<PAGE>
 
                                 UNITED STATES
                      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 September 30, 1997.

Commission file number 000-22150
                       ------------

                      LANDRY'S SEAFOOD RESTAURANTS, INC.
          ----------------------------------------------------------
          (Exact name of the registrant as specified in its charter)

           Delaware                              74-0405386
   -----------------------              --------------------------
(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)              Identification No.)


             1400 Post Oak Blvd., Suite 1010, Houston, Texas 77056
         -------------------------------------------------------------
                   (Address of principal executive offices)


                                (713) 850-1010
          --------------------------------------------------------- 
                        (Registrant's telephone number)

     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  [_]

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

                       As of November 11, 1997 there were
                     25,886,637 shares of $0.01 par value
                           common stock outstanding.
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

                                     INDEX


<TABLE>
<CAPTION>  
                                                                                             PAGE 
                                                                                            NUMBER 
<S>                                                                                         <C> 
PART I. FINANCIAL INFORMATION                                                                      

Item 1.       Financial Statements                                                            2
 
              Condensed Unaudited Consolidated Balance Sheets at September 30, 1997 and
              December 31, 1996                                                               3
 
              Condensed Unaudited Consolidated Statements of Income for the Three
              Months and Nine Months ended September 30, 1997 and September 30, 1996          4
 
              Condensed Unaudited Consolidated Statements of Stockholders' Equity 
              for the Nine Months Ended September 30, 1997                                    5
 
              Condensed Unaudited Consolidated Statements of Cash Flows for the Nine  
              Months Ended September 30, 1997 and September 30, 1996                          6

              Notes to Condensed Unaudited Consolidated Financial Statements                7-9

Item 2.       Management's Discussion and Analysis of Financial Condition and Results 
              of Operations                                                               10-15
 
PART II.      OTHER INFORMATION
 
Item 1.       Legal Proceedings                                                              16
 
Item 2.       Changes in Securities                                                          16
 
Item 3.       Defaults upon Senior Securities                                                16
 
Item 4.       Submission of Matters to a Vote of Security Holders                            16
 
Item 5.       Other Information                                                              16
 
Item 6.       Exhibits and Reports on Form 8-K                                               16
 
Signatures                                                                                   17
</TABLE>

                                                                               1


<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

                        PART I.  FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

     The accompanying condensed unaudited consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission.  Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of the Company, all
adjustments (consisting only of normal recurring entries) necessary for fair
presentation of the Company's results of operations, financial position and
changes therein for the periods presented have been included.




                                                                               2
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

                CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        September 30,     December 31,
ASSETS                                                                      1997              1996
------                                                                  -------------     ------------
                                                                         (Unaudited)
<S>                                                                     <C>                <C>
CURRENT ASSETS:                                                        
     Cash and cash equivalents                                          $21,885,533       $ 57,267,986
     Accounts receivable--trade and other                                 9,149,136         10,575,874
     Inventory                                                           11,769,345         11,965,894
     Other current assets                                                 8,136,705          5,602,727
                                                                       ------------       ------------
               Total current assets                                      50,940,719         85,412,481
                                                                                    
PROPERTY AND EQUIPMENT, net                                             288,267,184        189,895,392
GOODWILL, net of amortization of $1,087,000                                         
     and $1,006,000, respectively                                         2,967,373          3,047,950
OTHER ASSETS, net                                                         3,635,450          2,842,892
                                                                       ------------       ------------
               Total assets                                            $345,810,726       $281,198,715
                                                                       ============       ============
                                                                                    
 LIABILITIES AND  STOCKHOLDERS' EQUITY                                              
--------------------------------------
                                                                                    
CURRENT LIABILITIES:                                                                
     Accounts payable                                                  $ 20,364,383       $ 10,655,053
     Accrued liabilities                                                 13,195,489          9,888,159
     Income taxes payable                                                 4,533,766                ---
     Short-term borrowings                                               15,000,000                ---
     Current portion of long-term notes and other obligations               318,643            492,555
                                                                       ------------       ------------
               Total current liabilities                                 53,412,281         21,035,767
                                                                                    
                                                                                    
LONG-TERM NOTES AND OTHER OBLIGATIONS, NON-CURRENT                          253,600            221,184
DEFERRED INCOME TAXES & OTHER LIABILITIES                                 3,494,353          3,494,353
                                                                       ------------       ------------
               Total liabilities                                         57,160,234         24,751,304
                                                                                    
