<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 25, 1999


                                       OR


/ /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______


                         COMMISSION FILE NUMBER 0-22359


                                 TRACK `N TRAIL
             (Exact name of registrant as specified in its charter)


              DELAWARE                               91-1778085
  (State or other jurisdiction of      I.R.S. Employer Identification Number
   incorporation or organization)


            4961-A WINDPLAY DRIVE, EL DORADO HILLS, CALIFORNIA 95762
              (Address of principal executive offices) (zip code)


                                 (916) 933-4525
              (Registrant's telephone number, including area code)


Indicate by a 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


The number of shares of Registrant's Common Stock, $0.01 par value, outstanding
as of October 25, 1999 was 6,891,476.


<PAGE>

                                 TRACK 'N TRAIL

                                    FORM 10-Q

                        QUARTER ENDED SEPTEMBER 25, 1999


                                      INDEX

<TABLE>
<CAPTION>
                                                                                                    PAGE
                                                                                                    ----
<S>                                                                                                 <C>
PART I:    FINANCIAL INFORMATION (UNAUDITED)

           Item 1.      Financial Statements

                        Consolidated Balance Sheets as of September 25, 1999
                        and December 26, 1998.........................................................1

                        Consolidated Statements of Operations for the 39-Week and 13-Week
                        periods ended September 25, 1999  and September 26, 1998......................2

                        Consolidated Statements of Cash Flows for the 39-Week periods
                        ended September 25, 1999 and September 26, 1998...............................3

                        Notes to Consolidated Financial Statements...................................4-5

           Item 2.      Management's Discussion and Analysis of Financial
                        Condition and Results of Operations.........................................5-10


PART II:   OTHER INFORMATION

           Item 6.      Exhibits and Reports on Form 8-K.............................................11


SIGNATURES...........................................................................................12
</TABLE>


<PAGE>

PART I:  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                         TRACK 'N TRAIL AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)
                                   ----------

<TABLE>
<CAPTION>
                                                                                SEPTEMBER 25,    DECEMBER 26,
                                                                                    1999            1998
                                                                                --------------  ------------
                                                                                 (unaudited)
<S>                                                                             <C>             <C>
                                     ASSETS
Current assets:
    Cash and cash equivalents                                                      $   978        $ 1,808
    Accounts receivable                                                              1,037          2,510
    Income taxes receivable                                                              0            130
    Inventories                                                                     38,393         36,998
    Prepaid expenses                                                                   367            432
    Prepaid income taxes                                                             1,458              0
    Deferred income taxes                                                              675            675
                                                                                   -------        -------

              Total current assets                                                  42,908         42,553

Fixed assets, net                                                                   11,842         11,849
Goodwill, net                                                                        4,656          4,852
Deferred income taxes                                                                2,025          2,025
                                                                                   -------        -------

              Total assets                                                         $61,431        $61,279
                                                                                   -------        -------
                                                                                   -------        -------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Revolving line of credit                                                       $17,184        $ 1,574
    Current portion of long-term debt                                                   52            172
    Accounts payable                                                                 9,560         12,481
    Accrued payroll and bonuses                                                        712            561
    Sales tax payable                                                                  552            952
    Income taxes payable                                                                 0            687
    Accrued expenses and other liabilities                                           1,111          1,010
                                                                                   -------        -------

              Total current liabilities                                             29,171         17,437

Deferred rent                                                                        1,710          1,540
Long-term debt, net of current portion                                                   6          9,764
                                                                                   -------        -------

              Total liabilities                                                     30,887         28,741
                                                                                   -------        -------


Stockholders' equity:
    Preferred stock, $0.01 par value; 2,000,000 shares
      authorized; no shares issued or outstanding                                        0              0
    Common stock, $0.01 par value; 20,000,000 shares
      authorized; 6,891,476 and 6,851,961 shares issued and
      outstanding at September 25, 1999 and December 26, 1998, respectively             69             69
    Additional paid-in capital                                                      25,892         25,831
    Retained earnings                                                                4,583          6,638
                                                                                   -------        -------

              Total stockholders' equity                                            30,544         32,538
                                                                                   -------        -------

              Total liabilities and stockholders' equity                           $61,431        $61,279
                                                                                   -------        -------
                                                                                   -------        -------
</TABLE>


