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 quarter ended April 25, 1999           Commission File Number 1-8881



                                  SBARRO, INC.
             (Exact name of registrant as specified in its Charter)


                  NEW YORK                             11-2501939
         (State or other jurisdiction of            (I.R.S. Employer I.D. No.)
         incorporation or organization)

 401 Broad Hollow Road, Melville, New York                  11747
    (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:     (516) 715-4100

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the  preceding  12 months,  and (2) has been  subject to such filing
requirements for the past 90 days.

Yes      X                 No

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


Class                               Outstanding at June 4, 1999

Common Stock, $.01 par value                   20,534,313

--------------------------------------------------------------------------------


<PAGE>






                                  SBARRO, INC.

                                 FORM 10-Q INDEX



PART I.     FINANCIAL INFORMATION                                         PAGES


Consolidated Financial Statements:

  Balance Sheets - April 25, 1999 (unaudited) and January 3, 1999. . . . .   3-4

  Statements of Income (unaudited) - Sixteen Weeks ended April 25, 1999
      and April 19, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6

  Statements of Cash Flows (unaudited) - Sixteen Weeks ended April 25, 1999
      and April 19, 1998 . . . . . . . . . . . . . . .. . . . . . . . . . . .7-8

  Notes to Unaudited Consolidated Financial Statements - April 25, 1999 . . 9-11

Management's Discussion and Analysis of Financial Condition and
             Results of Operations . . . . . . . . . . . . . . . . . . . . 11-19


PART II.    OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .20-21
            -----------------














                                      Pg. 2

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS



                                            (In thousands)
                                   April 25, 1999              January 3, 1999
                                   (unaudited)
Current assets:
     Cash and cash equivalents          $146,072                      $150,472


     Receivables:
       Franchisees                         1,396                         1,342
       Other                               2,325                         2,185
                                ----------------              ----------------

                                           3,721                         3,527

     Inventories                           2,885                         3,122

     Prepaid expenses                      3,868                         1,291
       Total current assets              156,546                       158,412


Property and equipment, net              138,732                       138,126


Other assets                               6,712                         6,630
                              ------------------             -----------------

                                        $301,990                      $303,168
                                 ===============                ==============






                                   (continued)



                                      Pg. 3

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>

<CAPTION>
                                                                 (In thousands)
                                                                  April 25, 1999              January 3, 1999
 <S>                                                                 (unaudited)
                                                                       <C>                             <C>
     Accounts payable                                                 $5,272                          $ 7,122
     Accrued expenses                                                 23,762                           25,764
     Income taxes                                                         37                            4,146
                                                                 ----------------             ---------------

       Total current liabilities                                      29,071                           37,032


Deferred income taxes                                                  9,043                            9,219


Shareholders' equity:
     Preferred stock, $1 par value; authorized
       1,000,000 shares; none issued                                      -                               -
     Common stock, $.01 par value; authorized
       40,000,000 shares; issued and outstanding
       20,533,645 shares at April 25, 1999 and
       20,531,643 shares at January 3, 1999                              205                             205
     Additional paid-in capital                                       34,634                          34,587

     Retained earnings                                               229,037                         222,125
                                                                ---------------                -------------
                                                                     263,876                         256,917
                                                                ---------------                -------------

                                                                    $301,990                        $303,168
                                                               ==============                 ==============

</TABLE>





            See notes to unaudited consolidated financial statements




                                      Pg. 4

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                   (UNAUDITED)

<TABLE>

<CAPTION>
                                                                (In thousands, except per share data)
                                                                      For the sixteen weeks ended:
                                                                 April 25, 1999                   April 19, 1998
Revenues:
<S>                                                               <C>                               <C>
     Restaurant sales                                             $100,354                          $98,131
     Franchise related income                                        2,506                            2,306
     Interest income                                                 1,591                            1,446
                                                              --------------                 --------------
       Total revenues                                              104,451                          101,883
                                                              --------------                 --------------

Costs and expenses:
     Cost of food and paper products                                20,964                           20,668
     Restaurant operating expenses:
       Payroll and other employee benefits                          28,103                           26,551
       Occupancy and other                                          31,941                           29,892
     Depreciation and amortization                                   6,700                            6,670
     General and administrative                                      6,791                            5,964
     Other income                                                   (1,197)                            (700)
                                                               ---------------               ---------------
       Total costs and expenses                                     93,302                           89,045
                                                              ---------------                 -------------

Income before income taxes and cumulative
     effect of change in method of accounting
     for start-up costs                                             11,149                           12,838
Income taxes                                                         4,237                            4,878
                                                              ---------------                 -------------
Income before cumulative effect
     of accounting change                                            6,912                            7,960

Cumulative effect of change in method
     of accounting for start-up costs, less
     income tax benefit of $504                                          -                             (822)
                                                             ----------------               ---------------

Net income                                                        $  6,912                         $  7,138
                                                              ===============                ==============


</TABLE>

                                   (continued)

                                      Pg. 5

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                   (UNAUDITED)


                                       (In thousands, except per share data)
                                            For the sixteen weeks ended:
                                        April 25, 1999         April 19, 1998

Per share information:
     Net income per share:

     Basic:

       Income before accounting change          $.34                 $.39
       Accounting change                           -                 (.04)
                                              ------                ------

