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


                       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 24, 2005            Commission file number 333-90817


                                  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                             11747-4714
    (Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code:               (631) 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  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes                        No       X
    --------------           ---------------

The number of shares of Common Stock of the registrant outstanding as of June 4,
2005 was 7,064,328.

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

*This form 10-Q is voluntarily  submitted pursuant to a requirement contained in
the indenture governing Sbarro, Inc.'s Senior Notes due 2009.


<PAGE>

                                   SBARRO, INC

                                 FORM 10-Q INDEX
                                 ---------------


PART I.      FINANCIAL INFORMATION                                         PAGES


Consolidated Financial Statements:

   Balance Sheets - April 24, 2005 (unaudited) and January 2, 2005...........3-4

   Statements of Operations (unaudited) - Sixteen Weeks ended
       April 24, 2005 and April 18, 2004.......................................5

   Statements of Cash Flows (unaudited) - Sixteen Weeks ended
       April 24, 2005 and April 18, 2004.....................................6-7

   Notes to Unaudited Consolidated Financial Statements.....................8-22

Management's Discussion and Analysis of Financial Condition
       and Results of Operations...........................................23-31

Qualitative and Quantitative Disclosures of Market Risk.......................32

Controls and Procedures....................................................32-33

PART II.     OTHER INFORMATION................................................34






                                     Page 2
<PAGE>


Part I - Financial Information

Item 1.  Consolidated Financial Statements


                                          SBARRO, INC. AND SUBSIDIARIES
                                           CONSOLIDATED BALANCE SHEETS
                                                      ASSETS

<TABLE>
<CAPTION>

                                                                                      (In thousands)
                                                                       April 24, 2005            January 2, 2005
                                                                       --------------            ---------------
                                                                         (unaudited)
<S>                                                                      <C>                       <C>
Current assets:

     Cash and cash equivalents                                           $ 51,043                  $ 63,000
     Receivables, net of allowance for doubtful
        accounts of $431 at April 24, 2005 and
        January 2, 2005:
           Franchise                                                        1,971                     1,846
           Other                                                            1,606                     1,680
                                                                         --------                  --------
                                                                            3,577                     3,526

      Inventories                                                           2,368                     2,809
      Prepaid expenses                                                      4,134                     3,877

     Current portion of loans receivable from
          shareholders and officers                                            --                        46
                                                                         --------                  --------
          Total current assets                                             61,122                    73,258

Property and equipment, net                                                83,962                    88,465
Trademarks                                                                195,916                   195,916
Goodwill                                                                    9,204                     9,204
Deferred financing costs, net                                               4,225                     4,521
Loans receivable from shareholders and officers,
      less current portion                                                  5,607                     5,602
Other assets                                                                8,266                     7,647
                                                                         --------                  --------
                                                                         $368,302                  $384,613
                                                                         ========                  ========


                            See notes to unaudited consolidated financial statements.
</TABLE>


                                                     Page 3
<PAGE>


                                          SBARRO, INC. AND SUBSIDIARIES
                                           CONSOLIDATED BALANCE SHEETS
                                                   (CONTINUED)

                                        LIABILITIES & SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                            (In thousands except share data)
                                                                       April 24, 2005            January 2, 2005
                                                                       --------------            ---------------
                                                                         (unaudited)
<S>                                                                      <C>                       <C>
Current liabilities:
     Accounts payable                                                    $  8,033                  $ 11,593
     Accrued expenses                                                      19,108                    20,748
     Accrued interest payable                                               2,787                     8,181
     Current portion of mortgage payable                                      188                       182
                                                                         --------                  --------
             Total current liabilities                                     30,116                    40,704

Deferred rent                                                              10,192                    10,226

Long-term debt, net of original issue
     discount                                                             268,401                   268,349

Commitments and Contingencies

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
          7,064,328 shares                                                     71                        71
     Additional paid-in capital                                                10                        10
     Retained earnings                                                     59,512                    65,253
                                                                         --------                  --------
     Total shareholders' equity                                            59,593                    65,334
                                                                         --------                  --------
                                                                         $368,302                  $384,613
                                                                         ========                  ========


                            See notes to unaudited consolidated financial statements.
</TABLE>



                                                     Page 4
<PAGE>

                                          SBARRO, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                             For the sixteen weeks ended
                                                                                    (In thousands)
                                                                       April 24, 2005            April 18, 2004
                                                                       --------------            --------------
<S>                                                                       <C>                       <C>
Revenues:
     Restaurant sales                                                     $ 91,255                  $ 90,846
     Franchise related income                                                3,544                     3,404
     Real estate and other                                                   1,718                     1,961
                                                                          --------                  ---------
            Total revenues                                                  96,517                    96,211
                                                                          --------                  ---------

Costs and expenses:
     Cost of food and paper products                                        19,030                    20,009
     Payroll and other employee benefits                                    25,581                    26,147
     Other operating costs                                                  35,141                    33,807
     Depreciation and amortization                                           4,973                     4,984
     General and administrative costs                                        8,066                     8,126
     Asset impairment and restaurant closings                                  102                       175
                                                                          --------                  ---------
         Total costs and expenses                                           92,893                    93,248
                                                                          --------                  ---------

Operating income                                                             3,624                     2,963
                                                                          --------                  ---------

Other (expense) income:
      Interest expense                                                      (9,473)                   (9,477)
      Interest income                                                          365                       196
      Equity in net income of unconsolidated affiliates                         20                       398
                                                                          --------                  ---------
         Net other expense                                                  (9,088)                   (8,883)
                                                                          --------                  ---------
Loss before income taxes                                                    (5,464)                   (5,920)
Income taxes                                                                   277                       241
                                                                          --------                  ---------
Net loss                                                                  $ (5,741)                 $ (6,161)
                                                                          ========                  =========