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


                                       1
<PAGE>

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   ----------
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                    PERIOD ENDED
                                                      ---------------------------------------------------------------------------
                                                      SEPTEMBER 25,        SEPTEMBER 26,       SEPTEMBER 25,        SEPTEMBER 26,
                                                          1999                 1998                1999                 1998
                                                       (13 WEEKS)           (13 WEEKS)          (39 WEEKS)           (39 WEEKS)
                                                      ------------         ------------        ------------         ------------
<S>                                                   <C>                  <C>                 <C>                  <C>
Net sales                                               $ 29,671             $ 25,662            $ 81,267             $ 66,881

Cost of sales                                             15,906               13,927              43,056               35,377
                                                        --------             --------            --------             --------

           Gross profit                                   13,765               11,735              38,211               31,504
                                                        --------             --------            --------             --------

Operating expenses:
    Selling and marketing                                 11,709                9,511              33,579               26,273
    Administrative and distribution                        2,090                1,945               6,794                5,860
                                                        --------             --------            --------             --------

           Total operating expenses                       13,799               11,456              40,373               32,133
                                                        --------             --------            --------             --------

           Operating income (loss)                           (34)                 279              (2,162)                (629)

Other expense:
    Interest expense                                         317                   89                 875                  140
    Other, net                                                66                   29                 117                   38
                                                        --------             --------            --------             --------

           Income (loss) before income taxes                (417)                 161              (3,154)                (807)

Income tax provision (benefit)                                92                   64              (1,099)                (323)
                                                        --------             --------            --------             --------

           Net income (loss)                            $   (509)            $     97            $ (2,055)            $   (484)
                                                        --------             --------            --------             --------
                                                        --------             --------            --------             --------

Earnings (loss) per share:
    Basic                                               $  (0.07)            $   0.01            $  (0.30)            $  (0.07)
                                                        --------             --------            --------             --------
                                                        --------             --------            --------             --------
    Diluted                                             $  (0.07)            $   0.01            $  (0.30)            $  (0.07)
                                                        --------             --------            --------             --------
                                                        --------             --------            --------             --------
</TABLE>


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


                                       2
<PAGE>

                         TRACK 'N TRAIL AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   ----------
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                        SEPTEMBER 25,         SEPTEMBER 26,
                                                                                            1999                  1998
                                                                                         (39 WEEKS)            (39 WEEKS)
                                                                                         ----------            ----------
<S>                                                                                      <C>                   <C>
Cash flows from operating activities:
    Net loss                                                                              $ (2,055)            $   (484)
    Adjustments to reconcile to cash used for operating activities:
      Depreciation and amortization                                                          1,997                1,507
      Loss on disposal of fixed assets                                                          56                   33
      Cash provided by (used for) changes in operating assets and liabilities:
           Accounts receivable                                                               1,473                  720
           Income taxes receivable                                                             130                    0
           Inventories                                                                      (1,395)              (9,077)
           Prepaid expenses                                                                     65                   30
           Prepaid income taxes                                                             (1,458)                (503)
           Accounts payable and other accrued liabilities                                   (3,071)               5,337
           Income taxes payable                                                               (687)              (1,089)
           Deferred rent                                                                       171                   66
                                                                                          --------             --------

           Cash used for operating activities                                               (4,774)              (3,460)
                                                                                          --------             --------

Cash flows from investing activities:
    Purchases of fixed assets                                                               (1,872)              (3,740)
    Proceeds from sale of fixed assets                                                          22                    0
    Cash paid for business combination                                                           0               (1,401)
                                                                                          --------             --------

           Cash used for investing activities                                               (1,850)              (5,141)
                                                                                          --------             --------

Cash flows from financing activities:
    Bank line of credit:
      Borrowings                                                                            51,217               32,211
      Repayments                                                                           (45,332)             (23,711)
    Long-term debt:
      Repayments                                                                              (153)                (943)
    Net proceeds from issuance of common stock                                                  62                   59
                                                                                          --------             --------

           Cash provided by financing activities                                             5,794                7,616
                                                                                          --------             --------

           Decrease in cash and cash equivalents                                              (830)                (985)

Cash and cash equivalents, beginning of period                                               1,808                2,383
                                                                                          --------             --------

Cash and cash equivalents, end of period                                                  $    978             $  1,398
                                                                                          --------             --------
                                                                                          --------             --------
</TABLE>


