========
<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 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 January 30,
         1999.


2.       Commercial paper
         Commercial paper of $368 is classified as long-term debt at October 30,
         1999 and January 30, 1999. The company  maintains  long-term  committed
         credit  agreements to support these borrowings and intends to refinance
         them  on  a  long-term  basis  through   commercial  paper  borrowings.
         Additionally,  commercial  paper of $800 and  $1,270  are  included  in
         short-term  borrowings  at  October  30,  1999 and  October  31,  1998,
         respectively.


3.       Comprehensive income
         Comprehensive loss amounted to $1 and $456 for the thirteen weeks ended
         October 30, 1999 and October  31,  1998,  respectively,  as a result of
         foreign currency translation adjustments.  Comprehensive  income/(loss)
         amounted to $22 and ($411) for the 39 weeks ended  October 30, 1999 and
         October  31,  1998,  respectively,  as a  result  of  foreign  currency
         translation adjustments.


4.       Segments
         The company's reportable segments are Toys "R" Us - USA and Toys `R" Us
         -  International.  Divisions that do not meet  quantitative  reportable
         thresholds are included in the category  classified as Other,  which is
         comprised  of the  Kids  "R" Us and  Babies  "R" Us  divisions  and the
         toysrus.com subsidiary. Information related to segments is as follows:








                                                                   5

<PAGE>
<TABLE>

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




-------------------------------------------------------------------------------
<CAPTION>

                                            13 Weeks Ended       39 weeks Ended
                                           ------------------------------------
                                         October   October   October    October
                                        30, 1999   31,1998   30,1999    31,1998
<S>                                       <C>        <C>       <C>        <C>

-----------------------------------   ----------  --------- ---------- --------
Net sales:
 Toys "R" Us - USA                      $ 1,310    $ 1,143    $ 3,730   $ 3,496
 Toys "R" Us - International                652        571      1,753     1,553
 Other                                      503        457      1,352     1,185
-----------------------------------   ----------  ----------  ---------  ------
Total                                   $ 2,465    $ 2,171    $ 6,835   $ 6,234
-----------------------------------   ----------   --------- ---------  -------
Operating earnings/(loss):
 Toys "R" Us - USA                      $    26    $    34    $   112   $  144
 Toys "R" Us - International                 12         (9)        (8)     (37)
 Other                                       22         38         51       57
 General corporate expenses                 (11)        (4)       (21)      (9)
 Interest expense, net                      (25)       (28)       (64)     (72)
 Restructuring and other charges             -        (678)         -     (678)
------------------------------------   ---------   ---------     -------  ------
Earnings (loss) before taxes on
 Income                                 $    24    $  (647)   $    70   $ (595)
------------------------------------   ---------- ----------    -------- ------

<FN>
</FN>
</TABLE>


      5.       Acquisition
               On August 20, 1999, the company acquired all of the capital stock
               of Imaginarium Toy Centers, Inc., a leading educational specialty
               retailer with 41 stores in 13 states,  for  approximately  $45 in
               cash and the assumption of certain  liabilities.  The acquisition
               is accounted for using the purchase  method of accounting and the
               results of Imaginarium  operations  have been combined with those
               of  the  company  from  the  date  of  acquisition.  Goodwill  of
               approximately  $40 resulting from the purchase is being amortized
               over 10 years.

      6.       Restructuring and other charges
               On September 16, 1998, the company recorded charges of $678 ($508
               net of tax benefits) to  strategically  reposition  its worldwide
               business.  See the  company's  Annual  Report  for the year ended
               January  30,  1999 for  details  on these  charges.  Also see the
               section  "Management's  Discussion  and  Analysis  of  Results of
               Operations and Financial  Condition" in this report for an update
               on the initiatives and the status of related reserves.

     7.       Commitments  and  contingencies
              See Part II-Item I-Legal Proceedings.


                                        6



<PAGE>





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

Results of Operations
Net sales  were  $2.5  billion  and $6.8  billion,  respectively,  for the third
quarter and nine months ended October 30, 1999, an increase of $294 million,  or
14% from the quarter ended October 31, 1998,  and $601 million,  or 10% from the
nine months ended October 31, 1998. The sales increases were primarily driven by
increases in comparable  store sales versus the same periods in 1998, as well as
continued new store growth.  The 1999 net sales increases were achieved  despite
closing  31  under-performing  stores  this year (see  "Restructuring  and Other
Charges" below).

