<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 26, 1998


                                         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 the Registrant's Common Stock, $0.01 par value,
outstanding as of November 3,1998 was 6,851,961.


<PAGE>

                                   TRACK 'N TRAIL

                                     FORM 10-Q

                          QUARTER ENDED SEPTEMBER 26, 1998


                                       INDEX


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

          Item 1.   Financial Statements

                    Consolidated Balance Sheets as of September 26, 1998
                    and December 27, 1997. . . . . . . . . . . . . . . . . . . . . . . . . . .  1

                    Consolidated Statements of Operations for the 39-Week and 13-Week
                    periods ended September 26, 1998  and September 27, 1997 . . . . . . . . .  2

                    Consolidated Statements of Cash Flows for the 39-Week period
                    ended September 26, 1998 and September 27, 1997. . . . . . . . . . . . . .  3

                    Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . 4-6

          Item 2.   Management's Discussion and Analysis of Financial
                    Condition and Results of Operations. . . . . . . . . . . . . . . . . . . . 7-12


PART II:  OTHER INFORMATION

          Item 6.   Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . 13


SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>


<PAGE>

PART I:  FINANCIAL INFORMATION
Item 1.  Financial Statements

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

<TABLE>
<CAPTION>
                                                                                  SEPTEMBER 26,      DECEMBER 27,
                                                                                       1998              1997
                                                                                  -------------      ------------
<S>                                                                               <C>                <C>
                   ASSETS

Current assets:
   Cash and cash equivalents                                                          $  1,398       $  2,383
   Accounts receivable                                                                     828          1,540
   Inventories                                                                          38,129         27,852
   Prepaid expenses                                                                        298            311
   Prepaid income taxes                                                                    503             --
   Deferred income taxes                                                                   376            317
                                                                                   ------------     -----------
         Total current assets                                                           41,532         32,403

Fixed assets, net                                                                        9,860          7,284
Goodwill, net                                                                            4,918          3,084
Deferred income taxes                                                                    1,915          1,362
                                                                                   ------------     -----------
         Total Assets                                                                $  58,225      $  44,133
                                                                                   ------------     -----------
                                                                                   ------------     -----------
        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Revolving line of credit                                                          $   9,100      $      --
   Current maturities of long-term debt                                                     70            116
   Accounts payable                                                                     13,455          6,958
   Accrued payroll and bonuses                                                             849            668
   Sales tax payable                                                                       506            874
   Income taxes payable                                                                     --          1,089
   Accrued expenses and other liabilities                                                  988            802
                                                                                   ------------     -----------
                Total current liabilities                                               24,968         10,507

Deferred rent                                                                            1,541          1,424
Long-term debt, net of current maturities                                                   58            120
                                                                                   ------------     -----------
         Total liabilities                                                              26,567         12,051
                                                                                   ------------     -----------
Stockholders' equity:
   Preferred stock, $0.01 par value; 2,000,000 shares
      authorized; no shares issued or outstanding                                           --             --
   Common stock, $0.01 par value; 20,000,000 shares
      authorized; 6,851,961 and 6,839,811 shares issued and
      outstanding at September 26, 1998 and December 27, 1997, respectively                 69             68
   Additional paid-in capital                                                           25,831         25,772
   Retained earnings                                                                     5,758          6,242
                                                                                   ------------     -----------
         Total stockholders' equity                                                     31,658         32,082
                                                                                   ------------     -----------
         Total liabilities and stockholders' equity                                  $  58,225      $  44,133
                                                                                   ------------     -----------
                                                                                   ------------     -----------
</TABLE>

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

                                                    1


<PAGE>

                                       TRACK 'N TRAIL AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                __________ 


<TABLE>
<CAPTION>

                                                                          PERIOD ENDED
                                                    ----------------------------------------------------------
                                                    SEPTEMBER 26,  SEPTEMBER 27,  SEPTEMBER 26,  SEPTEMBER 27,
                                                        1998           1997           1998           1997
                                                     (13 WEEKS)     (13 WEEKS)     (39 Weeks)     (39 Weeks)
                                                    -------------  -------------  -------------  -------------
<S>                                                 <C>            <C>            <C>            <C>
Net sales                                              $  25,662      $  24,761      $  66,881      $  62,289