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


                                       3
<PAGE>

                         TRACK 'N TRAIL AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


1.  BASIS OF PRESENTATION

       INTERIM RESULTS

       The accompanying consolidated financial statements for the 13 weeks and
39 weeks ended September 25, 1999 and September 26, 1998 have been prepared in
accordance with generally accepted accounting principles ("GAAP"), and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. These financial
statements have not been audited by independent public accountants, but include
all adjustments (consisting of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
condition, results of operations and cash flows for such periods. However, these
results are not necessarily indicative of results for any other interim period
or for the full fiscal year. The accompanying consolidated balance sheet as of
December 26, 1998 has been derived from the audited financial statements, but
does not include all disclosures required by GAAP. The Company has historically
experienced significant quarterly fluctuations due to seasonality in operating
results and it expects that these fluctuations in sales, expenses, and net
income or losses will continue.

       The financial statements and related disclosures have been prepared with
the presumption that users of the interim financial information have read or
have access to the audited financial statements for the preceding fiscal year.
Accordingly, these financial statements should be read in conjunction with the
audited financial statements and the related notes thereto incorporated by
reference from the Company's Annual Report on Form 10-K for the fiscal year
ended December 26, 1998.

2.  EARNINGS PER SHARE

       Earnings per share ("EPS") is calculated under the provisions of
Statement of Financial Accounting Standards (SFAS) No. 128, EARNINGS PER SHARE.
SFAS No. 128 requires dual presentation of basic and diluted earnings per share
by entities with complex capital structures. Basic EPS excludes dilution and is
computed by dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock, or resulted in
the issuance of common stock, that then shared in earnings of the entity.

       A reconciliation of the numerators and denominators of the basic and
diluted earnings per share computations under SFAS No. 128 is as follows (in
thousands, except per share information):

<TABLE>
<CAPTION>
                                                                          Period Ended
                                             ------------------------------------------------------------------------
                                             September 25,      September 26,       September 25,       September 26,
                                                 1999               1998                1999               1998
                                              (13 weeks)         (13 weeks)          (39 weeks)         (39 weeks)
                                              ----------         ----------          ----------         ----------
<S>                                          <C>                <C>                 <C>                 <C>
Income (loss) available to common
stockholders for basic and diluted
earnings per share                             $  (509)            $    97            $(2,055)            $  (484)
                                               -------             -------            -------             -------
                                               -------             -------            -------             -------

Weighted average shares for basic
earnings (loss) per share                        6,889               6,851              6,873               6,845

Dilutive effect of stock options
(treasury stock method)                              0                 219                  0                   0
                                               -------             -------            -------             -------

Weighted average shares for diluted
earnings (loss) per share                        6,889               7,070              6,873               6,845
                                               -------             -------            -------             -------
                                               -------             -------            -------             -------

Earnings (loss) per share:
     Basic                                     $ (0.07)            $  0.01            $ (0.30)            $ (0.07)
                                               -------             -------            -------             -------
                                               -------             -------            -------             -------

     Diluted                                   $ (0.07)            $  0.01            $ (0.30)            $ (0.07)
                                               -------             -------            -------             -------
                                               -------             -------            -------             -------
</TABLE>


                                       4
<PAGE>

       For the 13 weeks and 39 weeks ended September 25, 1999 and the 39 weeks
ended September 26, 1998, all warrants and options outstanding were not dilutive
and, accordingly, were not included in the weighted number of common and common
equivalent shares outstanding. For the 13 weeks ended September 26, 1998, all
warrants outstanding and certain options with exercise prices in excess of
market value were not dilutive and, accordingly, were not included in the
weighted average number of common and common equivalent shares outstanding.


PART I:  FINANCIAL INFORMATION
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

       PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT. In
addition to historical information, this Management's Discussion and Analysis
includes certain forward-looking statements regarding events and financial
trends which may affect the Company's future operating results and financial
position. Such statements are subject to risks and uncertainties that could
cause the Company's actual results and financial position to differ materially.
Factors that could cause or contribute to such differences include those
discussed below. These and other risks and uncertainties related to the business
are described in detail in the Company's Annual Report on Form 10-K under the
heading "Risk Factors". Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release the result of any revisions
to these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