                            See notes to unaudited consolidated financial statements.
</TABLE>


                                                     Page 5
<PAGE>

                                          SBARRO, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                For the sixteen weeks ended
                                                                                     (In thousands)

                                                                             April 24, 2005        April 18, 2004
                                                                             --------------        --------------
<S>                                                                             <C>                  <C>
Operating activities:
Net loss                                                                        $ (5,741)            $ (6,161)
Adjustments to reconcile net loss to net cash used in operating
      activities:
      Depreciation and amortization                                                4,973                5,421
      Amortization of senior notes discount                                          117                  117
      Amortization of deferred financing costs                                       296                  296
      Asset impairment and restaurant closings                                       102                  175
      Increase in deferred rent, net                                                  33                   93
      Equity in net income of unconsolidated affiliates                              (20)                (398)
      Dividends received from unconsolidated affiliate                                --                  305

Changes in operating assets and liabilities:
      (Increase) decrease in receivables                                             (51)                 228
      (Increase) decrease in inventories                                             441                  (95)
       Increase in prepaid expenses                                                 (257)              (2,703)
      (Increase) decrease in other assets                                            (67)                  48
      Decrease in accounts payable and accrued expenses                           (5,324)              (4,962)
      Decrease in accrued interest payable                                        (5,394)              (5,394)
                                                                                ---------            ---------

Net cash used in operating activities                                            (10,892)             (13,030)
                                                                                ---------            ---------
</TABLE>


                                   (Continued)



                                                     Page 6
<PAGE>

                                          SBARRO, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                  For the sixteen weeks ended
                                                                                         (In thousands)

                                                                             April 24, 2005        April 18, 2004
                                                                             --------------        --------------
<S>                                                                             <C>                  <C>
Investing activities:

Purchases of property and equipment                                             $ (1,347)            $ (2,324)
Proceeds from sale of joint venture property and equipment                           300                   --
                                                                                ---------            ---------
Net cash used in investing activities                                             (1,047)              (2,324)
                                                                                ---------            ---------

Financing activities:

Mortgage principal repayments                                                        (59)                 (54)
Tax distributions                                                                     --                 (682)
Reduction in loans receivable from officers                                           41                  503
                                                                                ---------            ---------

         Net cash used in financing activities                                       (18)                (233)
                                                                                ---------            ---------

Decrease in cash and cash equivalents                                            (11,957)             (15,587)

Cash and cash equivalents at beginning of period                                  63,000               56,409
                                                                                ---------            ---------

Cash and cash equivalents at end of period                                      $ 51,043             $ 40,822
                                                                                =========            =========

Supplemental disclosure of cash flow
     information:

Cash paid for:
     Income taxes                                                               $     90             $    204
                                                                                =========            =========
     Interest                                                                   $ 14,503             $ 14,458
                                                                                =========            =========



                            See notes to unaudited consolidated financial statements.
</TABLE>



                                                     Page 7
<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
         our  management,   all  adjustments  (consisting  of  normal  recurring
         adjustments and accruals)  considered necessary for a fair presentation
         of the consolidated  financial  position of Sbarro and our subsidiaries
         at April 24, 2005 and our  consolidated  results of operations and cash
         flows for the  sixteen  weeks  ended  April 24, 2005 and April 18, 2004
         have been included.  The results of operations for 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 our Annual Report
         on Form 10-K for the year ended January 2, 2005.

         Certain  items  in  the  financial   statements   presented  have  been
         reclassified to conform to the 2005 presentation.

2.       Recent accounting pronouncements:

         In May 2005, the Financial  Accounting  Standards Board ("FASB") issued
         Statement  of   Financial   Accounting   Standards   ("SFAS")  No.  154
         "Accounting Changes and Error Corrections" a replacement of APB Opinion
         No.  20  and  FASB  Statement  No.  3.  This   statement   changes  the
         requirements for the accounting and reporting of a change in accounting
         principle   and  applies  to  all   voluntary   changes  in  accounting
         principles.  It also  applies  to  changes  required  by an  accounting
         pronouncement  in the usual  instance that the  pronouncement  does not
         include  specific  transition   provisions.   This  statement  requires
         retrospective  application  to prior periods'  financial  statements of
         changes  in  accounting  principle,   unless  it  is  impracticable  to
         determine either the  period-specific  effects or the cumulative effect
         of  the   change.   When  it  is   impracticable   to   determine   the
         period-specific  effects  of  an  accounting  change  on  one  or  more
         individual prior periods  presented,  this Statement  requires that the
         new  accounting  principle  be  applied to the  balances  of assets and
         liabilities  as of the  beginning  of the  earliest  period  for  which
         retrospective  application  is  practicable  and  that a  corresponding
         adjustment be made to the opening balance of retained earnings for that
         period rather than being  reported in an income  statement.  When it is
         impracticable  to determine the cumulative  effect of applying a change
         in accounting  principle to all prior periods,  this Statement requires
         that the new  accounting  principle  be applied  as if it were  adopted
         prospectively from the earliest date practicable.  We do not anticipate
         that SFAS No. 154 will have a material impact on our financial position
         or results of  operations.  SFAS No. 154 is effective  for fiscal years
         beginning after December 15, 2005.