       Net income                               $.34                 $.35
                                                ====                 ====

     Diluted:

       Income before accounting change          $.34                 $.39
       Accounting change                           -                 (.04)
                                              ------                ------

       Net income                               $.34                 $.35
                                                ====                 ====

Shares used in computing net income
     per share:

     Basic                                20,532,200           20,491,939
                                          ----------           ----------

     Diluted                              20,574,522           20,665,846
                                          ----------           ----------




            See notes to unaudited consolidated financial statements





                                      Pg. 6


<PAGE>


                          SBARRO, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            (In thousands)
                                                                      For the sixteen weeks ended:
                                                        April 25, 1999                   April 19, 1998
Operating activities:

<S>                                                              <C>                                 <C>

Net income                                                       $6,912                              $7,138
Adjustments to reconcile net income to net
     cash provided by operating activities:
       Cumulative effect in change in method
         of accounting for start-up costs                                                               822
       Depreciation and amortization                              6,967                               6,670
       Provision for deferred income taxes                         (176)                               (205)
       Changes in operating assets and liabilities:
         (Increase) decrease in receivables                        (194)                                 66
         Decrease in inventories                                    237                                 243
         Increase in prepaid expenses                            (2,577)                             (1,783)
         Increase in other assets                                  (135)                               (523)
         Decrease in accounts payable and accrued
            expenses                                             (3,852)                             (5,853)
         Decrease in income taxes payable                        (4,109)                             (4,345)
                                                                 ---------                      -------------


Net cash provided by operating
     activities                                                   3,073                                2,230
                                                                -----------                   -- -----------

Investing activities:

Purchases of property and equipment                              (7,520)                              (9,360)
                                                                --------------                --------------

Net cash used in investing activities                            (7,520)                              (9,360)
                                                                --------------                --------------



</TABLE>


                                   (continued)


                                      Pg. 7

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                                   (UNAUDITED)

<TABLE>

<CAPTION>
                                                                            (In thousands)
                                                                      For the sixteen weeks ended:
                                                              April 25, 1999              April 19, 1998
Financing activities:
<S>                                                               <C>                           <C>
Proceeds from exercise of stock options                                 47                       1,991
Cash dividends paid                                                      -                      (5,521)
                                                              -----------------             ----------------

Net cash provided by (used in) financing activities                     47                      (3,530)
                                                              ----------------              ----------------

Decrease in cash and cash equivalents                               (4,400)                     (10,660)

Cash and cash equivalents at beginning of period                   150,472                      119,810
                                                               --------------                --------------


Cash and cash equivalents at end of period                        $146,072                      $109,150
                                                                =============                 =============



Supplemental disclosure of cash flow information:

Cash paid during the period for income taxes                        $8,432                        $9,353
                                                              ===============               ===============




</TABLE>








            See notes to unaudited consolidated financial statements



                                      Pg. 8


<PAGE>




                          SBARRO, INC. AND SUBSIDIARIES
              Notes to Unaudited Consolidated Financial Statements


1.       Basis of presentation:

         The accompanying  unaudited consolidated financial statements have been
         prepared  in  accordance  with  the  instructions  for  Form  10-Q  and
         Regulation  S-X related to interim  period  financial  statements  and,
         therefore,  do not include all  information  and footnotes  required by
         generally accepted  accounting  principles.  However, in the opinion of
         management, all adjustments (consisting of normal recurring adjustments
         and  accruals)  considered  necessary  for a fair  presentation  of the
         consolidated  financial position of the Company and its subsidiaries at
         April 25, 1999 and their  consolidated  results of operations  and cash
         flows for the  sixteen  weeks  ended  April 25, 1999 and April 19, 1998
         have been included.  The results of operations for the interim  periods
         are not necessarily  indicative of the results that may be expected for
         the  entire  year.  Reference  should be made to the  annual  financial
         statements,  including  footnotes  thereto,  included in the  Company's
         Annual Report on Form 10-K for the fiscal year ended January 3, 1999.

2.       Proposed merger:

         On January 19, 1999,  the Company  entered into a merger  agreement for
         the merger of a company  owned by members  of the  Sbarro  family,  the
         Company's  principal  shareholders,  with and into the Company in which
         all  outstanding  Common  Stock  of the  Company  not  owned  by  those
         shareholders  are to be converted  into the right to receive  $28.85 in
         cash. The shares to be purchased  comprise  approximately  65.6% of the
         Company's  outstanding  shares  of  Common  Stock.  In  addition,   all
         outstanding stock options, including those held by those members of the
         Sbarro  family,  will be terminated.  For each such option,  the holder
         thereof  will be paid the  difference  between  $28.85 and the exercise
         price per  share,  multiplied  by the total  number of shares of Common
         Stock subject to such option.

         The merger agreement contains certain conditions to closing, including,
         among  other  things,  (i)  approval  by a  majority  of the votes cast
         (excluding   votes  cast  by  those  members  of  the  Sbarro   family,
         abstentions  and broker  non-votes)  in addition to  two-thirds  of all
         outstanding Common Stock at a meeting of the Company's  shareholders to
         be called to consider adoption of the merger agreement, (ii) receipt of
         financing for the  transactions  contemplated by the merger  agreement,
         (iii) the continued suspension of dividends by the Company and (iv) the
         settlement of  shareholder  class action  lawsuits that have been filed
         relating to the merger.