Cost of sales                                             13,927         12,975         35,377         32,388
                                                     ------------   ------------   ------------   ------------
      Gross profit                                        11,735         11,786         31,504         29,901
                                                     ------------   ------------   ------------   ------------
Operating expenses:
   Selling and marketing                                   9,511          7,787         26,273         22,315
   Administrative and distribution                         1,945          1,777          5,860          5,221
                                                     ------------   ------------   ------------   ------------
      Total operating expenses                            11,456          9,564         32,133         27,536
                                                     ------------   ------------   ------------   ------------
      Operating income (loss)                                279          2,222           (629)         2,365

Other (income) expense:
   Interest                                                   89            440            140          1,171
   Other, net                                                 29            (26)            38             (5)
                                                     ------------   ------------   ------------   ------------
      Income (loss) before income taxes                      161          1,808           (807)         1,199

Income tax provision (benefit)                                64            125           (323)          (249)
                                                     ------------   ------------   ------------   ------------
   Net income (loss)                                       $  97       $  1,683        $  (484)      $  1,448
                                                     ------------   ------------   ------------   ------------
                                                     ------------   ------------   ------------   ------------
Historical earnings (loss) per share:
   Basic                                                 $  0.01        $  0.41       $  (0.07)       $  0.35
                                                     ------------   ------------   ------------   ------------
                                                     ------------   ------------   ------------   ------------
   Diluted                                               $  0.01        $  0.39       $  (0.07)       $  0.34
                                                     ------------   ------------   ------------   ------------
                                                     ------------   ------------   ------------   ------------

Pro forma income data:
   Historical income before income taxes                               $  1,808                      $  1,199
   Pro forma income tax provision(Note 1)                                   723                           480
                                                                    ------------                  ------------

   Pro forma net income                                                $  1,085                        $  719
                                                                    ------------                  ------------
                                                                    ------------                  ------------
Pro forma earnings per share:
   Basic                                                                $  0.26                       $  0.18
                                                                    ------------                  ------------
                                                                    ------------                  ------------
   Diluted                                                              $  0.22                       $  0.15
                                                                    ------------                  ------------
                                                                    ------------                  ------------
</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)
                                                 __________

<TABLE>
<CAPTION>
                                                                                  SEPTEMBER 26,   SEPTEMBER 27,
                                                                                       1998           1997
                                                                                    (39 WEEKS)     (39 WEEKS)
                                                                                  -------------   -------------
<S>                                                                               <C>             <C>
Cash flows from operating activities:
   Net (loss) income                                                                   $  (484)      $  1,448
   Adjustments to reconcile to cash used for operating activities:
      Depreciation and amortization                                                      1,507          1,284
      Loss (gain) on disposal of fixed assets                                               33            (13)
      Compensation recorded in connection
        with stock option plans                                                             --             13
      Deferred income taxes                                                                 --           (132)
      Cash provided by (used for) changes in operating assets
         and liabilities, net of effects of business combination:
           Accounts receivable                                                             720            377
           Inventories                                                                  (9,077)        (7,055)
           Prepaid expenses                                                                 30            (58)
           Prepaid income taxes                                                           (503)            --
           Accounts payable and other accrued liabilities                                5,337          2,821
           Income taxes payable                                                         (1,089)          (756)
           Deferred rent                                                                    66             25
                                                                                    ------------    -----------
           Cash used for operating activities                                           (3,460)        (2,046)
                                                                                    ------------    -----------
Cash flows from investing activities:
   Purchases of fixed assets                                                            (3,740)        (1,137)
   Cash paid for business combination                                                   (1,401)            --
   Proceeds from sale of fixed assets                                                       --             28
                                                                                    ------------    -----------
           Cash used for investing activities                                           (5,141)        (1,109)
                                                                                    ------------    -----------
Cash flows from financing activities:
   Bank line of credit:
      Borrowings                                                                        32,211         36,930
      Repayments                                                                       (23,711)       (30,210)
   Long-term debt:
      Repayments                                                                          (943)          (718)
   Payment of distributions to stockholders                                                 --         (2,420)
   Offering expenses paid                                                                   --           (689)
   Proceeds from issuance of common stock                                                   59             --
                                                                                    ------------    -----------
      Cash provided by financing activities                                              7,616          2,893
                                                                                    ------------    -----------
      Decrease in cash and cash equivalents                                               (985)          (262)

Cash and cash equivalents, beginning of period                                           2,383            977
                                                                                    ------------    -----------
Cash and cash equivalents, end of period                                              $  1,398         $  715
                                                                                    ------------    -----------
                                                                                    ------------    -----------
</TABLE>

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

                                                    3
<PAGE>

                          TRACK 'N TRAIL AND SUBSIDIARIES
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




1.  BASIS OF PRESENTATION


     INTERIM RESULTS


     The accompanying consolidated financial statements for the 13 weeks and  39
weeks ended September 26, 1998 and September 27, 1997 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 year.  The accompanying consolidated balance sheet as of
December 27, 1997 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 27, 1997. 