                                     Page 8
<PAGE>


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


3.       Debt:

         Senior Notes:

         The $255 million of 11% senior  notes issued in 1999 are due  September
         15, 2009.  Interest is payable  semi-annually on March 15 and September
         15 of each year.  Our payment  obligations  under the senior  notes are
         jointly,  severally,  unconditionally and irrevocably guaranteed by all
         of  Sbarro's  current  Restricted   Subsidiaries  (as  defined  in  the
         indenture) and is to be similarly  guaranteed by our future  Restricted
         Subsidiaries. The senior notes and the subsidiary guarantees are senior
         unsecured  obligations  of Sbarro  and the  guaranteeing  subsidiaries,
         respectively,  ranking  equally  in right of  payment to all of our and
         their  respective  present and future  senior debt,  including  amounts
         outstanding  under the bank line of credit  agreement  discussed below.
         The indenture  permits  redemption of the senior notes at our option at
         varying  redemption  prices and requires us to offer to purchase senior
         notes in the  event of a  Change  of  Control  and in  connection  with
         certain Asset Sales (each as defined).

         The indenture  contains,  various  covenants  that limit our ability to
         borrow  funds,  other  than  certain  permitted  indebtedness,  to make
         "restricted payments" including, among other things, dividend payments,
         and  to  make   investments   in,  among  other  things,   unrestricted
         subsidiaries.  The  indenture  for the senior notes  permits us to make
         distributions  to  shareholders  pursuant  to a tax  payment  agreement
         between  us and  our  shareholders  that  contains  a  formula  that is
         designed to approximate the income taxes,  including  estimated  taxes,
         that would be payable by our  shareholders  if their only  income  were
         their  pro-rata  share of our taxable income and such income were taxed
         at the highest  applicable  federal and New York State marginal  income
         tax rates.

         Among other covenants,  the indenture requires that, in order for us to
         borrow,  our  consolidated  interest  ratio coverage (as defined in the
         indenture),  after  giving pro forma  effect to the interest on the new
         borrowing,  for the four most recently ended fiscal quarters must be at
         least 2.5 to 1. As of April  24,  2005,  that  ratio was 1.4 to 1. As a
         result,  we are not  presently  able to  borrow  funds  except  for the
         specifically  permitted  indebtedness,  including  up to $75 million of
         revolving credit loans.

         In order to make restricted  payments,  that ratio must be at least 2.0
         to 1, after giving pro forma effect to the  restricted  payment and, in
         any event, is limited in dollar amount pursuant to a formula  contained
         in the  indenture.  We refer to the amount that is available  for us to
         make dividends and other restricted payments as the "restricted payment
         availability."   We  cannot  make   restricted   payments  (other  than
         distributions  pursuant to the tax payment agreement) until we increase
         the restricted payment availability by approximately $33.4 million, and
         then only to the extent of any excess over that amount.


                                     Page 9
<PAGE>


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


         Line of Credit:

         In March 2004, we obtained an uncommitted line of credit to replace our
         former  revolving  credit  facility.  Under  the  line  of  credit,  we
         currently have the ability,  subject to bank approval,  to borrow up to
         $3 million, including outstanding letters of credit. The line of credit
         contains  no  financial   covenants  or  unused  line  fees.   Interest
         applicable to the loans under the line of credit is at the bank's prime
         rate at the time of any  borrowings.  The line,  which was to expire in
         May 2005, has been extended to July 15, 2005.  There currently are $1.8
         million of letters of credit  outstanding.  The Company is finalizing a
         new line of credit to replace the existing credit line. The new line is
         expected  to be in place  during the second  quarter of 2005.  While we
         expect to have this new line in place,  there can be no assurances that
         we will complete the  negotiations  to finalize an agreement or further
         extend our existing line.

         Mortgage:

         In March 2000,  one of our  subsidiaries  obtained a $16 million,  8.4%
         loan due in 2010,  secured by a mortgage on our corporate  headquarters
         building.  The loan is payable in monthly installments of principal and
         interest of $0.1 million. The outstanding principal balance of the loan
         as of April 24, 2005 was $15.3 million. The mortgage agreement contains
         various covenants, including a requirement that the subsidiary maintain
         a minimum  ratio of EBITDA to annual  debt  service  of at least 1.2 to
         1.0.

         We were in  compliance  with all  covenants  in the  indenture  for the
         senior notes and our mortgage as of April 24, 2005.



                                    Page 10
<PAGE>


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


4.       Litigation

         In  December  1999,  fourteen  current and former  general  managers of
         Sbarro  restaurants in California  amended a complaint against us filed
         in the Superior Court of California  for Orange  County.  The complaint
         alleges  that the  plaintiffs  were  improperly  classified  as  exempt
         employees  under the  California  wage and hour law. The plaintiffs are
         seeking  actual  damages,  punitive  damages and costs of the  lawsuit,
         including  reasonable  attorneys'  fees,  each in unspecified  amounts.
         Plaintiffs filed a motion to certify the lawsuit as a class action, but
         the  motion  was  denied by the  court.  The  court  issued a ruling in
         December 2003 which was unfavorable to us but did not set the amount of
         damages. We are appealing the ruling due to errors that we believe were
         made by the trial judge.

         In September 2000,  eight other current and former general  managers of
         Sbarro  restaurants in California  filed a complaint  against us in the
         Superior  Court of  California  for  Orange  County  alleging  that the
         plaintiffs  were  improperly   classified  as  exempt  employees  under
         California  wage  and hour  law.  The  plaintiffs  are  seeking  actual
         damages,   punitive  damages  and  costs  of  the  lawsuit,   including
         reasonable attorneys' fees, each in unspecified amounts. Plaintiffs are
         represented by the same counsel who is  representing  the plaintiffs in
         the case  discussed  in the  preceding  paragraph.  We have  separately
         settled with two of the managers for immaterial amounts.  The remaining
         parties to this case have agreed that it will be settled  upon the same
         terms and  conditions  that the court  orders  in  connection  with its
         decision in the case discussed in the preceding paragraph.