         Following the Company's  announcement of the proposal by members of the
         Sbarro  family  for  the  merger,  seven  class  action  lawsuits  were
         instituted by  shareholders  against the Company,  those members of the
         Sbarro  family who are  directors of the Company and all or some of the
         other  directors of the Company.  The  proposed  class  consists of all
         record and beneficial  owners of the Company's  Common Stock during the
         period  beginning  with the close of business on November  25, 1998 and
         ending on the  effective  date of the merger.  While the  complaints in
         each of the law-

                                         Pg. 9

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES
        Notes to Unaudited Consolidated Financial Statements (continued)


         suits  vary,  in  general,  they  allege  that the  directors  breached
         fiduciary duties,  that the then proposed price of $27.50 to be paid to
         shareholders  other  than  those  members  of  the  Sbarro  family  was
         inadequate and that there were  inadequate  procedural  protections for
         public shareholders.  Although varying, the complaints seek, generally,
         a declaration  of a breach of, or an order  requiring the defendants to
         carry  out,  their  fiduciary  duties  to the  plaintiffs,  damages  in
         unspecified  amounts  alleged  to be  caused to the  plaintiffs,  other
         relief (including injunctive relief or rescission or rescissory damages
         if the  transaction  is  consummated),  and  costs  and  disbursements,
         including a reasonable allowance for counsel fees and expenses.

         On January 19, 1999,  counsel for all of the plaintiffs and counsel for
         all of  the  defendants  entered  into a  Memorandum  of  Understanding
         pursuant  to which an  agreement  in  principle  to  settle  all of the
         lawsuits was reached and the Sbarro family agreed to an increase in the
         merger   consideration   to  $28.85  per  share.   The   Memorandum  of
         Understanding  states that  plaintiffs'  counsel intend to apply to the
         Court for an award of attorneys' fees and disbursements in an amount of
         no  more  than  $2.1  million  to be  paid by the  Company,  which  the
         defendants  have  agreed  not  to  oppose.   The  defendants  are  also
         responsible  for  providing  notice  of the  settlement  to  all  class
         members.  The settlement would result in the complete discharge and bar
         of all claims against,  past, present and future officers and directors
         of the Company and others  associated  with the merger with  respect to
         matters  and  issues  of any kind  that  have  been or could  have been
         asserted  in these  lawsuits.  On  April  7,  1999,  a  Stipulation  of
         Settlement  was entered into  embodying the terms of the  Memorandum of
         Understanding.  The settlement is subject to, among other things, court
         approval of the  settlement  and  consummation  of the merger.  It is a
         condition to the Sbarro family's obligations under the merger agreement
         that holders of no more than  1,000,000  shares of Common Stock request
         exclusion  from the  settlement.  The Court has scheduled a hearing for
         June 29, 1999 to consider the settlement.

3.       Cumulative effect of accounting change:

         In  accordance  with its  early  application  provisions,  the  Company
         implemented  Statement of Position 98-5 (SOP) the Accounting  Standards
         Executive  Committee  of the American  Institute  of  Certified  Public
         Accountants  as of the  beginning  of its 1998  fiscal  year.  This SOP
         required  companies that  capitalize  pre-opening  and similar costs to
         write off all existing such costs, net of tax benefit, as a "cumulative
         effect of accounting  change" and to expense all such costs as incurred
         in the future.

4.       Earnings per share:

         The number of shares of common stock subject to stock options  included
         in diluted  earnings  per share were  42,322 and 173,907 in the sixteen
         week periods ended April 25, 1999 and April 19, 1998, respectively.


                                       Pg. 10

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES
        Notes to Unaudited Consolidated Financial Statements (continued)


5.       Comprehensive income:

         The Company's  operations did not give rise to any items  includible in
         comprehensive  income which were not already included in net income for
         either of the sixteen week  periods  ended April 25, 1999 and April 19,
         1998.




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

General

         On January 19, 1999,  the Company  entered into a merger  agreement for
the merger of a company  owned by members of the Sbarro  family,  the  Company's
principal  shareholders,  with and into the Company in which all the outstanding
Common Stock of the Company not owned by those  shareholders are to be converted
into the right to receive  $28.85 in cash.  The shares to be purchased  comprise
approximately  65.6% of the Company's  outstanding  shares of Common  Stock.  In
addition,  all outstanding stock options,  including those held by those members
of the Sbarro  family,  will be  terminated.  For each such  option,  the holder
thereof will be paid the  difference  between  $28.85 and the exercise price per
share,  multiplied by the total number of shares of Common Stock subject to such
option.

         The merger agreement contains certain conditions to closing, including,
among other  things,  (i) adoption of the merger  agreement by a majority of the
votes cast  (excluding  votes cast by the Sbarro family,  abstentions and broker
non-votes),  in addition to two-thirds  of all  outstanding  Common Stock,  at a
meeting of the Company's  shareholders to be called to consider  adoption of the
merger agreement, (ii) receipt of financing for the transactions contemplated by
the merger agreement, (iii) the continued suspension of dividends by the Company
and (iv) the  settlement  of  shareholder  class action  lawsuits that have been
filed relating to the merger.