COMMITMENTS AND CONTINGENCIES                                                       
STOCKHOLDERS' EQUITY:                                                               
     Preferred stock, $0.01 par value,  2,000,000 shares                            
          authorized, 2,730 and 28,398 issued and outstanding,
          respectively                                                           28                284
     Common stock, $0.01 par value, 60,000,000 shares                               
          authorized, 25,829,880 and 25,225,356 issued and                          
          outstanding, respectively                                         258,298            252,253
     Additional paid-in capital                                         247,909,826        238,083,067
     Retained earnings                                                   40,482,340         18,111,807
                                                                       ------------       ------------
               Total stockholders' equity                               288,650,492        256,447,411
                                                                       ------------       ------------
               Total liabilities and stockholders' equity              $345,810,726       $281,198,715
                                                                       ============       ============
</TABLE> 
 
 
   The accompanying notes are an integral part of these condensed unaudited
                      consolidated financial statements.

                                                                               3
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

             CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF INCOME


<TABLE> 
<CAPTION> 

                                                    Three Months Ended            Nine Months Ended
                                                -------------------------     -------------------------
                                                      September 30,                  September 30,
                                                  1997             1996          1997            1996
                                                --------         --------     --------         --------
<S>                                             <C>            <C>            <C>            <C>
REVENUES:
     Restaurant                                  $89,807,731   $ 64,390,122   $235,290,982   $180,235,734
     Processing Plant                                    ---            ---            ---      3,510,368
                                                 -----------   ------------   ------------   ------------
     Total revenues                               89,807,731     64,390,122    235,290,982    183,746,102
 
 
OPERATING COSTS AND EXPENSES:
     Cost of sales                                27,592,948     20,200,265     72,190,678     56,187,614
     Restaurant labor                             22,958,261     16,224,236     60,374,500     46,035,797
     Other restaurant operating expenses          18,755,733     14,631,769     49,444,683     39,264,193
     Merger costs                                        ---     25,971,815            ---     25,971,815
     Depreciation and amortization                 4,769,967      3,117,885     11,923,349      9,750,756
     Processing plant cost of sales and
        other operating expenses                         ---            ---            ---      3,857,224
     General and administrative expenses           2,693,761      1,916,579      7,538,746      7,299,380
                                                 -----------   ------------   ------------   ------------
          Total operating costs and expenses      76,770,670     82,062,549    201,471,956    188,366,779
                                                 -----------   ------------   ------------   ------------
 
OPERATING INCOME (LOSS)                           13,037,061    (17,672,427)    33,819,026     (4,620,677)
 
OTHER (INCOME) EXPENSE:
     Interest (income) expense, net                 (251,980)    (1,222,863)    (1,004,930)    (1,449,701)
     Other, net                                     (108,294)       123,741       (129,993)       244,208
                                                 -----------   ------------   ------------   ------------
          Total other (income) expense              (360,274)    (1,099,122)    (1,134,923)    (1,205,493)
                                                 -----------   ------------   ------------   ------------
 
INCOME (LOSS) BEFORE INCOME TAXES                 13,397,335    (16,573,305)    34,953,949     (3,415,184)
PROVISION FOR INCOME TAXES                         4,823,036     (5,994,382)    12,583,416     (1,272,595)
                                                 -----------   ------------   ------------   ------------
           
NET INCOME (LOSS)                                $ 8,574,299   $(10,578,923)  $ 22,370,533   $ (2,142,589)
                                                 ===========   ============   ============   ============
 
NET INCOME PER SHARE                                   $0.32         $(0.40)         $0.84         $(0.09)
                                                       =====         ======          =====         ======
 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND 
 COMMON SHARE EQUIVALENTS  OUTSTANDING            27,200,000     26,500,000     26,700,000     23,437,685
                                                 ===========   ============   ============   ============
</TABLE>

   The accompanying notes are an integral part of these condensed unaudited
                      consolidated financial statements.