       NASDAQ STOCK MARKET LISTING. The Company's common stock is currently
included in the Nasdaq Stock Market and designated as a Nasdaq National Market
security. In order for the common stock to continue to be designated as a Nasdaq
National Market security and included in the Nasdaq Stock Market, the Company
and its common stock must meet certain quantitative maintenance criteria which
include, among other things, requirements that (1) the Company maintain
$4,000,000 in total assets, (2) the bid price of the common stock be at least
$1.00, (3) at least 750,000 shares of the common stock be held by persons who
are not affiliates of the Company, and (4) the shares held by non-affiliates of
the Company have an aggregate market value of at least $5,000,000. In addition,
continued inclusion in the Nasdaq Stock Market requires two registered and
active market-makers. As of October 25, 1999, the Company only had one
registered and active market-maker, and based on the closing bid price of the
Company's common stock of $1.3125, the aggregate market value of the 2,764,121
shares held by non affiliates was approximately $3,627,909. The failure of the
Company's common stock to meet the maintenance criteria may result in delisting
of the Company's common stock from the Nasdaq Stock Market, and trading, if any,
in the Company's common stock would thereafter be conducted in the Nasdaq
SmallCap Market (if then eligible) or the non-Nasdaq over-the-counter market. As
a result of such delisting, an investor could find it more difficult to dispose
of, or to obtain accurate quotations as to the market value of, the Company's
common stock.

OVERVIEW

         Track 'n Trail, a Delaware corporation (together with its subsidiaries,
unless the context otherwise requires, the "Company"), is one of the largest
full-service specialty retailers in the United States focusing on a broad range
of high-quality branded casual, outdoor and adventure footwear and apparel.
Pursuant to the reorganization (the "Reorganization") effected in October 1997,
the Company acquired the businesses conducted by its subsidiaries, Track `n
Trail, a California corporation ("Track `n Trail - California"), and Overland
Management Corporation ("Overland"). The Reorganization was accounted for in a
manner similar to a pooling of interests. In August 1998 the Company acquired
Nevin's Eagles Nest, Inc. ("Eagles Nest"), a retailer of premium branded outdoor
apparel. The Company operates in a single business segment. As of September 25,
1999, the Company operated 138 Track `n Trail stores, 46 Overland Trading
stores, and six Eagles Nest stores in 35 states.

         Comparable store sales are commonly used as a performance measurement
by retail companies. The Company defines comparable stores as those stores that
were open for the full fiscal period and for the full prior fiscal year. The
Company's comparable store net sales, exclusive of sales attributable to the
Eagles Nest stores acquired in 1998, increased 5.1% and 4.1% for the 13 weeks
and 39 weeks ended September 25, 1999, respectively.

RESULTS OF OPERATIONS

         The following discussions compare the Company's results of operations
for the 13 weeks and 39 weeks ended September 25, 1999 with its results for the
comparable periods in the prior year. The results achieved in these periods are
not necessarily indicative of results to be achieved in future periods. The
following comparative information should be read


                                       5
<PAGE>

in conjunction with the Consolidated Financial Statements and accompanying notes
for each period discussed, as well as the information presented in all other
sections of this Management's Discussion and Analysis.

         THIRTEEN WEEKS ENDED SEPTEMBER 25, 1999 COMPARED TO THIRTEEN WEEKS
ENDED SEPTEMBER 26, 1998

         NET SALES

         Net sales were $29.7 million for the 13 weeks ended September 25,
1999, representing an increase of $4.0 million, or 15.6%, over net sales of
$25.7 million for the comparable period in the prior year. Net sales for the
35 stores (net of closures) opened subsequent to fiscal 1997 accounted for
$2.1 million of the increase in net sales, and the Company's five Eagles Nest
stores acquired in August 1998 accounted for $854,000 of the increase in net
sales for the third quarter of fiscal 1999. Comparable store net sales for
the 13 weeks ended September 25, 1999 increased $1.0 million, or 5.1%. The
increase in comparable store net sales is due in part to a successful summer
sandal season as well as to a less competitive market than experienced during
the 13 weeks ended September 26, 1998 as a result of competitor store
closures. The Company expects to open approximately nine additional stores
during the remainder of fiscal 1999.

         GROSS PROFIT

         Gross profit was $13.8 million for the 13 weeks ended September 25,
1999, representing an increase of $2.0 million, or 17.3%, over gross profit for
the comparable period in the prior year. Gross profit as a percentage of net
sales increased to 46.4% for the 13 weeks ended September 25, 1999 from 45.7%
for the comparable period in the prior year. The increase in gross profit as a
percentage of net sales is primarily due to the decrease in markdowns taken in
the third quarter of 1999 compared to the markdowns taken in the third quarter
of 1998 in response to competitor discounting, which increase was partially
offset by sales attributable to the Eagles Nest stores on which margins are
generally lower than the margins on sales attributable to the Track `n Trail and
Overland Trading stores. Excluding the Eagles Nest stores, gross profit would
have increased to 47.3% for the 13 weeks ended September 25, 1999.