         This Report  does not give  effect to changes in the  Company  that may
occur if the merger is consummated.








                                      Pg. 11

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


Results of Operations

         The  Company's  fiscal year ends on the Sunday  nearest to December 31.
The fiscal year which  ended on January 3, 1999  contained  53 weeks.  All other
reported fiscal years  contained 52 weeks.  The Company's 1999 fiscal year began
on January 4, 1999,  six days later than its 1998  fiscal  year,  which began on
December 29, 1997. Therefore,  the first quarter of the 1999 fiscal year did not
benefit from seasonally strong "post-Christmas" revenues and profit margins. The
Company  estimates  that this resulted in decreases in first quarter fiscal 1999
revenues of approximately  $1,300,000,  net income of approximately $450,000 and
basic and diluted earnings per share of approximately $.02.

         The Company's business is subject to seasonal fluctuations, the effects
of weather and  economic  conditions.  Earnings  have been highest in its fourth
quarter due primarily to increased  volume in shopping  malls during the holiday
shopping season. The length of the holiday shopping period between  Thanksgiving
and Christmas and the number of weeks in the fourth quarter can produce  changes
in the fourth quarter earnings relationship from year to year. The fourth fiscal
quarter normally  accounts for approximately 40% of net income for the year. The
1998 year,  which contained 53 weeks,  had a 13 week fourth quarter.  The fourth
quarter of 1998 (excluding  non-recurring items) accounted for approximately 41%
of net income for the year.  Excluding the 53rd week,  the fourth  quarter would
have accounted for 38% of such net income for the year.
























                                     Pg. 12

<PAGE>

                          SBARRO, INC. AND SUBSIDIARIES


         The  following  table  provides  information  concerning  the number of
Company-owned  and  franchised  restaurants  in operation  during each indicated
period:

<TABLE>
<CAPTION>
                                                16 Weeks          16 Weeks
                                                  Ended             Ended                            Fiscal Year
                                                                                            -------------------------
                                                  04/25/99         04/19/98                  1998              1997
                                                  --------         --------                  ----              ----
Company-owned restaurants:
<S>                        <C>                      <C>               <C>                     <C>                <C>
   Opened during period   (1)                        7                 10                      26                30
   Acquired from (sold to)
     franchisees during period-net                                      1                       1                 4
   Closed during period                              (2)               (6)                    (20)               (8)
   Open at end of period   (2)                      635               628                     630               623

Franchised restaurants:
   Opened during period                              13                 9                      43                47
   Purchased from (sold to)
     Company during period-net                                         (1)                     (1)               (4)
   Closed or terminated during period                (6)               (4)                    (13)              (23)
   Open at end of period                            275               243                     268               239

All restaurants:
   Opened during period   (1)                        20                19                      69                 77
   Closed or terminated during period                (8)              (10)                    (33)               (31)
   Open at end of period   (2)                      910               871                     898                862

Kiosks (all franchised) open at
   end of period                                     8                  9                      8                   7


(1)    Includes, in the fiscal year 1998, one joint venture mall location which
        operates as Umberto of Hyde Park.
(2)    As of April 25,  1999 and the end of the 1998  fiscal  year  there  were
        six, and as of April 19, 1998 and the end of 1997 fiscal year there were
        five, joint venture mall locations which operate as Umberto of New Hyde
        Park.


</TABLE>







                                     Pg. 13


<PAGE>



Restaurant  sales  from  Company-owned  and  consolidated  joint  venture  units
increased 2.3% to  $100,354,000  for the sixteen weeks ended April 25, 1999 from
$98,131,000  for the sixteen weeks ended April 19, 1998.  The increase  resulted
from a higher  number of units in operation  in the current  fiscal year than in
the  comparable   period  in  1998  and  selective   menu  price   increases  of
approximately  1.4% and .7% at  Company-owned  units which  became  effective in
September  1998 and  February  1998,  respectively.  The  selective  menu  price
increases were the primary factor in a .2% increase in comparable  unit sales to
$93,837,000  in the sixteen  weeks ended April 25, 1999.  These  increases  were
partially  offset by the  effects of the timing of the  beginning  of the fiscal
year in 1999 compared to 1998 as discussed  above.  Comparable  restaurant sales
are made up of sales at  locations  that were open  during  the  entire  current
period and entire prior fiscal year.

Franchise  related  income  increased 8.7 % to $2,506,000  for the sixteen weeks
ended April 25, 1999 from $2,306,000 for the sixteen weeks ended April 19, 1998.
This increase  resulted  primarily  from greater  continuing  royalties due to a
higher  number of  franchise  units in operation in the current year than in the
comparable period in 1998. The six units that were closed by franchisees  during
the quarter ended April 25, 1999 did not produce  material  levels of sales and,
consequently,  did not  generate  material  amounts  of  royalty  income  to the
Company.  Comparable sales at franchise locations  decreased  approximately 1.5%
for the sixteen  weeks ended April 25,  1999 from the  comparable  sixteen  week
period  in 1998  primarily  due to lower  unit  sales at  Russian,  Israeli  and
Japanese franchise locations.