     PRO FORMA INFORMATION

     Pro forma net income has been computed for periods during which a portion
of the Company's income was subject to S corporation taxes to include a
provision for income taxes at an effective tax rate of 40% representing
management's estimate of the effective tax rate as if the Company had been a C
corporation for all such periods.


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. 



                                       4
<PAGE>


2.  EARNINGS PER SHARE (continued) 


     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):


HISTORICAL EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                                              Period ended
                                                      -----------------------------------------------------------
                                                      September 26,   September 27,  September 26,  September 27,
                                                           1998           1997           1998           1997
                                                        (13 weeks)      (13 weeks)     (39 weeks)    (39 weeks)
                                                      -------------   -------------  -------------  -------------
<S>                                                   <C>             <C>            <C>            <C>
Income available to common 
stockholders (net income (loss)) for 
basic and diluted earnings per share . . . . . . .            $97        $1,683          $(484)        $1,448
                                                        ----------     ----------     ----------     ----------
                                                        ----------     ----------     ----------     ----------
Weighted average shares for basic 
earnings per share . . . . . . . . . . . . . . . .          6,851         4,108          6,845          4,108

Dilutive effect of stock options 
(treasury stock method). . . . . . . . . . . . . .            219           222              0            203
                                                        ----------     ----------     ----------     ----------
Weighted average shares for diluted 
earnings per share . . . . . . . . . . . . . . . .          7,070         4,330          6,845          4,311
                                                        ----------     ----------     ----------     ----------
                                                        ----------     ----------     ----------     ----------
Historical earnings (loss) per share:
  Basic  . . . . . . . . . . . . . . . . . . . . .          $0.01         $0.41         $(0.07)         $0.35
                                                        ----------     ----------     ----------     ----------
                                                        ----------     ----------     ----------     ----------
  Diluted. . . . . . . . . . . . . . . . . . . . .          $0.01         $0.39         $(0.07)         $0.34
                                                        ----------     ----------     ----------     ----------
                                                        ----------     ----------     ----------     ----------
</TABLE>


PRO FORMA EARNINGS PER SHARE
<TABLE>
<CAPTION>
                                                                          Period ended
                                                               ------------------------------------
                                                               September 27,          September 27,
                                                                   1997                   1997
                                                                (13 weeks)             (39 weeks)
                                                               ------------           -------------
<S>                                                            <C>                    <C>
Income available to common stockholders 
(pro forma net income) for basic and diluted 
earnings per share  . . . . . . . . . . . . . . . . . . . . .  $    1,085               $     719
                                                               -----------              ----------
                                                               -----------              ----------
Weighted average shares for basic earnings 
per share . . . . . . . . . . . . . . . . . . . . . . . . . .       4,108                   4,108

Dilutive effect of stock options (treasury stock method). . .         222                     203

Distribution Shares . . . . . . . . . . . . . . . . . . . . .         550                     550
                                                               -----------              ----------
Weighted average shares for diluted earnings 
per share . . . . . . . . . . . . . . . . . . . . . . . . . .       4,880                   4,861
                                                               -----------              ----------
                                                               -----------              ----------
Pro forma earnings per share:

  Basic . . . . . . . . . . . . . . . . . . . . . . . . . . .  $     0.26                $   0.18
                                                               -----------              ----------
                                                               -----------              ----------
  Diluted . . . . . . . . . . . . . . . . . . . . . . . . . .  $     0.22                $   0.15
                                                               -----------              ----------
                                                               -----------              ----------
</TABLE>


                                       5
<PAGE>

     For the 13 weeks ended September 26, 1998 and September 27, 1997 and for
the 39 weeks ended September 27, 1997, 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.  For 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.