                                                                               4
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

                 CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF
                             STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                    Preferred Stock       Common Stock       Additional
                                    ---------------    ------------------     Paid-In       Retained
                                    Shares   Amount     Shares     Amount     Capital       Earnings     Total
                                    ------   ------    -------     ------  -------------   ----------   -------- 
<S>                                 <C>      <C>       <C>         <C>     <C>           <C>          <C>
Balance, December 31, 1996          28,398   $ 284   25,225,356  $252,253  $238,083,067  $18,111,807  $256,447,411
Net income                             ---     ---          ---       ---           ---   22,370,533    22,370,533
Exercise of stock options  and
 income tax benefit                    ---     ---      578,856     5,789     9,826,759          ---     9,832,548
Conversion of preferred stock
 into common stock                 (25,668)   (256)      25,668       256           ---          ---           ---
                                   -------   -----   ----------  --------  ------------  -----------  ------------
Balance, September 30, 1997          2,730   $  28   25,829,880  $258,298  $247,909,826  $40,482,340  $288,650,492
                                   =======   =====   ==========  ========  ============  ===========  ============
 </TABLE>
 
   The accompanying notes are an integral part of these condensed unaudited
                      consolidated financial statements.

                                                                               5
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

           CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                               ---------------------------- 
                                                                                     September  30, 
                                                                                   1997             1996
                                                                               -------------   ------------
<S>                                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                   
     Net Income (Loss)                                                         $  22,370,533   $ (2,142,589)
     Adjustments to reconcile net income (loss) to net                         
          cash provided by operating activities--                       
               Depreciation and amortization                                      11,923,349      9,780,756
               Non-cash merger costs                                                     ---     17,623,337
               Change in assets and liabilities-net and other                     16,475,394     (8,772,071)
                                                                               -------------   ------------
                    Total adjustments                                             28,398,743     18,632,022
                                                                               -------------   ------------
               Net cash provided by operating activities                          50,769,276     16,489,433
                                                                               -------------   ------------
                                                                        
 CASH FLOWS FROM INVESTING ACTIVITIES:                                  
     Property and equipment additions                                           (107,272,447)   (44,121,127)
     Other assets, including goodwill                                               (817,160)      (982,560)
                                                                               -------------   ------------
               Net cash used in investing activities                            (108,089,607)   (45,103,687)
                                                                               -------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:                                   
     Payments on notes payable and other long-term obligations                      (141,497)   (28,730,253) 
     Borrowings on notes payable and short-term borrowings                        15,000,000     10,747,621       
     Net proceeds from sale of common stock                                              ---    105,513,000       
     Proceeds from exercise of stock options                                       7,079,395      3,020,864       
                                                                               -------------   ------------       
               Net cash provided by financing activities                          21,937,898     90,551,232       
                                                                               -------------   ------------       
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             (35,382,433)    61,936,978       
                                                                                                                   
CASH AND CASH EQUIVALENTS AT BEGINNING  OF PERIOD                                 57,267,986     17,701,721
                                                                               -------------   ------------       
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                     $  21,885,553   $ 79,638,699       
                                                                               =============   ============       
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                                                 
     Cash payments during the period for--                                                                         
          Income taxes                                                         $     420,895   $  5,315,927       
          Interest                                                             $     290,431   $    148,749        

</TABLE> 
                                                                    
   The accompanying notes are an integral part of these unaudited condensed
                      consolidated financial statements.

                                                                               6
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

        NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation

     The financial statements included herein have been prepared by the Company
without audit, except for the consolidated balance sheet as of  December 31,
1996.  The financial statements include all adjustments, consisting of normal,
recurring adjustments and accruals, which the Company considers necessary for
fair presentation of its financial position and results of operations.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted.  This information is contained in the Company's December
31, 1996, consolidated financial statements filed with the Securities and
Exchange Commission on Form 10-K.

Cash and Cash Equivalents

     For purposes of the condensed statements of cash flows, the Company
considers all highly liquid investments with original maturities of three months
or less to be cash equivalents.

Goodwill and Non-Compete Agreements

     Goodwill and non-compete agreements are amortized over 30 years and 15
years (or the life of the related agreement), respectively.

Earnings per Share

     Net income per share has been computed by dividing net income by the
weighted average common and common share equivalents outstanding, if material.
Common stock equivalent shares, which relate to stock options, are included in
the weighted average using the treasury stock method, when the effect is
material and dilutive.