         In May 2002, the landlord of a joint venture restaurant location closed
         during  2002 filed a complaint  against us in the Supreme  Court of New
         York for  Westchester  County  alleging  that we were  obligated to it,
         pursuant to a Guaranty  Agreement we executed,  for all rent during the
         remaining  lease based on an alleged breach of the lease by the tenant,
         a subsidiary of the Company. We believed that our guarantee was limited
         in amount while the landlord  alleged  that the  guarantee  covered all
         amounts  that would  become due during the  remaining  lease term.  The
         court  issued a ruling in November  2003 which  limited our  liability,
         which we estimated at $500,000 and included in our financial statements
         in 2003. The landlord appealed this decision.  Given the uncertainty of
         the  results  of an appeal and  liability  we would have by reason of a
         reversal,  we settled the matter for  $800,000 in the first  quarter of
         2005.



                                    Page 11
<PAGE>


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


5.       Guarantor and non-guarantor financial statements:

         Certain  subsidiaries  have guaranteed  amounts  outstanding  under our
         senior notes and line of credit. Each of the guaranteeing  subsidiaries
         is our direct or indirect  wholly owned  subsidiary  and each has fully
         and  unconditionally   guaranteed  the  senior  notes  and  the  credit
         agreement on a joint and several basis.

         The following condensed consolidating financial information presents:

         (1)      Condensed unaudited  consolidating  balance sheets as of April
                  24,  2005 and  January  2, 2005 and  unaudited  statements  of
                  operations  and cash flows for the  quarters  ended  April 24,
                  2005 and April 18, 2004 of (a) Sbarro,  Inc., the parent,  (b)
                  the guarantor  subsidiaries as a group,  (c) the  nonguarantor
                  subsidiaries  as a group  and  (d)  Sbarro  on a  consolidated
                  basis.

         (2)      Elimination entries necessary to consolidate Sbarro, Inc., the
                  parent, with the guarantor and nonguarantor subsidiaries.

         The principal  elimination entries eliminate  intercompany balances and
         transactions.  Investments  in  subsidiaries  are  accounted for by the
         parent on the cost method.



                                    Page 12
<PAGE>

<TABLE>
<CAPTION>


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


                                                 Consolidating Balance Sheet
                                                     As of April 24, 2005
                                                        (In thousands)
                                                         (Unaudited)
                                                            ASSETS

                                                               Guarantor        Nonguarantor                        Consolidated
                                                 Parent       Subsidiaries      Subsidiaries      Eliminations         Total
                                                 ------       ------------      ------------      ------------         -----
<S>                                           <C>              <C>              <C>               <C>               <C>
Current assets:
    Cash and cash equivalents                 $  46,357        $   3,565        $   1,121         $      --         $  51,043
    Receivables net of allowance for
    doubtful accounts of  $431
       Franchise                                  1,971               --               --                --             1,971
       Other                                        794              161              651                --             1,606
                                              ----------       ----------       ----------        ----------        ----------
                                                  2,765              161              651                --             3,577

    Inventories                                   1,057            1,239               72                --             2,368
    Prepaid expenses                              3,389              712               33                --             4,134
                                              ----------       ----------       ----------        ----------        ----------
        Total current assets                     53,568            5,677            1,877                --            61,122

Intercompany receivables                          2,165          444,115           (3,825)         (442,455)               --

Investment in subsidiaries                       67,570            1,944               --           (69,514)               --

Property and equipment, net                      32,026           48,837            3,099                --            83,962
Trademarks                                      195,916               --               --                --           195,916
Goodwill                                          9,204               --               --                --             9,204
Deferred financing costs, net                     4,041              184               --                --             4,225
Loans receivable from shareholders and            5,607               --               --                --             5,607
      officers

Other assets                                      6,573            1,671               22                --             8,266
                                              ----------       ----------       ----------        ----------        ----------
                                              $ 376,670        $ 502,428        $   1,173         $(511,969)        $ 368,302
                                              ==========       ==========       ==========        ==========        ==========
</TABLE>



                                                           Page 13
<PAGE>

<TABLE>
<CAPTION>

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


                                                 Consolidating Balance Sheet
                                                     As of April 24, 2005
                                               (In thousands except share data)
                                                         (Unaudited)
                                              LIABILITIES & SHAREHOLDERS EQUITY


                                                                   Guarantor       Nonguarantor                         Consolidated
                                                   Parent        Subsidiaries      Subsidiaries       Eliminations         Total
                                                   ------        ------------      ------------       ------------         -----
<S>                                              <C>               <C>               <C>                      <C>        <C>
Current liabilities:
      Accounts payable                           $   7,404         $     113         $     516         $      --         $   8,033
      Accrued expenses                              15,315             2,606             1,187                --            19,108
      Accrued interest payable                       2,787                --                --                --             2,787
      Current portion of mortgage payable               --               188                --                --               188
                                                 ----------        ----------        ----------        ----------        ----------

            Total current liabilities               25,506             2,907             1,703                --            30,116
                                                 ----------        ----------        ----------        ----------        ----------

Intercompany payables                              442,372                83                --          (442,455)               --

Deferred rent                                        9,871                --               321                --            10,192
                                                 ----------        ----------        ----------        ----------        ----------

Long-term debt, net of original issue
      discount                                     253,323            15,078                --                --           268,401
                                                 ----------        ----------        ----------        ----------        ----------

Shareholders' equity (deficit):
    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 7,064,328
      shares                                            71                --                --                --                71
Additional paid-in capital                         (65,479)          133,671             3,018           (71,200)               10
Retained earnings (deficit) (1)                   (288,994)          350,689            (3,869)            1,686            59,512
                                                 ----------        ----------        ----------        ----------        ----------
                                                  (354,402)          484,360              (851)          (69,514)           59,593
                                                 ==========        ==========        ==========        ==========        ==========
                                                 $ 376,670         $ 502,428         $   1,173         $(511,969)        $ 368,302
                                                 ==========        ==========        ==========        ==========        ==========
</TABLE>


(1) Retained earnings reflects a reclassification of our Umberto Mall
restaurants from nonguarantor subsidiaries to parent.