Foreign  currency  exchange had a favorable impact on net sales of approximately
$35 million and $66 million, respectively, for the third quarter and nine months
ended October 30, 1999, as compared with the same periods in 1998.

On a consolidated basis, comparable store sales, in local currencies,  increased
by 8% for the third  quarter of 1999,  and 5% for the nine months ended  October
30, 1999, as compared with the same periods in 1998.  Comparable store sales for
the Toys "R" Us - USA division  increased  by 13% for the third  quarter of 1999
and 6% for the first nine months of 1999,  as compared  with the same periods in
1998. These sales gains were driven primarily by stronger  merchandising  trends
offset by the impact of toy stores undergoing C-3 renovations.  Internationally,
comparable  toy store sales,  on a local  currency  basis,  increased 5% for the
third  quarter of 1999,  and 4% for the nine months ended  October 30, 1999,  as
compared with the same periods in 1998. Strong  International sales performances
were achieved in most merchandise  categories.  In particular,  the juvenile and
toy category was very strong, as well as electronics, excluding video games. The
company's  Babies "R" Us division had  comparable  store sales  increases in the
mid-single  digits for the third  quarter of 1999,  and 10% for the nine  months
ended  October  30,1999.  These  increases  were driven by strong  sales in most
categories,  in  particular,  in the infant  care and  apparel  categories.  The
company's Kids "R" Us division  experienced a decrease in comparable store sales
in the mid to  low-single  digits for the third  quarter of 1999, as well as the
nine months ended  October 30, 1999,  as compared with the same periods in 1998.
Kids "R" Us sales were  adversely  impacted by slow moving fall products such as
heavy outerwear, sweaters and fleece sets and less than anticipated sales during
the back to school period.

On  September  16,  1998,   the  company   recorded   restructuring   and  other
non-recurring  charges of $678 million to  reposition  its  worldwide  business.
Accordingly,  cost of sales and  selling,  general and  administrative  expenses
("SG&A") for the three and nine months ended October 31, 1998 include charges of
$345 million and $39 million,  respectively,  with the remaining charges of $294
million reported as a restructuring charge. Refer to the company's Annual Report
for the year ended January 30, 1999 for details on these charges.



                                         7
<PAGE>


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

On a consolidated basis,  excluding these restructuring and other charges,  cost
of sales,  as a percentage of sales,  increased by 0.7% for the third quarter of
1999,  and 0.3% for the nine months  ended  October 30, 1999,  respectively,  as
compared  with the same periods in 1998.  Cost of sales as a percentage of sales
for the Toys "R" Us - USA division  increased  by 1.6% for the third  quarter of
1999,  as compared  with the same  period in 1998,  resulting  primarily  from a
change in sales mix, as well as  increased  markdowns to keep  inventory  fresh.
Cost of  sales as a  percentage  of  sales  for the Toys "R" Us -  International
division  decreased by 0.6% for the third  quarter of 1999, as compared with the
same period in 1998, resulting primarily from a favorable shift in the sales mix
to higher  margin  categories.  The  company's  other  divisions  experienced  a
combined  decrease in cost of sales,  as a percentage of sales,  of 0.5% for the
third  quarter of 1999,  as  compared  with the same  periods in 1998,  due to a
favorable  change in the sales mix for the  Babies  "R" Us  division,  partially
offset by increased markdown expense in the Kids "R" Us division this year.

On a consolidated basis,  excluding  restructuring and other charges, SG&A, as a
percentage  of sales,  increased by 0.2% for the third  quarter of 1999 and 0.3%
for the first nine months of 1999,  as compared  with the same  periods in 1998.
SG&A for 1999 includes costs to operate the company's toysrus.com subsidiary, as
well as  severance  costs for the  company's  former  Chief  Executive  Officer.
Excluding  these  costs,  SG&A  decreased  0.8% and 0.2% for the  three and nine
months ended October 30, 1999,  as compared  with the same periods in 1998,  due
primarily to sales  leveraging.  SG&A, as a percentage of sales for the Toys "R"
Us - USA division  increased  by 0.6% for the third  quarter of 1999 as compared
with 1998. This increase was partially due to increased  distribution  costs, as
well as increased  store payroll costs from the C-3 remodeling  and  "front-end"
conversion  programs.  SG&A for the International  division,  as a percentage of
sales,  decreased  1.3% for the third  quarter of 1999,  as compared  with 1998.
During the same period,  the company's  other  divisions  reported a combined 1%
increase in SG&A, as a percentage of sales.