         SELLING AND MARKETING EXPENSES

         Selling and marketing expenses were $11.7 million for the 13 weeks
ended September 25, 1999, representing an increase of $2.2 million, or 23.1%,
over selling and marketing expenses for the comparable period in the prior year.
Approximately $671,000, or 30.5%, of this increase is attributable to the Eagles
Nest stores. The remaining increase is primarily attributable to operating costs
related to operating 11 additional Track `n Trail and Overland Trading stores at
September 25, 1999 versus September 26, 1998. As a percentage of net sales,
selling and marketing expenses increased to 39.5% for the 13 weeks ended
September 25, 1999 from 37.1% for the comparable period of the prior year,
primarily as a result of fixed operating costs attributable to a larger base of
new stores and the increased selling and marketing expenses required in
connection with the continuing assimilation of the Eagles Nest store operations.

         ADMINISTRATIVE AND DISTRIBUTION EXPENSES

         Administrative and distribution expenses were $2.1 million for the 13
weeks ended September 25, 1999, representing an increase of $145,000 over
administrative and distribution expenses for the comparable period in the prior
year. The addition of the Eagles Nest stores accounted for $98,000 of the
increase in administrative and distribution expenses. As a percentage of net
sales, administrative and distribution expenses decreased to 7.0% for the 13
weeks ended September 25, 1999 from 7.6% for the comparable period in the prior
year. The decrease as a percentage of net sales is primarily due to an increase
in comparable store net sales and the dilutive effect on fixed operating costs
resulting from the increased revenue attributable to a larger store base.

         INTEREST EXPENSE

         Interest expense was $317,000 for the 13 weeks ended September 25,
1999, representing an increase of $228,000 from interest expense of $89,000 for
the comparable period in the prior year. Debt incurred in connection with the
Eagles Nest acquisition accounted for $86,000, or 37.7% of this increase. The
remainder is attributable to an increase of the outstanding principal balance of
the Company's credit facility due to the expansion of the Company's store base.


                                       6
<PAGE>

         NET INCOME / LOSS

         The Company had a net loss for the 13 weeks ended September 25,
1999, of $509,000, representing a decrease of $606,000 from net income of
$97,000 for the comparable period in 1998. Eagles Nest accounted for $506,000
of the decrease in net income. The net loss for the 13 weeks ended September
25, 1999 was also attributable in part to the cumulative effect of adjusting
the estimated tax rate downward from 43.50% to 34.85% in response to the
losses experienced during the 39 weeks ended September 25, 1999.

         THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 1999 COMPARED TO THIRTY-NINE
WEEKS ENDED SEPTEMBER 26, 1998

         NET SALES

         Net sales were $81.3 million for the 39 weeks ended September 25,
1999, representing an increase of $14.4 million, or 21.5%, over net sales of
$66.9 million for the comparable period in the prior year. Net sales for the
35 stores (net of closures) opened subsequent to fiscal 1997 accounted for
$8.5 million of the increase in net sales, and the Company's five Eagles Nest
stores acquired in August 1998 accounted for $3.5 million of the increase in
net sales for the 39 weeks ended September 25, 1999. The increase in net
sales was partially offset by two stores temporarily closed for remodeling.
Comparable store net sales for the 39 weeks ended September 25, 1999
increased $2.3 million, or 4.1%. The increase in comparable store net sales
is primarily due to a successful summer sandal season as well as to a less
competitive market than experienced during the third fiscal quarter of 1998
as a result of competitor store closures. The Company expects to open
approximately nine additional stores during the remainder of fiscal 1999.

         GROSS PROFIT

         Gross profit was $38.2 million for the 39 weeks ended September 25,
1999, representing an increase of $6.7 million, or 21.3%, over gross profit of
$31.5 million for the comparable period in the prior year. The increase in gross
profit is primarily the result of a reduction in markdowns taken in the 39 weeks
ended September 25, 1999, from markdowns taken in the comparable period in 1998
in response to competitor discounting. Gross profit as a percentage of net sales
decreased to 47.0% for the 39 weeks ended September 25, 1999 from 47.1% for the
comparable period in the prior year. The decrease in gross profit as a
percentage of sales is primarily attributable to the Eagles Nest stores, which
generally carry lower margin merchandise. Excluding the Eagles Nest stores,
gross margin would have increased to 47.8% for the 39 weeks ended September 25,
1999.