                                                           Page 14
<PAGE>

<TABLE>
<CAPTION>

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


                                                 Consolidating Balance Sheet
                                                    As of January 2, 2005
                                                        (In thousands)
                                                            ASSETS


                                                               Guarantor       Nonguarantor                         Consolidated
                                               Parent        Subsidiaries      Subsidiaries       Eliminations         Total
                                               ------        ------------      ------------       ------------         -----
<S>                                          <C>              <C>               <C>               <C>               <C>
Current assets:

    Cash and cash equivalents                $  57,150        $   4,680         $   1,170         $      --         $  63,000
    Receivables, net of allowance for
      doubtful accounts of $431
           Franchise                             1,846               --                --                --             1,846
           Other                                    53            1,053               574                --             1,680
                                             ----------       ----------        ----------        ----------        ----------
                                                 1,899            1,053               574                --             3,526

     Inventories                                 1,204            1,465               140                --             2,809
     Prepaid expenses                            4,020             (199)               56                --             3,877
     Current portion of loans receivable
       from shareholders and officers               46               --                --                --                46
                                             ----------       ----------        ----------        ----------        ----------
           Total current assets                 64,319            6,999             1,940                --            73,258

Intercompany receivables                           406          439,364            (1,875)         (437,895)               --

Investment in subsidiaries                      67,570            1,944                --           (69,514)               --

Property and equipment, net                     33,307           50,799             4,359                --            88,465
Trademarks, net                                195,916               --                --                --           195,916
Goodwill, net                                    9,204               --                --                --             9,204
Deferred financing costs, net                    4,326              195                --                --             4,521
Loans receivable from officers, less
    current portion                              5,602               --                --                --             5,602
Other assets                                     5,906            1,720                21                --             7,647
                                             ----------       ----------        ----------        ----------        ----------
                                             $ 386,556        $ 501,021         $   4,445         $(507,409)        $ 384,613
                                             ==========       ==========        ==========        ==========        ==========
</TABLE>






                                                           Page 15
<PAGE>

<TABLE>
<CAPTION>

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


                                                    Consolidating Balance Sheet
                                                       As of January 2, 2005
                                                 (In thousands except share data)
                                                LIABILITIES & SHAREHOLDERS' EQUITY


                                                                    Guarantor       Nonguarantor                       Consolidated
                                                      Parent       Subsidiaries     Subsidiaries      Eliminations         Total
                                                      ------       ------------     ------------      ------------         -----
<S>                                                  <C>              <C>             <C>              <C>              <C>
Current liabilities:

  Accounts payable                                   $  10,877        $     190       $     526        $      --        $  11,593
  Accrued expenses                                      16,802            2,474           1,472               --           20,748
  Accrued interest payable                               8,181               --              --               --            8,181
  Current portion of mortgage payable                       --              182              --               --              182
                                                     ----------       ----------      ----------       ----------       ----------
    Total current liabilities                           35,860            2,846           1,998               --           40,704
                                                     ----------       ----------      ----------       ----------       ----------

Intercompany payables                                  437,895               --              --         (437,895)              --
                                                     ----------       ----------      ----------       ----------       ----------

Deferred rent                                            9,811               --             415               --           10,226
                                                     ----------       ----------      ----------       ----------       ----------

Long-term debt, net of original issue discount         253,207           15,142              --               --          268,349
                                                     ----------       ----------      ----------       ----------       ----------


Shareholders' equity (deficit):
  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
   7,064,328 shares                                         71               --              --               --               71
  Additional paid-in capital                           (65,479)         133,671           3,018          (71,200)              10
  Retained earnings (deficit)                         (284,809)         349,362            (986)           1,686           65,253
                                                     ----------       ----------      ----------       ----------       ----------
                                                      (350,217)         483,033           2,032          (69,514)          65,334
                                                     ----------       ----------      ----------       ----------       ----------
                                                     $ 386,556        $ 501,021       $   4,445        $(507,409)       $ 384,613
                                                     ==========       ==========      ==========       ==========       ==========
</TABLE>




                                                           Page 16
<PAGE>

<TABLE>
<CAPTION>

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


                                               Consolidating Statement of Operations
                                            For the sixteen weeks ended April 24, 2005
                                                          (In thousands)
                                                            (Unaudited)


                                                             Guarantor         Nonguarantor                         Consolidated
                                             Parent        Subsidiaries        Subsidiaries       Eliminations         Total
                                             ------        ------------        ------------       ------------         -----
<S>                                         <C>               <C>               <C>                     <C>         <C>
Revenues:

    Restaurant sales                        $ 39,695          $ 48,362          $  3,198          $     --          $ 91,255
    Franchise related income                   3,544                --                --                --             3,544
    Real estate and other                        514             1,188                16                --             1,718
    Intercompany charges                          20                --                --               (20)               --
                                            ---------         ---------         ---------         ---------         ---------