Interest  income  increased to $1,591,000  for the sixteen weeks ended April 25,
1999 from  $1,446,000 for the sixteen weeks ended April 19, 1998.  This increase
was due to higher  amounts of cash  available for investment in the current year
period than in the prior year period,  partially  offset by lower interest rates
in the first fiscal quarter of 1999 than in the similar period in 1998.

Cost of food and paper products as a percentage of restaurant  sales improved to
20.9% for the  sixteen  weeks  ended  April 25,  1999 from 21.1% for the sixteen
weeks ended April 19, 1998.  Cheese prices,  which were the primary cause of the
increase in food costs in fiscal 1998,  have decreased  significantly  since the
beginning  of fiscal 1999 to levels that are  comparable  to prices in the first
quarter of fiscal 1998 and have remained at such levels.

Restaurant operating expenses - payroll and other benefits increased to 28.0% of
restaurant  sales for the first  sixteen weeks of fiscal 1999 from 27.1% for the
first  sixteen  weeks of fiscal  1998.  The increase was due to the strong labor
market and resulting pressures on wages and salaries.  The additional wage costs
also  resulted in  increases in amounts paid for payroll  taxes.  The  Company's
health  insurance  costs  rose  due to  increased  premiums,  as well as  higher
employee  participation  in the  Company's  health  insurance  plan.  Restaurant
operating  expenses  -  occupancy  and  other  expenses  increased  to  31.8% of
restaurant  sales for the  sixteen  weeks  ended  April 25,  1999 from  30.5% of
restaurant  sales for the sixteen  weeks ended April 19, 1998.  This increase is
attributable principally to rent and other occupancy related costs increasing at
a higher rate than sales.

Depreciation and amortization  expense  remained  approximately  the same in the
first sixteen weeks of 1999 as in the comparable period in 1998.


                                     Pg. 14
<PAGE>

General and administrative expenses were $6,791,000,  or 6.5% of total revenues,
for the first sixteen weeks of fiscal 1999,  compared to $5,964,000,  or 5.9% of
total  revenues,  for the  comparable  period in fiscal  1998.  The increase was
primarily  due  to  higher   payroll  costs  and  costs   associated   with  the
administration   of   additional   Company-owned   restaurants.    General   and
administrative  expenses  for the  balance  of 1999  may be  affected  by  costs
associated with the proposed merger of the Company with a company to be owned by
certain  members of the Sbarro  family,  which  costs  would be  expensed if the
merger  is not  consummated.  (See  Note 2 of  Notes to  Unaudited  Consolidated
Financial Statements included elsewhere herein).

Other income  increased  by $497,000 to  $1,197,000  in the sixteen  weeks ended
April 25, 1999 as compared to the sixteen weeks ended April 19, 1998,  primarily
as a result of increased incentives from suppliers.

The  effective  income tax rate was 38.0% for both the sixteen weeks ended April
25, 1999 and April 19, 1998.

The  cumulative  effect of the change in method of accounting  resulted from the
Company's  implementation  of  the  Statement  of  Position  98-5  (SOP)  of the
Accounting  Standards Executive Committee of the American Institute of Certified
Public Accountants which required companies that had capitalized pre-opening and
similar costs to write off all such  existing  costs,  net of tax benefit,  as a
"cumulative  effect of  accounting  change"  and to  expense  all such  costs as
incurred in the future. In accordance with its early application provisions, the
Company  implemented  the SOP as of the  beginning  of its 1998  fiscal year and
incurred a one-time  charge of  $822,000,  ($.04 basic and diluted  earnings per
share),  net of an income tax  benefit of  $504,000,  to write off all  start-up
costs existing as of the beginning of that year.


Liquidity and Capital Resources

During  the  first  sixteen  weeks of  1999,  operating  activities  contributed
$3,073,000 to cash flows.  This consisted  primarily of net income of $6,912,000
and non-cash  depreciation  and  amortization  of  $6,967,000  partially  offset
principally  by  increases  in prepaid  expenses  of  $2,577,000,  a decrease of
$3,852,000  in accounts  payable and accrued  expenses  from their peak year end
balances  and a  decrease  in income  taxes  payable of  $4,109,000.  During the
sixteen  weeks  ended  April  25,  1999,  the  Company  expended   approximately
$7,520,000 in investing activities for the acquisition of property and equipment
related  primarily  to the opening of seven  Company-owned  restaurants  and the
Company's  share of  construction  costs related to  consolidated  joint venture
operations.  Financing activities generated $47,000 from the receipt of proceeds
from the exercise of stock options.  At April 25, 1999, the Company had cash and
cash  equivalents  of  approximately  $146,072,000  and its working  capital was
approximately $127,475,000.  The Company believes, based on current projections,
that its liquid assets  presently on hand,  together  with funds  expected to be
generated from operations,  should be sufficient for its presently  contemplated
operations  and the  investment  in property  and  equipment  for the opening of
additional restaurant locations and remodeling of existing restaurants.

                                     Pg. 15

<PAGE>

Dividends

The Company's  Board of Directors has suspended  quarterly cash dividends  since
the last quarter of 1997  pending  consideration  of  proposals  made by certain
members of the Sbarro  family to merge the Company with a company  owned by them
in which all of the shares of the Company  not owned by them would be  exchanged
for cash and the  consideration of other strategic  alternatives.  The proposals
were, and the merger agreement  entered into with respect to the proposed merger
agreement is,  conditioned upon, among other things, the suspension of dividends
by the Company.