         SELLING AND MARKETING EXPENSES

         Selling and marketing expenses were $33.6 million for the 39 weeks
ended September 25, 1999, representing an increase of $7.3 million, or 27.8%,
over selling and marketing expenses of $26.3 million for the comparable period
in the prior year. Approximately $2.1 million, or 29.0%, of the increase is
attributable to the Eagles Nest stores. The remaining increase is primarily
attributable to operating costs related to operating 11 additional Track `n
Trail and Overland Trading stores at September 25, 1999 versus September 26,
1998. As a percentage of net sales, selling and marketing expenses increased to
41.3% for the 39 weeks ended September 25, 1999 from 39.3% for the comparable
period in the prior year, primarily as a result of fixed operating costs
attributable to a larger base of new stores and increased selling and marketing
expenses required in connection with the continuing assimilation of the Eagles
Nest store operations.

         ADMINISTRATIVE AND DISTRIBUTION EXPENSES

         Administrative and distribution expenses were $6.8 million for the 39
weeks ended September 25, 1999, representing an increase of $934,000 over
administrative and distribution expenses of $5.9 million for the comparable
period in the prior year. The increase is primarily attributable to increases in
staffing and associated expenses as a result of the Company's continued internal
expansion. The Eagles Nest stores accounted for approximately $390,000 of the
increase in administrative and distribution expenses. As a percentage of net
sales, administrative and distribution expenses decreased to 8.4% for the 39
weeks ended September 25, 1999 from 8.8% for the comparable period in the prior
year. The decrease as a percentage of net sales is primarily due to an increase
in comparable store net sales and the dilutive effect on fixed operating costs
resulting from the increased revenue attributable to a larger store base.


                                       7
<PAGE>

         INTEREST EXPENSE

         Interest expense increased to $875,000, or 1.1% of net sales, for the
39 weeks ended September 25, 1999, from $140,000, or 0.2% of net sales, for the
comparable period in 1998. Debt incurred as a result of the Eagles Nest
acquisition accounted for approximately $255,000, or 34.6%, of this increase.
The remaining increase in interest expense is attributable to an increase of the
outstanding principal balance of the Company's credit facility due to the
expansion of the Company's store base.

         NET LOSS

         The Company had a net loss for the 39 weeks ended September 25, 1999
of $2.1 million, representing an increase of $1.6 million over a net loss of
$484,000 for the comparable period in 1998. Eagles Nest accounted for
approximately $1.1 million of the increase in net loss. The remaining
increase in net loss is primarily attributable to incremental fixed store
operating costs associated with a larger base of new stores. The net loss for
the 39 weeks ended September 25, 1999 was also attributable in part to an
adjustment of the estimated tax rate downward from 43.50% to 34.85% in
response to the losses experienced during the 39 weeks ended September 25,
1999.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has financed its operations from internally generated cash
flow, borrowings under its revolving line of credit, and equity financing. The
Company's liquidity requirements relate primarily to the financing of
inventories, build-out of new stores and remodeling of existing stores.

         Net cash used for operating activities for the 39 weeks ended September
25, 1999 was $4.8 million. Net cash used for or provided by operating activities
has historically been driven by net income levels combined with fluctuations in
inventory and accounts payable. Inventories at September 25, 1999 were $38.4
million compared to $37.0 million at December 26, 1998. The Company's average
store inventories vary throughout the year and increase in advance of the peak
selling periods of back-to-school and Christmas. The increase in inventory
between December 26, 1998 and September 25, 1999 relates primarily to seasonal
differences.

         The Company had $13.7 million in working capital as of September 25,
1999 compared to $25.1 million at the end of fiscal 1998, representing a
decrease of $11.4 million. The decrease in working capital is primarily the
result of reclassifying $9.7 million in long term debt as a result of an
amendment to the Company's existing loan agreement with Union Bank of
California. The Company's working capital needs increase significantly in the
fourth quarter due to increases in inventory in advance of the holiday selling
season, payments coming due for back-to-school merchandise and construction
payments on third quarter store build-outs. In addition, the Company requires
incremental working capital to stock each new store upon opening. Seasonally
strong holiday sales at the end of the fourth quarter, and relatively low first
quarter inventory levels, typically reduce working capital needs in the first
quarter.