Included  in the  company's  results are net losses before  income  taxes of $17
million and $22  million,  respectively,  for the third  quarter and nine months
ended  October 30, 1999,  related to  establishing  and  operating  its internet
subsidiary, toysrus.com.

Depreciation  and  amortization   increased  by  $6  million  and  $16  million,
respectively,  for the third  quarter  and the  first  nine  months of 1999,  as
compared with the same periods in 1998,  as a result of the company's  continued
store  expansion and strategic  investments  to improve  management  information
systems.

Net interest expense  decreased by $3 million for the third quarter of 1999 from
$28  million for the third  quarter of 1998.  For the first nine months of 1999,
interest expense was $4 million less than 1998,  excluding a 1998 second quarter
charge of $4 million related to early  extinguishment  of debt.  These decreases
were primarily due to lower average borrowings.


                                          8


<PAGE>

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

Foreign  currency  exchange  did not have a material  impact on net earnings for
either the third  quarter or nine months ended October 30, 1999 as compared with
the same periods in 1998.

Restructuring and Other Charges
During 1998,  the company  announced  strategic  initiatives  to reposition  its
worldwide   business  and  other   charges,   including   the   customer-focused
reformatting  of its  toy  stores  into  the  new  C-3  format,  as  well as the
restructuring  of its  international  operations,  which resulted in a charge of
$353 million ($279 million net of tax benefits, or $1.05 per share).  Details on
the  components of the  company's  strategic  initiatives  and other charges are
described in the  company's  Annual  Report for the year ended January 30, 1999;
the reserve balances as at that date and subsequent utilization are as follows:

<TABLE>

<CAPTION>

                                    Reserve Balance             Reserve Balance
Description                           @ 1/30/99       Utilized      @ 10/30/99
-------------------------------------------------------------------------------
<S>                                     <C>             <C>             <C>

Closings/Downsizings:
  Lease commitments                    $81              $11            $70
  Severance and other closing costs     25                9             16
  Other                                 24                -             24
-------------------------------------------------------------------------------
Total Restructuring                   $130              $20           $110

-------------------------------------------------------------------------------
Changes in accounting estimates and
  Provisions for legal settlements     $39               $6            $33
-------------------------------------------------------------------------------
<FN>
</FN>
</TABLE>


The company  has closed  two Toys "R" Us toy stores and ten Kids "R" Us stores
in the United States, as well as 24 Toys "R" Us toy stores internationally since
recording the charges.  In addition,  the company has closed four distribution
centers and seven area offices in the United States since recording the charges.
Unused reserves are expected to be utilized in the company's upcoming business
cycle, with the exception of those related to long-term lease commitments.

In 1998, the company also announced  markdowns and other charges of $345 million
($229 million net of tax  benefits).  Details on the components of these charges
are  described in the  company's  Annual  Report for the year ended  January 30,
1999;  the reserve  balances as at that date and subsequent  utilization  are as
follows:

<TABLE>
<CAPTION>
                                  Reserve Balance               Reserve Balance
Description                          @ 1/30/99      Utilized      @ 10/30/99
-------------------------------------------------------------------------------
<S>                                     <C>           <C>              <C>

Markdowns:
 Clear excess inventory                $ 74           $ 73                $1
 Store closings                          27             14                13
Other                                     6              -                 6
-------------------------------------------------------------------------------
Total Cost of Sales                    $107           $ 87              $ 20
-------------------------------------------------------------------------------

Unused reserves are expected to be utilized in the company's upcoming business
cycle.
<FN>
</FN>
</TABLE>


                                                     9


<PAGE>


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

Impact of Year 2000
Year 2000 issues are those related to the inability of certain  computer systems
to properly  recognize and process  date-sensitive  information  relative to the
year 2000 and beyond.  The  company's  Year 2000  project,  which began in 1997,
includes four major elements,  which are outlined in the company's Annual Report
for the year ended January 30, 1999.

The company  completed an assessment of year 2000  requirements  for the systems
supported by its Information Technology Department which included contacting its
software suppliers.  The impacted systems,  including those that are part of the
company's  data  processing  infrastructure,  are now year 2000  compliant  as a
result of  modification  or  replacement.  The  company  completed  remediation,
testing and rollout of all of its mainstream business systems in 1999.