3.  BUSINESS COMBINATION


     On August 26, 1998, the Company acquired all the outstanding shares of
capital stock of Nevin's Eagles Nest, Inc., a Colorado corporation d/b/a Eagles
Nest ("Eagles Nest").  The purchase price of the shares was $1.5 million in
cash, $100,000 of which remained payable at September 26, 1998.  Substantially
all of the cash was provided by the Company's credit facility.


     The acquisition was accounted for using the purchase method of accounting. 
The purchase price was allocated to the fair value of the assets and liabilities
acquired as follows:  $1.3 million to current assets, $244,000 to property,
plant and equipment, $518,000 to other assets, $1.1 million to accounts payable
and other accrued liabilities and $1.4 million to debt and capital lease
obligations.  This resulted in goodwill of $2.0 million.  Upon closing of the
Eagles Nest acquisition, the Company extinguished $1.4 million of Eagles Nest
debt.


     The following unaudited pro forma summary combines the consolidated results
of operations of the Company and Eagles Nest as if the acquisition had occurred
at the beginning of fiscal 1997 and fiscal 1998 after giving effect to certain
adjustments, including amortization of goodwill, revised depreciation based on
estimated fair market values, and revised interest expense based on the
additional borrowings and interest rate differentials on Eagles Nest debt
retired at acquisition.  The pro forma summary does not necessarily reflect the
results of operations as they would have been if the Company and Eagles Nest had
constituted a single entity during such periods (in thousands, except per share
information):


<TABLE>
<CAPTION>

                                              September 26,     September 27,
                                                  1998              1997
                                               (39 Weeks)        (39 Weeks)
                                              ------------      -------------
<S>                                           <C>               <C>

Net sales . . . . . . . . . . . . . . . . .    $  70,590          $  66,570
                                              -----------        ------------
                                              -----------        ------------
Net income (loss) before income taxes . . .    $  (1,356)         $     576

Income tax (benefit). . . . . . . . . . . .         (517)              (468)
                                              -----------        ------------
Net income (loss) . . . . . . . . . . . . .    $    (839)         $   1,044
                                              -----------        ------------
                                              -----------        ------------
Earnings (loss) per share:

   Basic  . . . . . . . . . . . . . . . . .    $  (0.12)          $    0.25
                                              -----------        ------------
                                              -----------        ------------
   Diluted  . . . . . . . . . . . . . . . .    $  (0.12)          $    0.24
                                              -----------        ------------
                                              -----------        ------------

Net income before income taxes  . . . . . .                          $  576

Pro forma income tax provision (Note 1) . .                             230
                                                                 ------------
                                                                 ------------

Pro forma net income  . . . . . . . . . . .                          $  346
                                                                 ------------
                                                                 ------------

Pro forma earnings per share:

   Basic   . . . . . . . . . . . . . . . . .                        $  0.08
                                                                 ------------
                                                                 ------------

   Diluted   . . . . . . . . . . . . . . . .                        $  0.07
                                                                 ------------
                                                                 ------------
</TABLE>

                                       6
<PAGE>

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.


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. On August 26,
1998, the Company acquired the outstanding common stock of Nevin's Eagles Nest,
Inc. ("Eagles Nest") in a cash-for-stock transaction (see attached "Notes to
Consolidated Financial Statements").  Eagles Nest is a mall-based retailer
primarily of premium branded outdoor apparel and  operates five stores, four in
Colorado and one in Nevada.  The Eagles Nest acquisition represents the
Company's entrance into the  apparel market, an expansion that also is expected
to provide new  customer streams for the footwear lines.  As is common in the
apparel industry, Eagles Nest margins are lower than those that the Company
currently experiences in its footwear business.  Since Eagles Nest results are
included for only one month in each of the periods reported, the full effect of
this margin differential will not be evident until future quarters.  As of
September 26, 1998, the Company operated 131 Track 'n Trail stores, 42 Overland
Trading stores and five Eagles Nest stores in 32 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 decreased 13.7% and 6.9% for the 13 weeks
and 39 weeks ended September 26, 1998, respectively, excluding the acquired
Eagles Nest stores.


     Pursuant to a reorganization  (the "Reorganization"), effected shortly
prior to the consummation of the Company's initial public offering (the
"Offering") on October 16, 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.