    Total revenues                            43,773            49,550             3,214               (20)           96,517
                                            ---------         ---------         ---------         ---------         ---------

Cost and expenses:

    Cost of food and paper products            7,448            10,643               939                --            19,030
    Payroll and other employee                10,929            13,424             1,228                --            25,581
    Other operating costs                     16,082            18,083               976                --            35,141
    Depreciation and amortization              2,302             2,472               199                --             4,973
    General and administrative                 4,800             3,056               210                --             8,066
    Asset impairment and restaurant
      closings                                   102                --                --                --               102
    Intercompany charges                          --                20                --               (20)               --
                                            ---------         ---------         ---------         ---------         ---------

    Total costs and expenses                  41,663            47,698             3,552               (20)           92,893
                                            ---------         ---------         ---------         ---------         ---------

Operating income (loss)                        2,110             1,852              (338)               --             3,624

Other (expense) income:
    Interest expense                          (9,032)             (441)               --                --            (9,473)
    Interest income                              365                --                --                --               365
    Equity in net income  of
      unconsolidated affiliates                   20                --                --                --                20
                                            ---------         ---------         ---------         ---------         ---------

    Net other expense                         (8,647)             (441)               --                --            (9,088)

Income (loss) before income taxes             (6,537)            1,411              (338)               --            (5,464)

Income taxes                                     193                84                --                --               277
                                            ---------         ---------         ---------         ---------         ---------

Net income (loss)                           $ (6,730)         $  1,327          $   (338)         $     --          $ (5,741)
                                            =========         =========         =========         =========         =========
</TABLE>



                                                             Page 17
<PAGE>

<TABLE>
<CAPTION>

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


                                               Consolidating Statement of Operations
                                            For the sixteen weeks ended April 18, 2004
                                                          (In thousands)
                                                            (Unaudited)


                                                                   Guarantor       Nonguarantor                       Consolidated
                                                 Parent          Subsidiaries      Subsidiaries     Eliminations         Total
                                                 ------          ------------      ------------     ------------         -----
<S>                                             <C>               <C>               <C>                                 <C>
Revenues:

    Restaurant sales                            $ 38,982          $ 47,512          $  4,352                --          $ 90,846
    Franchise related income                       3,404                --                --                --             3,404
    Real estate and other                          1,010               951                --                --             1,961
    Intercompany charges                           2,524                --                --          $ (2,524)               --
                                                ---------         ---------         ---------         ---------         ---------
       Total revenues                             45,920            48,463             4,352            (2,524)           96,211
                                                ---------         ---------         ---------         ---------         ---------

Cost and expenses:

    Cost of food and paper products                8,037            10,790             1,182                --            20,009
    Payroll and other employee benefits           10,447            14,203             1,497                --            26,147
    Other operating costs                         15,545            17,034             1,228                --            33,807
    Depreciation and amortization                  2,144             2,562               278                --             4,984
    General and administrative                     4,298             3,776                52                --             8,126
    Asset impairment and restaurant
      closings                                       175                --                --                --               175
    Intercompany charges                              --             2,524                --            (2,524)               --
                                                ---------         ---------         ---------         ---------         ---------

   Total costs and expenses                       40,646            50,889             4,237            (2,524)           93,248
                                                ---------         ---------         ---------         ---------         ---------

Operating (loss) income                            5,274            (2,426)              115                --             2,963

Other (expense) income:

      Interest expense                            (9,032)             (445)               --                --            (9,477)
      Interest income                                196                --                --                --               196
      Equity in net income of
        unconsolidated affiliates                    398                --                --                --               398
                                                ---------         ---------         ---------         ---------         ---------

      Net other expense                           (8,438)             (445)               --                --            (8,883)
                                                ---------         ---------         ---------         ---------         ---------

Income (Loss) before income taxes
  (credit)                                        (3,164)           (2,871)              115                --            (5,920)

Income taxes (credit)                                134               112                (5)               --               241
                                                ---------         ---------         ---------         ---------         ---------

Net income (loss)                               $ (3,298)           (2,983)         $    120                --          $ (6,161)
                                                =========         =========         =========         =========         =========
</TABLE>




                                                             Page 18
<PAGE>

<TABLE>
<CAPTION>

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


                                               Consolidating Statement of Cash Flows
                                            For the sixteen weeks ended April 24, 2005
                                                          (In thousands)
                                                            (Unaudited)


                                                                     Guarantor         Nonguarantor                    Consolidated
                                                      Parent       Subsidiaries        Subsidiaries   Eliminations         Total
                                                      ------       ------------        ------------   ------------         -----
<S>                                                 <C>              <C>              <C>             <C>               <C>
Operating Activities:

Net (loss) income                                   $ (6,730)        $  1,327         $   (338)       $      --         $ (5,741)
Adjustments to reconcile net income (loss)
   to net cash, provided by (used in)
   operating activities:
  Depreciation and amortization                        2,301            2,472              200               --            4,973
  Amortization of deferred financing                     296               --               --               --              296
  Amortization of senior notes discount                  117               --               --               --              117
  Asset impairment and restaurant closings               102               --               --               --              102
  Increase (decrease) in deferred rent, net               60              (27)              --               --               33
  Equity in income of  unconsolidated
   affiliates                                            (20)              --               --               --              (20)

Changes in operating assets and liabilities:

  Decrease (increase) in receivables                    (866)             950              (78)             (57)             (51)
  Decrease in inventories                                147              226               68               --              441
  Decrease (increase) in prepaid expenses                631             (911)              23               --             (257)
  Decrease (increase) in other assets                   (103)              49               (1)             (12)             (67)
  (Decrease) increase in accounts payable
    and accrued expenses                              (5,084)              (2)            (295)              57           (5,324)
  Decrease in accrued interest
    payable                                           (5,394)              --               --               --           (5,394)
                                                    ---------        ---------        ---------        ---------        ---------