The company  has  communicated  with  suppliers,  equipment  vendors and service
providers to determine  the extent to which it is  vulnerable  to the failure of
these  parties  to  remedy  any year 2000  issues.  Most of these  parties  have
indicated  that they  intend to be year  2000  compliant  by  January  1,  2000.
Regardless, the company has developed contingency plans for its major suppliers,
where feasible, to mitigate year 2000 risk.

The total  estimated cost to achieve year 2000 compliance is  approximately  $25
million,  which excludes  internal labor and related  costs.  Approximately  $22
million of these  costs have been  incurred as of October 30, 1999 and all costs
are being funded through cash flows from operations. The company has established
contingency  plans for possible  year 2000 issues and will  continue  monitoring
these plans.

The  company  has successfully completed its year 2000 compliance initiatives.
However, no assurance can be given that this issue,  as it  relates  to the
company's  internal  systems  or  those of other companies  on which it relies,
will not have a material  adverse  impact on the company's operations.

Financial Condition
By January 29,  2000,  the company  will  operate  approximately  1,546  stores,
consisting of: 707 toy stores in the United States; 458 International toy stores
(including 90 franchise and joint  venture  stores);  205 Kids "R" Us children's
clothing stores; 131 Babies "R" Us stores and 45 Imaginarium stores. The company
also  sells  merchandise  through  its  Internet  sites at  www.toysrus.com  and
www.imaginarium.com and through mail order catalogs.

The company  continues to implement its C-3 Total  Solutions  Strategy  aimed at
developing  greater everyday  customer value in terms of price,  service and the
total  shopping  experience.  The C-3 store  format,  which  stands for Customer
friendly, Cost-effective and Concept for the future, includes wider


                                       10


<PAGE>


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

aisles,  more feature  opportunities  and end-caps,  shops and logical  category
adjacencies - all designed to improve customer shopping patterns and experience.
The sales floor has been expanded by 20% with a one-third  reduction in the size
of the back room. The company has completed its 1999 C-3 remodeling  program and
now has 170 stores  operating in the C-3 format.  In  addition,  the company now
operates an additional 230 "front-end"  retrofit stores. These retrofits include
high potential C-3 merchandising modules such as R-Zone (expanded  electronics),
Celebration  Station  (party  headquarters),  an  enlarged  seasonal  shop  plus
improved  customer  checkout  and traffic  flow.  The  company  plans to convert
additional existing stores to the C-3 format in 2000.

On August 26, 1999, Robert C. Nakasone resigned as the company's Chief Executive
Officer and as a director. Also on that date Michael Goldstein,  Chairman of the
Board of Directors,  was named Chief Executive  Officer on an interim basis. Mr.
Goldstein  was Chief  Executive  Officer of the company  from 1994 to 1998.  The
company has begun the process of seeking a permanent Chief Executive Officer and
has identified  several  candidates.  In connection  with the resignation of Mr.
Nakasone as Chief  Executive  Officer and director,  the company  entered into a
Separation and Release Agreement with Mr. Nakasone  providing for cash payments,
the immediate  vesting of all unvested options and unvested profit shares held
by Mr. Nakasone,  as well as the prorated  vesting of other unvested equity
based awards on the second  anniversary of the termination date. The company
accrued a total of $8 million as of October 30, 1999 to cover all costs
related to this agreement.

On August 20, 1999, the company acquired all of the capital stock of Imaginarium
Toy Centers,  Inc. for  approximately  $45 million in cash and the assumption of
certain  liabilities.  The company believes this acquisition will accelerate its
strategy to  establish a leadership  position in the  learning  and  educational
category.  In  addition,  the company  also  believes  Imaginarium  will provide
opportunities  for new growth.  The company is currently  operating the existing
Imaginarium  stores  under  the  Imaginarium  name.  The  operating  results  of
Imaginarium  from  the date of  acquisition  were not  material  to the  overall
results of the company.

For 1999,  capital  requirements  for the company's  expansion  plans  mentioned
above,  as well as capital  requirements  for its  toysrus.com  subsidiary,  are
estimated to be approximately $550 to $600 million.

The company's  cash outflows from  operations  increased to $517 million for the
nine months  ended  October 30, 1999 from $480 million for the nine months ended
October  31,  1998  primarily  due to a larger  change in  operating  assets and
liabilities in 1999, as compared with 1998.




                                    11


<PAGE>


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

During the first nine months of 1999, the company repurchased approximately 10.6
million  shares of its common  stock  through its share  repurchase  program for
approximately  $179  million.  The company has $151 million  remaining in its $1
billion share repurchase program announced in January 1998.