     Track 'n Trail-California was treated as an S corporation for federal and
certain state income tax purposes from June 28, 1992, until its S corporation
status terminated as a result of the Reorganization on October 7, 1997 (the
"Termination Date").  As a result, the earnings of Track 'n Trail-California
during such period were taxed, with certain exceptions, directly to the
stockholders of Track 'n Trail-California rather than to Track 'n
Trail-California.  Thereafter, Track 'n Trail-California has been subject to
state and federal income taxes as a C corporation, and all references to fiscal
1997 net income in this Management's Discussion and Analysis are to pro forma
net income, which is presented as if Track 'n Trail-California had been subject
to income taxes at a combined state and federal income tax rate of 40%.


RESULTS OF OPERATIONS


     The following discussions compare the Company's results of operations for
the 13 weeks and 39 weeks ended September 26, 1998 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 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.


                                       7
<PAGE>

THIRTEEN WEEKS ENDED SEPTEMBER 26, 1998 COMPARED TO THIRTEEN WEEKS ENDED
SEPTEMBER 27, 1997


     NET SALES


     Net sales were $25.7 million for the 13 weeks ended September 26, 1998, an
increase of $901,000, or 3.6%, over the $24.8 million in  net sales for the
comparable period in the prior year.  The five Eagles Nest stores acquired
contributed $416,000, or 46.2%, of this increase in net sales.  Of the
remaining $25.3 million in net sales for the quarter,  $3.8 million is
attributable to the net sales of the 12 stores (net of subsequent closures)
opened in the fourth quarter of fiscal 1997 and the 28 stores opened in the
first 39 weeks of fiscal 1998.  Of the 10 stores the Company opened during the
third quarter of fiscal 1998, seven were opened in September and as a result,
the Company does not expect to see a material contribution from these stores or
the Eagles Nest stores until the fourth quarter of fiscal 1998.  Aggregate
incremental net sales of  $135,000 also were contributed by the 8 stores opened
in the first 39 weeks of fiscal 1997.  A comparable store sales decrease of
13.7%  reduced net sales by $3.1 million  for the 13 weeks ended September 26,
1998.  In addition, net  sales were affected by three store closures in the
third quarter of fiscal 1998.  The decrease in comparable store sales is
primarily due to heavy discounting by competitors (in part because of competitor
store closures)  which put pressure on both the customer stream and prices. The
Company's sales were also adversely affected by a lack of "freshness" in vendor
styling and unseasonably warm weather which impacted the traditional late third
quarter sales.  The Company expects to open approximately seven new stores
during the remainder of fiscal 1998. 


     GROSS PROFIT


     Gross profit was $11.7 million for the 13 weeks ended September 26, 1998, a
decrease of $52,000, or 0.4%, from the gross profit for the comparable period in
the prior year.  Gross profit as a percentage of net sales decreased to 45.7%
for the 13 weeks ended September 26, 1998 from 47.6% in the comparable period in
the prior year.  Eagles Nest accounted for 0.1% of the decrease in gross profit
as a percentage of net sales while the remaining decrease is primarily
attributable to markdowns taken in response to competitor discounting.


     SELLING AND MARKETING EXPENSES


     Selling and marketing expenses were $9.5 million for the 13 weeks ended
September 26, 1998, an increase of  $1.7  million, or 22.1%, over the selling
and marketing expenses in the comparable period in the prior year.  Eagles Nest
accounted for $134,000 of the increase.  The remaining $1.6 million increase is
primarily attributable to operating costs related to operating 37 additional 
stores at September 26, 1998 versus September 27, 1997.  As a percentage of net
sales, selling and marketing expenses increased to 37.1% in the 13 weeks ended
September 26, 1998 from 31.4% in the comparable period in the prior year,
primarily attributable to operating costs associated with a larger store base in
a period in which the Company experienced declining comparable store sales and
opened new stores which have a lower initial sales base.


     ADMINISTRATIVE AND DISTRIBUTION EXPENSES


     Administrative and distribution expenses were $1.9 million for the 13 weeks
ended September 26, 1998, an increase of $168,000, or 9.5%, over the
administrative and distribution expenses for the  comparable period in  the
prior year.  This increase is primarily attributable to increases in staffing
and associated expenses as a result of the Company's expansion and becoming a
public company.  In addition, Eagles Nest accounted for $48,000 of the increase
in administrative and distribution expenses.  As a percentage of net sales,
administrative and distribution expenses increased to 7.6% in the 13 weeks ended
September 26, 1998 from 7.2%  in the comparable period in the prior year.  The
increase as a percentage of net sales is primarily due to a decrease in
comparable store sales.    