Year 2000

"Year  2000"  issues  could  arise in  situations  where  computer  software  or
databases  recognize  the two digit year "00" as the year 1900  rather  than the
year 2000.  This could result in system failures or  miscalculations  that could
cause  disruptions in business  operations and increased costs in processing and
analyzing data. Since the Company's information  technology ("IT") systems (used
primarily  for  financial,  accounting,  human  resources,  payroll,  operations
support  and  point-of-sales   processing  and  reporting)  and  non-information
technology  ("non-IT") systems (used principally in communications  systems) use
computer hardware,  software and related technology, the Company has conducted a
comprehensive review of its computer systems.

State of Readiness.  The Company has  determined  that,  while certain  computer
programs  require  change to assure  that they are Year 2000  compliant,  all of
their  databases  are Year 2000  compliant  in that they contain four digit year
fields,  thereby allowing  positive  identification of the century and year. The
Company's  internal  IT  systems  utilize a  combination  of  in-house  software
developed by the Company's IT department  and packaged  software  purchased from
third parties.

During the past five years, as part of its ongoing IT enhancements,  the Company
has either  significantly  updated  software or designed  new  software  for its
point-of-sales  system (which  performs cash register and restaurant  management
functions) and for its restaurant  accounting system (which handles  centralized
bookkeeping,   sales  analysis  and  cash  control  functions  relating  to  its
Company-owned  restaurants).  The Company's  point-of-sales  system is currently
installed in  approximately  300 restaurant  units. The balance of the Company's
existing restaurants use electronic cash registers.  The Company has been orally
advised by the  manufacturers  of its electronic cash registers that they expect
no Year 2000  issues  with  respect to these  registers.  The  Company is in the
process of replacing the personal  computers that were part of the approximately
115 point-of-sales systems installed in 1995 and early 1996. The Company is also
in the process of updating  and  modifying  its  software  programs  for all 300
restaurants in order to handle Year 2000 issues.  Neither of these  processes is
believed  to be  complex  and both are  expected  to be  completed,  tested  and
implemented  during the summer of 1999. The Company is continuing to install its
point-of-sales system in each new unit, in each existing restaurant as remodeled
and to replace existing registers as needed.

The Company  uses  software  developed  by a  recognized  third  party  software
provider  for  various  corporate  office  functions,  including  financial  and
accounting reporting and analysis, human

                                     Pg. 16

<PAGE>

resource and payroll  processing,  inventory  purchasing  and  accounts  payable
functions. The Company has reviewed and determined the remediation needed to the
third party  software,  has made the changes  needed and recompiled all programs
within the packaged  software.  The Company has recently  commenced  testing the
remediated  system.  The  remediation  process  with  respect to its third party
software is also expected to be completed during the summer of 1999.

Thereafter,  any  corrections or changes (which are currently not anticipated to
be  significant)  to  programs or systems  that are  required as a result of the
testing of its internal  software and third party  software  will be  addressed.
Final testing is currently anticipated to be completed, and the updated software
installed, by the end of November 1999.

Non-IT systems are used by the Company primarily for voice  communications.  The
Company has received written assurances from its communications systems provider
that the Company's communications systems and equipment are Year 2000 compliant.
The  Company  has not as yet  received  confirmation  that its  voice  messaging
system,  which  utilizes a  recognized  provider,  is Year 2000  compliant.  The
Company does not believe that interruption of this service would have a material
adverse affect on its operations.

The Company has been orally  advised by its  principal  food  distributor  that,
while it could  operate  under its former  manual  systems,  it expects that its
computer  systems will be Year 2000  compliant on a timely basis.  The Company's
principal  soft  drink  mix  supplier  has  publicly  reported  that it  expects
remediation  and testing of its key IT systems to be 98% completed by the end of
the second quarter of 1999 and compliant by the fourth quarter of 1999.

Costs. To date, all software  modification and testing has been performed by the
Company's internal IT department without the need to employ additional staff and
without  significant  interruption  of  the  other  functions  performed  by the
department.   The  Company  believes  it  will  complete  this  project  without
additional  staff and without  adversely  affecting  day-to-day  operations  and
support,  although some overtime for personnel  outside the IT department  staff
may be required during the testing phase of the remediated systems.

To date,  the Company has  expended  less than  $30,000 (in addition to hardware
purchased in the ordinary  course,  which  purchases  were not  accelerated as a
result of the Year 2000 issue) and  anticipates  spending less than $150,000 for
testing,  purchasing  hardware  and for other  modification  costs to finish the
project.  The  Company  does not  separately  track  internal  costs  (which are
principally payroll and related costs of its IT systems department)  incurred as
part of its Year 2000 project.