         Capital expenditures were $1.9 million for the 39 weeks ended September
25, 1999. Capital expenditures in the first 39 weeks of 1999 were primarily for
the build-out of nine stores opened in this period, the build-out of two stores
opened in 1998, the remodel of two stores, software and hardware upgrades, and
furniture and fixtures for the Company's new distribution center. The Company
estimates capital expenditures for the remainder of the year to be approximately
$800,000 for the build-out of approximately nine additional stores,
approximately $50,000 for the remodel of one store and approximately $60,000 for
software and hardware upgrades.

         The Company reviews the operating performance of its stores on an
ongoing basis to determine which stores, if any, to close. The Company closed
seven underperforming stores in the first quarter of 1999, and closed an
additional four stores in the third quarter of 1999.

         Financing activities provided cash of $5.8 million for the 39 weeks
ended September 25, 1999, and consisted of additional borrowings under the
Company's revolving line of credit to fund working capital requirements.

         In October 1999, the Company's loan agreement with Union Bank of
California was amended to increase the revolving line of credit to $25.0
million. Management believes that the Company's operating cash flow and
borrowings under its

                                       8
<PAGE>

increased credit facility will be sufficient to complete the Company's fiscal
1999 and fiscal 2000 store expansion program and to satisfy the Company's other
capital requirements through such periods. The Company's capital requirements
may vary significantly from those anticipated depending upon such factors as
operating results, the number and timing of new store openings, and the number
and size of any potential future acquisitions.

YEAR 2000

         The Year 2000 problem concerns the inability of some computer programs
to recognize a year that begins with "20" instead of the familiar "19". For
computer programs that were written using two digits instead of four to define
the applicable year, they may recognize a date using "00" as the year 1900
instead of the year 2000. Computer programs which are not Year 2000 compliant
may fail or create erroneous results after December 31, 1999 (and in some cases
before), causing disruptions of operations, including, among other things, a
temporary inability to process transactions or send and receive electronic data
to or from third parties or engage in similar normal business activities.

         STATE OF READINESS

         The Company has developed a Year 2000 plan ("Y2K Plan") with the
objective of having all of its information technology ("IT") systems and non-IT
systems functioning properly with respect to the Year 2000 by December 31, 1999.
The Y2K Plan consists of the following phases: (1) assess the Year 2000
compliance of IT and non-IT systems and identify potential problems; (2) assign
priorities to identified Year 2000 problems; (3) remediation; (4) test IT and
non-IT systems; and (5) develop contingency plans, including the possibility of
securing alternate sources of supplies and services, increasing inventory and
supply levels, and adjusting store and office staffing levels. The Company
defines IT systems as all applications, operating systems and hardware on
mainframe, PC or LAN platforms. Non-IT systems refer to those with embedded
software or hardware that may have a time element. The Company has identified
three areas of focus for its Y2K Plan: corporate headquarters, store sites and
"key" third parties (the "Third Parties"). Third Parties include suppliers,
vendors and service providers that are deemed to be critical to the Company's
business operations. All phases of the Y2K Plan are being applied to these three
areas.

         An outside vendor provides the mainframe system software used at the
Company's corporate office. The software contains an operating system and seven
modules. The outside vendor has tested the operating system, merchandise,
accounts payable, sales audit, fixed assets, report writing, electronic data
exchange and general ledger modules and has verified to the Company that such
software is Year 2000 compliant. The manufacturer of the mainframe hardware has
tested the hardware and advised the Company that it is Year 2000 compliant.

         As of September 25, 1999, the Company has assessed all of the personal
computers and non-IT systems at the corporate headquarters and has retrofitted
and/or replaced all but five of the non-compliant systems. The remaining five
systems are scheduled to be replaced in the fourth quarter of 1999. The Local
Area Network (LAN) software and hardware manufacturers have advised the Company
that the LAN software and hardware used by the Company is Year 2000 compliant.

         The Company utilizes software produced by an outside vendor for its
human resource and payroll functions. In the third quarter of 1998, the outside
vendor upgraded and tested both systems and verified to the Company that they
are Year 2000 compliant.

         Contingency planning for the corporate headquarters category began in
third quarter 1998 and was completed in second quarter 1999.