New Accounting Principles

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share."  SFAS
No. 128 revises the methodology to be used in computing earnings per share (EPS)
such that the computations required for primary and fully diluted EPS are to be
replaced with basic and diluted EPS.  Basic EPS is computed by dividing net
income by the weighted average number of shares of common stock outstanding
during the year.  Diluted EPS is computed in the same manner as fully diluted
EPS, except that, among other changes, the average share price for the period is
used in all cases when applying the treasury stock method to potentially
dilutive outstanding options.

                                                                               7
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

        NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     The Company will adopt SFAS No. 128 effective December 15, 1997, and will
restate EPS for all periods presented.  The Company anticipates that the
restated amounts reported for basic and diluted EPS will be slightly higher than
the previously reported amounts for the unaudited nine months ended September
30, 1996 and 1997.

2. Accrued Liabilities

     Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
                                              September 30, 1997    December 31, 1996
                                              ------------------    -----------------
<S>                                           <C>                   <C>
Payroll and related costs                            $ 3,593,344         $1,431,765
Deferred income taxes                                    300,000            300,000
Taxes, other than payroll and income taxes             4,237,999          2,352,870
Other                                                  5,064,146          5,803,524
                                                     -----------         ----------
                                                     $13,195,489         $9,888,159
                                                     ===========         ==========
</TABLE>

3. Debt

          In June 1997, the Company obtained a $125 million unsecured credit
facility from a syndicate of banks which expires in June 2000, and is available
for expansion, acquisitions and general corporate purposes.  Interest on the
credit facility is generally payable quarterly at the Eurodollar rate plus 0.6%
or the bank's base rate.  The credit facility is governed by certain financial
covenants, including minimum tangible net worth, a maximum leverage ratio and a
minimum fixed charge coverage ratio. At September 30, 1997 the Company had $15
million outstanding under this credit facility at an interest rate of 6.54%.

4. Stockholders' Equity

          In connection with the Company's Stock Option Plans, certain stock
options aggregating approximately 800,000 shares, granted to the acquired Crab
House restaurant general managers, operations personnel and one officer at
$23.00 and $16.75, were repriced at $12.88 during the three month period ended
June 30, 1997.  An additional 1,000,000 options were granted to a variety of
management employees at $12.88 during the three month period June 30, 1997.  As
of September 30, 1997 all options have been granted (or repriced) at the stock
price on the grant date and are generally exercisable beginning one year from
the date of grant with annual vesting periods.

                                                                               8
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

        NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


5. Related Party Transactions

          On or about January 4, 1996 Fertitta Hospitality, which is jointly
owned by Mr. Fertitta and his wife, acquired certain properties in Galveston,
Texas in connection with the acquisition of a major resort area.  A portion of
the property acquired by Fertitta Hospitality contained a leased restaurant site
upon which a Landry's Seafood Restaurant was located and upon which the terms of
the lease relating to that restaurant had been negotiated in 1993 at arm's-
length between Landry's and the previous unaffiliated third party (the Woodlands
Corporation, a subsidiary of Mitchell Energy and Development Corp.)
owner/lessor.  Upon the acquisition by Fertitta Hospitality, Landry's continued
to pay rent under the original terms of the lease.  The rent was approved in
1993 by the Board at the time of the original lease with the unaffiliated party.
In May 1997 the restaurant property, including land, building and improvements
was purchased by the Company for $3,077,000.  Separately, in June 1997 the
Company loaned $300,000 to another officer of the Company.

6. Contingencies

          The Company is subject to legal proceedings and claims which arise in
the ordinary course of its business.  Management believes, based on discussions
with its legal counsel and in consideration of reserves recorded, that the
outcome of all legal actions will not have a material adverse effect upon the
consolidated financial position and results of operations of the Company.



                                                                               9
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Introduction

          The Company owns and operates full-service, casual dining seafood
restaurants.  As of September 30, 1997 the Company operated approximately 107
restaurants, including  three limited menu take-out service units under the name
"Capt. Crab Take-Away's".

          The Company's operations may be impacted by changes in federal and
state taxes and other federal and state governmental policies which include many
possible factors such as the level of minimum wages, the deductibility of
business and entertainment expenses, levels of disposable income and national
and regional economic growth.  The enactment of staged increases to federally
mandated minimum wage has increased the Company's labor costs.  Effective
October 1, 1996, the federal minimum wage increased from $4.25/hour to
$4.75/hour, and effective September 1,1997, increased to $5.15/hour.  The new
minimum wage increases affected primarily initial entry-level wages of the least
skilled jobs in the Company's restaurant kitchens, as the federal law mandated
an offsetting increase in the tip-credit amounts for tipped employees (i.e.,
waitstaff).