Risks.  Although the Company  believes its systems will be timely compliant with
Year 2000 issues,  the most  reasonably  likely worst case scenarios  facing the
Company in the event Year 2000 problems  arise  involve:  (i) the  timeliness of
internal  reporting and  analyzing  corporate  information  and the potential of
temporarily  supplementing  its staff if the Company is required to rely,  for a
period of time, on manual information reporting and processing while remediation
to one or more of its internal IT systems is effectuated; (ii) the processing of
payroll;  and (iii) its ability to maintain its  traditional  levels of revenues
should it experience temporary supply

                                     Pg. 17

<PAGE>

shortages  of food,  soft drink  mixes and paper  products  if its  distributors
experience  IT or non-IT  Year 2000  problems  or should  the  landlords  of the
Company's  restaurants  experience  non-IT issues (such as with  microprocessors
that control door  operators,  elevator  and  escalator  service and heating and
cooling equipment that the landlords are required to maintain under their leases
with the Company).  The Company,  like most other companies,  is also subject to
certain  risks that are not within its control,  such as a failure of IT systems
of banks, financial institutions, telephone companies and public utilities.

Contingency Plans. In the event the Company's IT systems should malfunction, the
Company  believes  it will  nevertheless  be able to  generate  revenues  at its
existing  restaurants and process data,  although delays may result in reporting
and processing  information.  The Company's  electronic  cash registers  operate
manually and its point-of-sales  cash registers can also operate  independent of
the IT system.  The Company still utilizes  manual systems both for reporting to
its  corporate  office  by  restaurants  that are not yet on its  point-of-sales
system  and as a  backup  for  units  that  are on  the  point-of-sales  system.
Depending  upon the results of testing of its efforts to remediate  its software
during the summer of 1999, the Company intends to develop contingency plans with
respect to the internal  reporting of  corporate  information  in the event of a
failure of its IT systems.

With respect to its payroll functions,  the Company has recently comprehensively
analyzed  and  worked  with  an  outside  payroll   processing   service  before
determining  to continue to perform all payroll  functions  through its internal
systems.  Therefore,  the Company  believes that it could either  outsource this
function,  or have an outsourcer of payroll  services  install its system at the
Company  with the Company  operating  the system  internally,  without  material
delay.

The Company  intends to maintain a higher  inventory  level of food products and
soft drink  mixes and paper  products  toward  the end of 1999 as a  contingency
against shortages in the event its suppliers experience  unanticipated Year 2000
problems.  The levels to be  maintained  will be based upon future  consultation
with its suppliers to obtain updates on the status of their Year 2000 compliance
programs.  The  Company  believes  that  there  are other  distributors  of food
products,  beverages  and  paper  products  that  would be able to  service  the
Company's needs in the event its primary suppliers experience Year 2000 problems
that adversely  affect their ability to provide the Company with the quantity of
supplies needed.

The Company intends to develop additional contingency plans if and to the extent
additional significant risks become evident based on the testing of its internal
systems and future  discussions  with its  suppliers,  landlords and other third
party providers of goods and services.

Forward Looking Statement

Certain statements contained in this Report are forward-looking statements which
are subject to a number of known and unknown risks and uncertainties  that could
cause the Company's  actual results and  performance to differ  materially  from
those described or implied in the  forward-looking  statements.  These risks and
uncertainties,  many of which are not within the Company's control, include, but
are not limited to, general economic, weather and business conditions; the

                                     Pg. 18

<PAGE>

availability of suitable restaurant sites in appropriate regional shopping malls
and other  locations on  reasonable  rental terms;  changes in consumer  tastes;
changes in population and traffic patterns; the Company's ability to continue to
attract franchisees; the success of the Company's present, and any future, joint
ventures  and  other   expansion   opportunities;   the   availability  of  food
(particularly  cheese and tomatoes) and paper products at reasonable  prices; no
material  increase  occurring in the Federal  minimum  wage;  and the  Company's
ability to attract  competent  restaurant  and executive  managerial  personnel;
government  regulations;  and the Company's  ability to successfully  and timely
complete compliance of its information systems for the Year 2000 and the ability
of certain of its suppliers and landlords to be timely Year 2000 compliant.



Item 3.           Qualitative and Quantitative Disclosures of Market Risk

         The  Company's  cash  equivalents  are  invested in short  term,  fixed
interest,  highly  rated and  highly  liquid  instruments  which  mature and are
reinvested  throughout  the year.  Therefore,  although the  Company's  existing
investments are not considered at risk with respect to changes in interest rates
or  markets  for  these  instruments,  the  Company's  yield  return  on  future
short-term investments could be affected at the time of reinvestment as a result
of intervening  events.  The Company  presently has no borrowings,  and does not
purchase  interest rate swap or other instruments to hedge against interest rate
fluctuations.

         The  Company  does  not  purchase  future,  forward,  option  or  other
instruments to hedge against  fluctuations  in the prices of the  commodities it
purchases.

         All transactions  with foreign  franchisees are denominated in, and all
payments are made in, United  States  dollars,  reducing the risks  attendant in
changes in the values of foreign currencies.  Accordingly,  the Company does not
purchase future contracts, options or other instruments to hedge against changes
in values of foreign currencies.

