         The Company uses Point of Sale (POS) hardware and software provided by
an outside vendor at each of its Track 'n Trail and Overland stores to record
sales transactions. Eagles Nest was converted to the same POS system in the
first quarter of 1999. In the first quarter of 1999, the Company completed the
Year 2000 compliant hardware upgrade for all of its stores. Additionally, the
Company purchased a Year 2000 compliant software upgrade for its POS systems and
completed retrofitting all of its stores with the upgraded software version in
the second quarter of 1999. POS systems for any new stores will be installed
with the upgraded version of the software. Contingency planning for the store
site category began in the first quarter of 1999 and was completed in the second
quarter of 1999.

         The Company initiated formal communications with all Third Parties to
determine the extent to which the Company is vulnerable to a Third Party's
failure to remediate its own Year 2000 issues. As of September 25, 1999, the


                                       9
<PAGE>

Company had received assurances from all Third Parties contacted regarding their
remediation efforts. Additionally, the Company completed contingency plans
pertaining to Third Parties in second quarter 1999.

         COSTS

         The Company expects its costs associated with becoming Year 2000
compliant to be approximately $58,000, exclusive of system additions, upgrades
or replacements incurred in the normal course of business and assuming that
implementation of contingency plans will not be necessary. The Company estimates
$21,000 of this amount will have been incurred repairing software problems and
$37,000 will have been incurred in connection with replacement of problem
systems and equipment. Costs incurred through September 25, 1999 have been
approximately $45,000. The remaining costs are expected to be incurred by the
end of fourth quarter 1999. The Company does not separately track the internal
costs incurred for the Y2K Plan. Such costs are principally related to the
payroll of the Company's Management Information Systems department. The
Company's policy is to expense maintenance and modification costs and capitalize
hardware and software purchases and upgrades. The Company intends to fund the
foregoing from operating cash flow.

         RISKS

         The failure to correct a material Year 2000 problem could result in an
interruption in, or failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial condition. Because of the range
of possible issues and large number of variables involved, it is impossible to
quantify the total potential cost of Year 2000 problems or to determine the
Company's worst-case scenario in the event the Company's Year 2000 remediation
efforts or the efforts of those with whom it does business are not successful.
In order to deal with the uncertainty associated with the Year 2000 problem, the
Company has developed contingency plans to address the possibility that efforts
to mitigate the Year 2000 risk are not successful either in whole or part. These
plans include manual processing of information for critical information
technology systems, increasing store staffing levels and inventory levels,
identifying alternative suppliers and increasing cash on hand. The contingency
plans were completed in the second quarter of fiscal 1999, and the appropriate
implementation training is scheduled to take place throughout the remainder of
the year. The Company believes that, upon completion of the Y2K Plan as
scheduled, the possibility of material interruptions of normal operations also
should be substantially lowered. No assurances can be given, however, that the
Company will not suffer material interruptions of normal operations, or that
such interruptions, even after the implementation of any contingency plans, will
not have a material adverse effect on the Company's results of operations,
liquidity and financial condition.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

The Company anticipates that its operating results will fluctuate as a result of
a number of factors, including the number and timing of store openings and
closures, seasonality, changes in pricing or promotion policies by the Company,
its competitors or its suppliers, the availability and cost of merchandise and
consumer acceptance of the products sold by the Company. The availability and
cost of merchandise may, in turn, fluctuate due to a number of factors including
changes in the Company's relationships with major suppliers, the Company's
access to private label manufacturing capacity, foreign currency fluctuations
and other risks associated with importing private label products from foreign
countries.


                                       10
<PAGE>

PART II:  OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

<TABLE>
<CAPTION>
     Exhibit
     Number                 Description of Document
   --------------------     --------------------------------------------------
<S>                         <C>
     10.13                  Amended and restated Loan Agreement dated as of
                            October 4, 1999 between Union Bank of California,
                            N.A. and the subsidiaries of the Registrant

     27.1                   Financial Data Schedule
</TABLE>

(b)      Reports on Form 8-K:

         There were no reports filed on Form 8-K during the quarter ended
September 25, 1999.


                                       11
<PAGE>

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







                                  TRACK `N TRAIL

Date:  October 27, 1999           By:   /s/ Daniel J. Nahmens
                                       ------------------------------------
                                                 Daniel J. Nahmens

                                       Executive Vice President - Finance and
                                       Chief Financial Officer and Treasurer
                                      (on behalf of the Registrant and as the
                                        Registrant's Principal Financial and
                                                Accounting Officer)


                                       12