     INTEREST EXPENSE


     Interest expense decreased to $89,000 for the 13 weeks ended September 26,
1998, a decrease of $351,000 or 79.8% from $440,000 in the comparable period in
the prior year.  Eagles Nest accounted  for $23,000, or 25.5%, of total interest
expense.  As a percentage of net sales, interest expense decreased to 0.3% in
the 13 weeks ended September 26, 1998 from 1.8% in the comparable period in the
prior year.  The decrease was primarily attributable to  repayment of the debt
incurred in connection with the acquisition of Overland  and  reduction of the
outstanding principal balance of the Company's credit facility  from the
proceeds from the Offering.

                                       8
<PAGE>

     NET INCOME


     The Company's net income for the 13 weeks ended September 26, 1998 was
$97,000, a decrease of  $987,000 from the net income of $1.1 million  in the
comparable period in 1997.  Eagles Nest accounted for $15,000 of the decrease in
net income.  The remaining decrease in net income is primarily attributable to
fixed operating costs associated with a larger store base in a period in which
the Company experienced both declining comparable store sales and the start up
costs associated with a larger base of new stores.


THIRTY-NINE WEEKS ENDED SEPTEMBER 26, 1998 COMPARED TO THIRTY-NINE WEEKS ENDED
SEPTEMBER 27, 1997


     NET SALES


     Net sales were $66.9 million for the 39 weeks ended September 26, 1998, an
increase of $4.6 million, or 7.4%, over the $62.3 million in net sales for the
comparable period in the prior year.  The five Eagles Nest stores added
$416,000, or 9.1%, of the increase in net sales.  Of the remaining $66.5 million
in net sales for the first thirty-nine weeks of fiscal 1998, $7.3 million  is
attributable to the net sales of the 12 stores (net of subsequent closures)
opened in the fourth quarter of fiscal 1997 and the 28 stores opened in the
first 39 weeks of fiscal 1998.  Of the 23 stores (net of closures) the Company
opened in fiscal 1998, seven were opened in September and as a result, the
Company does not expect to see a material contribution from these stores or the
five Eagles Nest stores until the fourth quarter of fiscal 1998.  Aggregate
incremental net sales of $1.3 million  also were contributed by the 8 stores
opened in the first 39 weeks of fiscal 1997.  Comparable store sales decreased
$4.0 million, or 6.9%, for the 39 weeks ended September 26, 1998.  In addition,
net sales were affected by three store closures in the third quarter of fiscal
1998.  The decrease in comparable store sales is primarily due to the
disruptions caused by the unseasonably wet and cold spring weather associated
with El Nino and heavy discounting by competitors (in part because of competitor
store closures) which put pressure on both the customer stream and prices.  The
Company's sales were also affected by  a lack of "freshness" in vendor styling
and unseasonably warm weather which impacted the traditional late third quarter
sales.  The Company expects to open approximately seven additional stores during
the remainder of fiscal 1998.


     GROSS PROFIT


     Gross profit was $31.5 million for the 39 weeks ended September 26, 1998,
an increase of $1.6 million, or 5.4%, over  the $29.9 million in gross profit
for the comparable period in the prior year.   Eagles Nest contributed $178,000,
or 11.1%, of the increase in gross profit.  Gross profit as a percentage of net
sales decreased to 47.1% for the 39 weeks ended September 26, 1998 from 48.0% in
the comparable period in the prior year, primarily as a result of markdowns
taken to liquidate winter goods in the first quarter and in response to
competitor discounting in the third quarter.


     SELLING AND MARKETING EXPENSES


     Selling and marketing expenses were $26.3 million for the 39 weeks ended
September 26, 1998, an increase of $4.0 million, or 17.7%, over the $22.3
million in selling and marketing expenses for the  comparable period in the
prior year.  Eagles Nest accounted for $134,000, or 3.4%, of this increase. The
remaining increase is primarily attributable to operating costs related to
operating 37 additional stores at September 26, 1998 versus September 27, 1997.
As a percentage of net sales, selling and marketing expenses increased to 39.3%
in the 39 weeks ended September 26, 1998 from 35.8% in the comparable period in
the prior year, primarily attributable to operating costs associated with a
larger store base in a period in which the Company experienced declining
comparable store sales and opened new stores which have a lower initial sales
base.