Net cash provided by (used in)
operating activities                                 (14,543)           4,084             (421)             (12)         (10,892)
                                                    ---------        ---------        ---------        ---------        ---------
</TABLE>







                                                             Page 19
<PAGE>

<TABLE>
<CAPTION>

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


                                               Consolidating Statement of Cash Flows
                                            For the sixteen weeks ended April 24, 2005
                                                          (In thousands)
                                                            (Unaudited)


                                                               Guarantor      Nonguarantor                       Consolidated
                                                 Parent       Subsidiaries    Subsidiaries      Eliminations         Total
                                                 ------       ------------    ------------      ------------         -----
<S>                                           <C>              <C>              <C>                    <C>        <C>
Investing activities:
---------------------
Purchases of property and equipment               (619)            (635)             (93)              --           (1,347)
Proceeds from sale of joint venture
  property and equipment                           300               --               --               --              300
                                              ---------        ---------        ---------        ---------        ---------

Net cash used in investing activities             (319)            (635)             (93)              --           (1,047)
                                              ---------        ---------        ---------        ---------        ---------

Financing activities:
---------------------
Mortgage principal repayments                       --              (59)              --               --              (59)
Reduction in loans receivable from
  officers                                          41               --               --               --               41
Intercompany balances                            4,028           (4,505)             465               12               --
                                              ---------        ---------        ---------        ---------        ---------

Net cash (used in) provided by
  financing activities                           4,069           (4,564)             465               12              (18)
                                              ---------        ---------        ---------        ---------        ---------

Decrease in cash and cash equivalents          (10,793)          (1,115)             (49)              --          (11,957)

Cash and cash equivalents at beginning
  of period                                     57,150            4,680            1,170               --           63,000
                                              ---------        ---------        ---------        ---------        ---------

Cash and cash equivalents at end of
  period                                      $ 46,357         $  3,565         $  1,121         $     --         $ 51,043
                                              =========        =========        =========        =========        =========

Supplemental disclosure of cash flow
  information:

Cash paid  for:

Income taxes                                  $      8         $     82         $     --         $     --         $     90
                                              ---------        ---------        ---------        ---------        ---------
Interest                                        14,063         $    440         $     --         $     --         $ 14,503
                                              =========        =========        =========        =========        =========
</TABLE>





                                                             Page 20
<PAGE>

<TABLE>
<CAPTION>

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


                                               Consolidating Statement of Cash Flows
                                            For the sixteen weeks ended April 18, 2004
                                                          (In thousands)
                                                            (Unaudited)


                                                                     Guarantor        Nonguarantor                      Consolidated
                                                     Parent        Subsidiaries       Subsidiaries     Eliminations         Total
                                                     ------        ------------       ------------     ------------         -----
<S>                                                 <C>              <C>              <C>              <C>              <C>
Operating Activities:

Net (loss) income                                   $ (3,298)        $ (2,983)        $    120         $     --         $ (6,161)
  Adjustments to reconcile net income (loss)
    to net cash provided by (used in)
    operating activities
  Depreciation and amortization                        2,244            2,900              277               --            5,421
  Amortization of senior notes discount                  117               --               --               --              117
  Amortization of deferred financing                     296               --               --               --              296
  Asset impairment and restaurant
    closings                                             175               --               --               --              175
  Increase in deferred rent, net                          89                3                1               --               93
  Equity in net income of unconsolidated
    affiliates                                          (398)              --               --               --             (398)
  Dividends received from unconsolidated
    affiliates                                           305               --               --               --              305

Changes in operating assets and liabilities:
  Decrease (increase) in receivables                     229             (104)             103               --              228
  Decrease (increase) in inventories                     (16)             (84)               5               --              (95)
  Increase in prepaid expenses                        (1,524)          (1,178)              (1)              --           (2,703)
  Decrease (increase) in other assets                   (919)              17              202              748               48
  Decrease in accounts payable and accrued
    expenses                                          (3,977)             (82)            (155)            (748)          (4,962)
  Decrease in accrued interest payable                (5,394)              --               --               --           (5,394)
                                                    ---------        ---------        ---------        ---------        ---------

 Net cash provided by (used in) operating
    activities                                       (12,071)          (1,511)             552               --          (13,030)
                                                    ---------        ---------        ---------        ---------        ---------
</TABLE>




                                                             Page 21
<PAGE>

<TABLE>
<CAPTION>

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


                                               Consolidating Statement of Cash Flows
                                            For the sixteen weeks ended April 18, 2004
                                                          (In thousands)
                                                            (Unaudited)


                                                              Guarantor         Nonguarantor                     Consolidated
                                               Parent        Subsidiaries       Subsidiaries    Eliminations        Total
                                               ------        ------------       ------------    ------------        -----
<S>                                          <C>              <C>              <C>              <C>                <C>
Investing activities:
---------------------
Purchase of property and equipment           $ (1,031)        $ (1,252)        $    (41)        $        --        $ (2,324)
                                             ---------        ---------        ---------        ------------       ---------

Net cash used in investing activities          (1,031)          (1,252)             (41)                 --          (2,324)
                                             ---------        ---------        ---------        ------------       ---------