          This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which are intended to be
covered by the safe harbors created thereby.  Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation, the ability of the Company to continue its accelerated expansion
strategy, successful integration of the Crab House restaurants into the Company,
changes in costs of food, labor, and employee benefits, the ability of the
Company to continue to acquire prime locations at acceptable lease or purchase
terms, as well as general market conditions, competition, and pricing.  Although
the Company believes that the assumptions underlying the forward-looking
statements contained herein are reasonable, any of the assumptions could be
inaccurate, and therefore, there can be no assurance that the forward-looking
statements included in this report will prove to be accurate.  In light of the

                                                                              10
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.

Three Months Ended September 30, 1997 Compared to Three Months Ended September
30, 1996

          Revenues increased $25,417,609, or 39.5%, from $64,390,122 to
$89,807,731 in the three months ended September 30, 1997, compared to the three
months ended September 30, 1996.  The increase in revenues was attributable to
revenues from new restaurant openings.  There was a nominal change in revenues
from units opened prior to 1996.  

          As a primary result of increased revenues, cost of sales increased
$7,392,683, or 36.6%, from $20,200,265 to $27,592,948 in the three months ended
September 30, 1997 compared to the same period in the prior year.  Cost of sales
as a percentage of restaurant revenues for the three months ended September 30,
1997 decreased to 30.7% from 31.4% in 1996.  The decrease in cost of sales as a
percentage of restaurant revenues reflects slightly lower product costs and
better management cost controls in 1997.

          Restaurant labor expenses increased $6,734,025, or 41.5%, from
$16,224,236 to $22,958,261 in the three months ended September 30, 1997 compared
to the same period in the prior year. Restaurant labor expenses as a percentage
of restaurant revenues for the three months ended September 30, 1997 increased
to 25.6% from 25.2% in 1996, primarily due to the continued labor pressures
attributable in part to the recent increases in the minimum wage.

          Other restaurant operating expenses increased $4,123,964, or 28.2%,
from $14,631,769 to $18,755,733 in the three months ended September 30, 1997,
compared to the same period in the prior year, as a result of increased revenues
and the opening of new restaurants since September 30, 1996.  Such expenses
decreased as a percentage of restaurant revenues to 20.9% from 22.7% primarily
due to revenue growth of newly opened restaurants exceeding the increase in
other restaurant operating expenses.

          Depreciation and amortization expenses increased $1,652,082 or 53.0%
from $3,117,885 to $4,769,967 in the three months ended September 30, 1997,
compared to the same period in the prior year. The dollar increase was primarily
due to the addition of new restaurants and purchases of new equipment.
Depreciation and amortization as a percentage of restaurant revenue for the
three months ended September 30, 1997 increased to 5.3% from 4.8% during the
same period in 1996 primarily due to a increase in pre-opening amortization
expense during the three months ended September 30, 1997.  The increase in pre-
opening amortization expense is attributable to an increase in the relative
number of units subject to amortization and an increase in the per unit pre-
opening expenses.

                                                                              11
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

          General and administrative expenses increased $777,182, or 40.6%, from
$1,916,579 to $2,693,761 compared to the same period of the prior year, and
remained flat at 3% as a percentage of revenues.  The dollar increase resulted
primarily from increased personnel, salaries and travel to support the Company's
expansion plans.

          The decrease in net interest income of $970,883 is the result of lower
excess cash balances in the three months ended September 30, 1997, as compared
to the same period in the prior year.  The change in other expense of $232,035
was not deemed significant.

          Provision for income taxes changed by $10,817,418 from $(5,994,382) in
1996 to $4,823,036 in 1997 primarily due to the change in the Company's income.

Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
1996

          Revenues increased $51,544,880, or 28.1%, from $183,746,102 to
$235,290,982 in the nine months ended September 30, 1997, compared to the nine
months ended September 30, 1996.  The increase in revenue was attributable to
revenues from new restaurant openings offset by a reduction in processing plant
revenues.  There was a nominal change in revenues from units opened prior to
1996.  