     ADMINISTRATIVE AND DISTRIBUTION EXPENSES


     Administrative and distribution expenses were $5.9 million for the 39 weeks
ended September 26, 1998, an increase of $639,000, or 12.2%, over the
administrative and distribution expenses for the comparable period in  the prior
year.  This increase is primarily attributable to increases in staffing and
associated expenses as a result of the Company's expansion and becoming a public
company.  In addition, Eagles Nest accounted for $48,000 of the increase in
administrative and distribution expenses.  As a percentage of net sales,
administrative and distribution expenses increased  to 8.8% in the 39 weeks
ended September 26, 1998 from 8.4% in the comparable period in the prior year. 
Eagles Nest accounted for  0.1%


                                       9
<PAGE>

of the increase of administrative and distribution expenses as a percentage 
of net sales and the remaining percentage increase is primarily attributable 
to a decrease in comparable store sales.


     INTEREST EXPENSE


     Interest expense decreased to $140,000, or 0.2% of net sales, for the 39
weeks ended September 26, 1998, from $1.2 million, or 1.9% of net sales, in the
comparable period in the prior year.  This decrease was primarily attributable
to  repayment of the debt incurred in connection with the acquisition of
Overland  and  reduction of the outstanding principal balance of the Company's
credit facility  from the proceeds from the Offering.  Interest expense incurred
by Eagles Nest since its acquisition was $23,000, or 16.2% of total interest
expense.


     NET INCOME/LOSS


     The Company's net loss for the 39 weeks ended September 26, 1998 was
$484,000, a decrease of  $1.2 million from the  net income of $719,000 in the
comparable period in 1997.  Eagles Nest accounted for $15,000, or 1.3%, of the
decrease in net income.  The remaining decrease in net income is primarily
attributable to fixed operating costs associated with a larger store base in a
period in which the Company experienced both declining comparable store sales
and the start up costs associated with a larger base of new stores.


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.  During
the third quarter of 1998, the Company also used funds for the acquisition of
Eagles Nest.


     Net cash used for operating activities for the 39 weeks ended September 26,
1998 was $3.5 million.  Net cash used for operating activities has historically
been driven by net income levels combined with fluctuations in inventory and
accounts payable.  Inventories at September 26, 1998 were $38.1 million compared
to $27.9 million at December 27, 1997.  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 five Eagles Nest stores acquired accounted
for $1.8 million of the increase.  The remaining increase in inventory between
December 27, 1997 and September 26, 1998 relates primarily to the opening of 23
new stores (net of closures), increased inventory levels in  five larger format
stores and inventory purchased in advance for the stores  to be opened in
October.


     The Company had $16.6 million in working capital as of September 26, 1998
compared to $21.9 million at the end of fiscal 1997, a decrease of $5.3 million.
The decrease in working capital is primarily due to an increase in capital
expenditures for the construction of new stores and the acquisition of Eagles
Nest.  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 $3.7 million, excluding acquisitions, for the 39
weeks ended September 26, 1998.  Capital expenditures in the first 39 weeks of
1998 were primarily for the build-out of 28 new stores, the completion of four
stores opened in 1997, and the remodeling of three stores.  An additional $1.4
million of cash was used for investing activities for the  acquisition of Eagles
Nest. The Company estimates capital expenditures for the remainder of the year
to be $700,000 for the build-out of approximately seven additional stores,
$320,000 for the final build-out of stores opened earlier in the fiscal year,
$700,000 for remodels and $350,000 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 two
stores in the first quarter of 1998 and closed three additional stores in the
third quarter.

                                       10
<PAGE>

     Financing activities provided cash of $7.6 million for the 39 weeks ended
September 26, 1998, attributable to additional borrowings under the Company's
revolving line of credit to fund working capital  requirements as well as to
fund the acquisition of Eagles Nest.  Cash was also used from financing
activities for the early retirement of long-term debt.