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
commercial paper and bank borrowings by foreign subsidiaries.

Weighted-average  diluted shares  outstanding  decreased to 247.2 million during
the first nine months ended October 30, 1999 from 270.2 million during the first
nine months ended October 31, 1998,  due primarily to the shares  repurchased by
the company under its share repurchase program.

Recent Accounting Pronouncements
In June 1999, the Financial  Accounting Standards Board approved the deferral of
Statement No. 133 ("SFAS No. 133") - Accounting for Derivatives  Instruments and
Hedging  Activities,  which the  company is required to adopt in its fiscal year
beginning  February 2001. SFAS No. 133 requires that all derivative  instruments
be  recorded on the  balance  sheet at fair value.  Changes in the fair value of
derivatives are recorded each period in current earnings or other  comprehensive
income,  depending  on whether a  derivative  is  designated  as part of a hedge
transaction and the type of hedge  transaction.  The ineffective  portion of all
hedges will be  recognized in earnings.  While not expected to be material,  the
company is in the process of  determining  the impact that the  adoption of SFAS
No. 133 will have on the consolidated financial position,  results of operations
and cash flows of the company.

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.  The company may also make  forward-looking
statements in other documents filed with the Securities and Exchange Commission,
its Annual Report to shareholders,  its proxy  statement and in press releases.
All statements that are not historical  facts,  including  statements  about the
company's  beliefs  or  expectations,   are  forward-looking   statements.  Such
statements   involve  risks  and  uncertainties  that  exist  in  the  company's
operations  and  business  environment  that could  render  actual  outcomes and
results  materially  different  than  predicted.  The company's  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 the company conducts business (such as interest rates and
consumer confidence) and normal business




                                         12


<PAGE>


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

uncertainty.  While the company  believes that its assumptions are reasonable at
the time forward-looking statements were made, it cautions 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 the company  undertakes no obligation to
update such statements in light of new information or future events.



































                                            13

<PAGE>


                           PART II - OTHER INFORMATION



Item 1.           Legal Proceedings
                  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.  On October
                  13, 1998,  the FTC issued a final order and opinion  upholding
                  the FTC's complaint against the company.

                  The  company  has  appealed  the FTC's  decision to the United
                  States  Court of Appeals for the Seventh  Circuit.  The appeal
                  was argued on May 18, 1999.

                  After the filing of the FTC  complaint,  several  class action
                  suits  were  filed  against  the  company  in State  courts in
                  Alabama and California, alleging that the company has violated
                  certain  state  competition  laws  as  a  consequence  of  the
                  behavior  alleged  in the FTC  complaint.  After  the  Initial
                  Decision was handed  down,  more than thirty  purported  class
                  actions  were  filed in  federal  and state  courts in various
                  jurisdictions  alleging  that the  company  has  violated  the
                  federal  antitrust  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  sought  damages in  unspecified
                  amounts and other relief under state and/or federal law.

                  The company  believes  that it has always  acted fairly and in
                  the best  interests of its  customers and that both its policy
                  and its conduct in connection with the foregoing have been and
                  are within the law. However, to avoid the cost and uncertainty
                  of protracted  litigation the company has reached an agreement
                  to  settle,  subject  to  final  court  approval  (preliminary
                  approval having previously been granted by the court),  all of
                  the class  action and  attorney  general  lawsuits in a manner
                  which will not have a material adverse effect on its financial
                  condition,  results of  operations  or cash flow.  The company
                  accrued all  anticipated  costs  relating to this matter as of
                  January 30, 1999.



                                            14


<PAGE>


Item 5.           Other Information

                  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  2000 Annual Meeting
                  of  Stockholders  is  expected  to be held  on  June 7,  2000.
                  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 9, 2000 in
                  order to be considered timely.

Item 6.           Exhibits and Reports on Form 8-K


                 (a)   Exhibits

                       27.1 - Financial  Data Schedule for the quarter
                       ended October 30, 1999.


                 (b)   Reports on Form 8-K

                       On August 26, 1999,  the company  filed a Form 8-K in
                       connection with the resignation of Robert C. Nakasone
                       as  Chief  Executive  Officer  and  director  of  the
                       company and the  appointment of Michael  Goldstein as
                       acting Chief Executive Officer.

















                                        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:  December 14, 1999                 Toys "R" Us, Inc.
                                                  ------------------------
                                                  (Registrant)






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
















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