          As a primary result of increased revenues, cost of sales increased
$16,003,064, or 28.5%, from $56,187,614 to $72,190,678 in the nine months ended
September 30, 1997 compared to the same period in the prior year.  Cost of sales
as a percentage of restaurant revenues for the nine months ended September 30,
1997 decreased to 30.6% from 31.1% in 1996.  The decrease in cost of sales as a
percentage of restaurant revenues reflects slightly lower product costs and
better management cost controls in 1997.

          Restaurant labor expenses increased $14,338,703 or 31.1%, from
$46,035,797 to $60,374,500 in the nine months ended September 30, 1997 compared
to the same period in the prior year.  Restaurant labor expenses as a percentage
of restaurant revenues for nine months ended September 30, 1997, increased to
25.7% from 25.5% primarily due to the continued labor pressures attributable in
part to the recent increases in the minimum wage.

          Other restaurant operating expenses increased $10,180,490, or 25.9%,
from $39,264,193 to $49,444,683 in the nine months ended September 30, 1997,
compared to the same period in the prior year, as a result of increased revenues
and the opening of new restaurants since September 30, 1996. Such expenses
decreased as a percentage of restaurant revenues to 21.0% from 21.8% primarily
due to revenue growth of newly opened restaurants exceeding the increase in
other restaurant operating expenses.
                                                                              12
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

          Depreciation and amortization expenses increased $2,172,593, or 22.3%
from $9,750,756 to $11,923,349 in the nine months ended September 30, 1997,
compared to the same period in the prior year. The dollar increase was primarily
due to the addition of new restaurants and purchases of new equipment.
Depreciation and amortization as a percentage of revenue for the nine months
ended September 30, 1997 decreased to 5.1% from 5.3% during the same period in
1996.  The percentage of revenue decrease is primarily due to a decrease in pre-
opening amortization expense during the first six months of 1997 partially 
offset by a subsequent increase in pre-opening expense during the three months
ended September 30, 1997. These changes were due to changes in the number of
units subject to amortization and changes in the per unit pre-opening expenses.

          General and administrative expenses increased $239,366, or 3.3%, from
$7,299,380 to $7,538,746 compared to the same period of the prior year, and
decreased as a percentage of restaurant revenues to 3.2% from 4.0%.  During the
first seven months of 1996, Landry's and Bayport operated as separate companies
and were increasing the general and administrative expenses to support each
company's separate growth plans.  However, upon the consummation of the merger,
Bayport's corporate offices were closed and substantially all of Bayport's
office employees were terminated. As a result, general and administrative
expenses, as a percentage revenues, were less than  the combined expenses of the
separate companies for the nine months ended September 30, 1997 compared to the
same period in the prior year.  The dollar increase resulted primarily from
increased personnel, salaries and travel to support the combined Company's
expansion plans offset by the reduction of Bayport general and administrative
expenses upon consummation of the merger.

          The decrease in net interest income of $444,771 is the result of lower
excess cash balances in the nine months ended September 30,1997, as compared to
the same period in the prior year.  The change in other expense of $374,201 was
not deemed significant.

          Provision for income taxes increased by $13,856,011 from $(1,272,595)
in 1996 to $12,583,416 in 1997 primarily due to the change in the Company's
income.

Liquidity and Capital Resources

          For the nine months ended September 30, 1997 the combined capital
expenditures of the Company was approximately $107.2 million which were
primarily funded out of existing cash balances and cash flow from operations.
During 1996, the Company incurred merger costs related to the acquisition of
Bayport and repaid the pre-merger outstanding indebtedness of Bayport. As a
result, the combined entities cash balances declined from approximately $119
million at June 30, 1996, immediately prior to the merger, to approximately $57
million at December 31, 1996, and the majority of the outstanding debt of the
combined companies was eliminated.

                                                                              13
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

          In 1994 and 1995 the Company, exclusive of Bayport, spent
approximately $32 million and $71 million on capital expenditures, respectively.
Since 1993, the Company has funded capital expenditures primarily from proceeds
of common stock offerings, and in part from cash flow from operations of
approximately $10 million and $19 million in 1994 and 1995, respectively.
Separately, Bayport spent approximately $5 million and $19 million in 1994 and
1995 on capital expenditures.  In recent years and through the date of the
merger, Bayport primarily funded capital expenditures out of borrowings.