                                     Pg. 19

<PAGE>

                           PART II. OTHER INFORMATION


Item 1.           Legal Proceedings

As previously  reported,  following the Company's  announcement  on November 25,
1998 of a proposed  merger of a company  owned by members of the Sbarro  family,
the  Company's  principal  shareholders,  with and into the Company in which all
outstanding  Common Stock of the Company not owned by those  shareholders are to
be converted  into the right to receive cash,  seven class action  lawsuits were
instituted  by  shareholders  against the Company,  those  members of the Sbarro
family who are  directors of the Company and all or some of the other  directors
of the Company.  The proposed class consists of all record and beneficial owners
of the  Company's  Common  Stock during the period  beginning  with the close of
business on November  25,  1998 and ending on the  effective  date of the merger
(the "Class"). The lawsuits were instituted in the Supreme Court of the State of
New York,  New York County and Suffolk  County.  The lawsuits in Suffolk  County
were  discontinued and  subsequently  refilled as one lawsuit in New York County
(with one additional  plaintiff) in anticipation of  consolidating  all lawsuits
into one lawsuit. While the complaints in each of the lawsuits vary, in general,
they allege that the directors breached fiduciary duties, that the then proposed
price of $27.50 to be paid to  shareholders  other  than  those  members  of the
Sbarro  family  was  inadequate  and  that  there  were  inadequate   procedural
protections for public  shareholders.  Although  varying,  the complaints  seek,
generally, a declaration of a breach of, or an order requiring the defendants to
carry out,  their  fiduciary  duties to the  plaintiffs,  damages in unspecified
amounts  alleged  to be  caused  to  the  plaintiffs,  other  relief  (including
injunctive  relief or  rescission or rescissory  damages if the  transaction  is
consummated), and costs and disbursements,  including a reasonable allowance for
counsel fees and expenses.

On January 19, 1999,  counsel for all of the  plaintiffs  and counsel for all of
the defendants  entered into a Memorandum of Understanding  pursuant to which an
agreement  in principle to settle all of the lawsuits was reached and the Sbarro
family  agreed to an increase in the merger  consideration  to $28.85 per share.
The Memorandum of Understanding  states that plaintiffs' counsel intend to apply
to the Court for an award of attorneys' fees and  disbursements  in an amount of
no more than $2.1 million to be paid by the Company,  which the defendants  have
agreed not to oppose.  The defendants are also  responsible for providing notice
of the  settlement  to all class  members.  The  settlement  would result in the
complete  discharge  and bar of all claims  against,  past,  present  and future
officers and  directors of the Company,  and others  associated  with the Merger
with respect to matters and issues of any kind that have been or could have been
asserted in these  lawsuits.  The  settlement is subject to, among other things,
court  approval  of the  settlement  and  consummation  of the  Merger.  It is a
condition to Mergeco's obligations under the Merger Agreement that holders of no
more  than  1,000,000  shares  of  Common  Stock  request   exclusion  from  the
settlement.  On April 7, 1999,  a  Stipulation  of  Settlement  was entered into
embodying the terms of the Memorandum of Understanding (the "Stipulation").

On May 11,  1999,  the Court  issued a  Scheduling  Order,  pursuant  to which a
hearing has been scheduled to be held on June 29, 1999, to determine (a) whether
the Court should approve the

                                     Pg. 20

<PAGE>

settlement as fair, reasonable,  adequate and in the best interest of the Class;
(b)  determine  whether  the  Stipulation  and the terms and  conditions  of the
settlement  should be finally  approved by the Court;  (c) determine  whether an
Order and Final Judgment  should be entered by the Court  dismissing the actions
as to all defendants  with prejudice and on the merits as against the plaintiffs
and all members of the Class except those  persons who submit a valid and timely
request  for  exclusion  from the  Class,  and  extinguish,  release  and enjoin
prosecution  of any and all settled  claims;  (d) hear and determine  such other
matters as the Court may deem necessary; and (e) in the event the Court approves
the  settlement  and  enters  the Order  and  Final  Judgment,  to  consider  an
application  by  counsel  to the  Class  for an  award  of  attorneys'  fees and
expenses.  The Court has reserved the right to adjourn the  settlement  hearing,
including  consideration  of the  application  for attorneys' fees and expenses,
without further notice other than by oral announcement at the settlement hearing
or any adjournment thereof. The Court also has reserved the right to approve the
settlement at or after the settlement  hearing with such modifications as may be
consented to by the parties to the Stipulation and without further notice to the
Class.


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

(a)      Exhibits:
         No.               Description

         27                Financial Data Schedule



(b)      Reports on Form 8-K.

The only  Current  Report on Form 8-K filed by the  Company  during  the  period
covered by this  report was a report  dated (date of  earliest  event  reported)
January 19, 1999  reporting  under Item 5, Other Events,  and Item 7,  Financial
Statements,   Pro  Forma  Financial   Information  and  Exhibits.  No  financial
statements were filed with this report.















                                     Pg. 21

<PAGE>



                                    SIGNATURE


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



                                                     SBARRO, INC.
                                                     Registrant


Date:             June  8, 1999             By:      /s/  MARIO SBARRO
         ---------------------------                 ---------------------------
                                                     Mario Sbarro
                                                     Chairman of the Board and
                                                     President


Date:             June  8, 1999             By:      /s/  ROBERT S. KOEBELE
         ---------------------------                 ---------------------------
                                                     Robert S. Koebele
                                                     Vice President-Finance





















                                     Pg. 22


<PAGE>





                                  EXHIBIT INDEX



Exhibit Number                      Description

      27                     Financial Data Schedule











<PAGE>




                                   EXHIBIT 27