     In October management amended their existing loan agreement with Union Bank
of California to increase the revolving line of credit to $20.0 million. 
Management believes that the Company's operating cash flow and  borrowings under
its new credit facility will be sufficient to complete the Company's fiscal 1998
and fiscal 1999  planned store expansion  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 The Year 2000 Plan ("Y2K Plan") with the
objective of having all 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; 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 its Year 2000 exposure as falling into  three categories:
corporate headquarters; store sites; and "key" third parties (Third Parties).
Third Parties include suppliers, vendors, and service providers that are deemed
to be critical to business operations.  All phases of the Y2K Plan are being
applied to these three categories.


CORPORATE HEADQUARTERS.  An outside vendor provides the mainframe system
software used at the corporate office.  The software contains an operating
system and seven modules.  The outside vendor has tested the operating system,
merchandise, accounts payable, sales audit and general ledger modules and
verified to the Company that such software is Year 2000 compliant.  The Company
has received Year 2000 compliant upgrade software for the electronic data
exchange and report writing modules, and expects installation and testing to be
complete in fourth quarter 1998.  The outside vendor has developed a Year 2000
upgrade for the fixed assets module and expects testing and delivery to be
complete in fourth quarter 1998.  The manufacturer of the mainframe hardware
which runs the software has tested the hardware and verified to the Company that
it is Year 2000 compliant.


As of September 26, 1998, the Company had assessed approximately 75% of the
personal computers at the corporate headquarters, of which approximately 50%
were found to be non-Year 2000 compliant.  The Company expects the remaining
personal computers and non-IT systems will be assessed  by the end of fiscal
1998.  Retrofitting and/or replacement and subsequent testing of non-compliant
systems is scheduled for first quarter 1999.  The Local Area Network (LAN)
software and hardware has been verified by the respective manufacturers to be
Year 2000 compliant.


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


The Company has identified the systems most critical to ongoing operations
within the corporate headquarters category.  Contingency planning for this
category  began in third quarter 1998 and is scheduled for completion in second
quarter 1999. 

                                       11
<PAGE>

STORE SITES.  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 will be converted to the same POS
system in the first quarter of 1999.  As of the end of third quarter 1998, the
Company had retrofitted and tested POS systems with the Year 2000 compliant
upgrade in 15 of its 178 stores, and expects to upgrade and test the remaining
units by the end of first quarter 1999.  POS systems for new stores, if any,
will be installed with the upgraded version of the software.  Contingency
planning for this category is scheduled to begin first quarter 1999 and is
expected to be completed by second quarter 1999.


THIRD PARTIES.  The Company has 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.  To the extent that the
Company does not receive adequate assurances, it will develop contingency plans,
with completion of these plans scheduled no later than the end of second quarter
1999.


     COSTS


The total costs associated with becoming Year 2000 compliant is not expected to
be material to the Company's financial position.  The Company expects such costs
in the aggregate to be approximately $53,000, exclusive of system additions,
upgrades or replacements incurred in the normal course of business and assuming
no implementation of  contingency plans will be necessary.  The Company
estimates $21,000 of this ultimate amount will have been incurred repairing
software problems and $32,000 will have been incurred in connection with
replacement of problem systems and equipment.  Costs through September 26, 1998
have been approximately $12,000.  The remaining costs are expected to be
incurred within the next 12 months.  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.  Due to 
the general uncertainty inherent in the Year 2000 problem, particularly the 
uncertainty of the Year 2000 readiness of Third Parties, the Company is 
unable to determine at this time whether the consequences of Year 2000 
failures will have a material impact on the Company's results of operations, 
liquidity or financial condition. As the Y2K Plan continues to be implemented 
the Company's level of uncertainty about the Year 2000 problem and, in 
particular, about the Year 2000 compliance and readiness of its Third Parties 
should be significantly reduced.  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 may not suffer material interruptions of 
normal operations. 

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.

                                       12
<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 9, 1998
               between Union Bank of California, N.A. and the subsidiaries of
               the Registrant.

 27.1          Financial Data Schedule


(b)  Reports on Form 8-K:
</TABLE>

     There were no reports filed on Form 8-K during the quarter ended 
September 26, 1998.




                                       13
<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:  November 3, 1998                 By:      /s/Daniel J. Nahmens
                                           --------------------------------
                                                   Daniel J. Nahmens
                                              Vice President-Finance and
                                             Chief Financial Officer and
                                             Treasurer (on behalf of the
                                                Registrant and as the
                                                    Registrant's
                                               Principal Financial and
                                                  Accounting Officer







                                       14