          The Company's current development plans, which were increased during
the quarter, are to open approximately 6 to 10 restaurants during the balance of
1997. In addition, the Company has commenced working on a development plan for a
waterfront area in South Houston (the "Kemah Development"). The Kemah
Development includes up to eight restaurant sites, with possibilities of
additional light retail and hotel/motel facilities in a master planned
development. The Company currently operates five restaurants in this
development, and has not determined which portions of the remaining development
it will operate or sublease. Further, the Company is evaluating the feasibility
of building a multistory office building for the Company's corporate
headquarters. Due to the Company's rapid growth and increasing office needs, the
Company has experienced difficulty in obtaining adequate office space within the
desirable immediate area of its existing office. To this end, in July 1997 the
Company acquired a 4.5 acre undeveloped land parcel in Houston. Exclusive of any
additional acquisitions or large real estate purchases, the Company currently
expects to incur capital expenditures of up to 130-140 million in 1997,
depending upon the actual timing of construction expenditures, the number of
land purchases, the amount of expenditures spent on remodels, and the mix of
leased, owned or conversion type locations. The Company expects that its average
per unit investment, excluding real estate costs and pre-opening expenses, to
approximate $1.9 million. Historically, Crab House restaurants required a
significantly higher average unit investment cost due to their size, geographic
location and other factors. On a go-forward basis, the Company will attempt to
reduce the average new unit investment costs of future Crab House restaurants to
an amount more comparable to the Company's other restaurants. However,
individual unit investment costs can vary from management's expectations due to
a variety of factors. Moreover, average unit investment costs are dependent upon
many factors, including competition for sites, location, construction costs,
unit size and the mix of conversions, build-to-suit, leased and fee-owned
locations. The Company currently anticipates that it will continue to purchase a
portion of its new restaurant locations, which are expected to be more costly
than leased locations. Separately, the Company may additionally spend up to $20
million on the Kemah Development and up to $15 million on the Corporate
headquarter development, both of which will be spread over the next several
fiscal years. The Company is reviewing its alternative options related to the
corporate headquarters development, including the viability of a sale-leaseback,
an outright sale and other options whereby the Company would reduce its
aggregate investment in the project. The Company believes that existing cash
balances, cash generated from operations and potential financing sources will be
sufficient to satisfy the Company's working capital and capital expenditure
requirements through 1998.

                                                                              
                                                                              14
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

          The Company has a $125 million line of credit from a syndicate of
banks which expires in September 2000.  The line of credit is available for
expansions, acquisitions and general corporate purposes. At September 30, 1997 
the Company had $15 million outstanding under this credit facility at an
interest rate of 6.54%, and had cash balances aggregating approximately $22 
million.

Seasonality and Quarterly Results

          The Company's business is seasonal in nature, with revenues and, to a
greater degree, operating profits being lower in the first and fourth quarters
than in other quarters due to the Company's reduced winter volumes.  The timing
of unit openings can and will affect quarterly results.  To a degree, the
Company anticipates some moderation in revenues from the initial volumes of
units opened.

Impact of Inflation

          Management does not believe that inflation has had a significant
effect on the Company's operations during the past several years.  Management
believes the Company has historically been able to pass on increased costs
through menu price increases, but there can be no assurance that it will be able
to do so in the future.  Future increases in land and construction costs could
adversely affect the Company's ability to expand.

                                                                              15
<PAGE>
 
                      LANDRY'S SEAFOOD RESTAURANTS, INC.

                          PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

  There are no material pending legal proceedings to which registrant is a party
or of which   any of the property of the registrant is the subject, except for
claims in the ordinary course   of business, none of which are considered
material.
 
ITEM 2.  CHANGES IN SECURITIES                                  Not Applicable
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                        Not Applicable
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS    Not Applicable
 
ITEM 5.  OTHER INFORMATION                                      Not Applicable

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

    (A)   EXHIBITS
         
          27 FINANCIAL DATA SCHEDULE

    (B)   REPORTS ON FORM 8-K--NONE

 

                                                                              16
<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.

                         Landry's Seafood Restaurants, Inc.
                         (Registrant)


                         /s/ Tilman J. Fertitta
                         --------------------------------------        
                         Tilman J. Fertitta
                         Chairman of the Board of Directors
                         President and Chief Executive Officer
                         (Principal Executive Officer)


                         /s/ Paul S. West
                         --------------------------------------        
                         Paul S. West
                         Vice President-Finance and Chief Financial Officer
                         (Principal Financial and Accounting Officer)



Dated: November 14, 1997

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