Financing activities:
---------------------
Mortgage principal repayments                      --              (54)              --                  --             (54)
Tax distribution                                 (682)              --               --                  --            (682)
Reduction in loans receivable from
  officers                                        503               --               --                  --             503
Intercompany balances                            (596)             916             (320)                 --              --
                                             ---------        ---------        ---------        ------------       ---------
Net cash (used in) provided by
   financing activities                          (775)             862             (320)                 --            (233)
                                             ---------        ---------        ---------        ------------       ---------

Increase (decrease) in cash and
  cash equivalents                            (13,877)          (1,901)             191                  --         (15,587)
                                             ---------        ---------        ---------        ------------       ---------

Cash and cash equivalents at
  beginning of period                          49,515            5,595            1,299                  --          56,409
                                             ---------        ---------        ---------        ------------       ---------

Cash and cash equivalents at
  end of period                              $ 35,638         $  3,694         $  1,490                  --        $ 40,822
                                             =========        =========        =========        ============       =========

Supplemental disclosure of cash flow
  information:
Cash paid  for:
Income taxes                                 $    106         $     95         $      3         $        --        $    204
                                             =========        =========        =========        ============       =========
Interest                                     $ 14,025              433         $     --                  --        $ 14,458
                                             =========        =========        =========        ============       =========

</TABLE>



                                                             Page 22
<PAGE>


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

The following  discussion and analysis of our financial condition and results of
operations  should  be read  in  conjunction  with  the  consolidated  financial
statements, the notes thereto and other data and information appearing elsewhere
in this report.

Results of Operations
---------------------

We are a leading  owner,  operator and  franchisor of Quick Service  Restaurants
("QSR"),  serving a wide variety of Italian specialty foods. We also operate, in
certain  cases  with  joint  venture  partners,  a number  of  other  restaurant
concepts.

The following table summarizes the number of Sbarro owned,  franchised and other
concept restaurants in operation during each indicated period:

                                               16 Weeks          16 Weeks
                                                 Ended             Ended
                                                04/24/05         04/18/04 (1)
                                                --------         ------------

Company-owned Sbarro
restaurants:
 Open at beginning of period                       511               533
 Opened during period                                1                 2
 Sold to franchisees
     during period                                  --                (2)

 Closed during period                              (15)              (22)
                                                  -----             -----
 Open at end of period                             497               511
                                                  -----             -----

Franchised Sbarro restaurants:

 Open at beginning of period                       416               364
 Opened during period                               16                32
 Acquired from Sbarro during
   period                                           --                 2

 Closed or terminated during period                 --                (5)
                                                  -----             -----
 Open at end of period                             432               393
                                                  -----             -----

Other concepts:
 Open at beginning of period                        22                27
 Opened during period                                3                --
 Closed during period                               --                (3)
                                                  -----             -----
 Open at end of period                              25                24
                                                  -----             -----

All restaurants:
 Open at beginning of period                       949               924
 Opened during period                               20                34
 Closed or terminated during period                (15)              (30)
                                                  -----             -----
 Open at end of period                             954               928
 ---------------------                            =====             =====
(1) The table above reflects a reclassification  of our Umberto mall restaurants
from other concepts to  company-owned  Sbarro  restaurants for the sixteen weeks
ended April 18, 2004.


                                     Page 23
<PAGE>

Executive Overview

Sales  increased in the first  quarter of 2005  compared to the first quarter of
2004. Mall traffic has increased as retailers,  particularly high end mall based
retailers,  are serving more customers. In addition, since 2004, we re-energized
our QSR operations  while  continuing to provide a quality  product coupled with
quality service. We believe our strategy resulted in the significant improvement
of our operating results,  including higher sales and earnings.  Selective price
increases, improvements in operational controls and upgraded store management at
all levels produced  increased sales and improved  earnings in the first quarter
of 2005.

We have developed a new concept,  Carmela's of Brooklyn,  which opened its first
restaurant  in  February  2005.  Carmela's  of  Brooklyn  is expected to operate
outside of our traditional mall, hospitality and airport venues. We believe that
the continuing development of this and other concepts,  along with a combination
of our  re-energized QSR restaurants and continued growth in our franchise based
business, should lead to continued improvements in both revenues and profits.

Seasonality

Our  business is subject to seasonal  fluctuations,  and the effects of weather,
national security, economic and business conditions.  Earnings have been highest
in our fourth quarter due primarily to increased volume in shopping malls during
the holiday shopping season. Our annual earnings can fluctuate due to the length
of the holiday  shopping period between  Thanksgiving and New Year's Day and the
number of weeks in our fourth  quarter.  In recent  years,  our  fourth  quarter
income has fluctuated significantly due to a number of other factors,  including
the adverse effect of the general  economic  downturn and  significant  year end
adjustments relating to asset impairment and store closing costs.

Goodwill and Other Intangible Assets

Due to the  seasonality  of our  business,  until we  determine  the  results of
operations  for our fourth  quarter,  we are not able to perform our annual test
for impairment on our goodwill and intangible  assets with  indefinite  lives as
required by SFAS No. 142,  "Goodwill  and Other  Intangible  Assets,"  and fully
evaluate  the  impairment  of  long-lived  assets as  required  by SFAS No. 144,
"Accounting for the Impairment and Disposal of Long-Lived  Assets." Any required
adjustments are recorded at that time unless impairment factors become evident.



                                    Page 24
<PAGE>

Relevant Financial Information
<TABLE>
<CAPTION>

                                                                        Sixteen weeks ended
                                                          -------------------------------------------------
                                                              April 25, 2005           April 18, 2004
                                                          -------------------------------------------------
                                                                       (dollars in millions)

<S>                                                            <C>                        <C>
Comparable Sbarro-owned QSR sales (1)                          $  86.3                    $  85.8
Sbarro-owned QSR sales percentage change vs. prior
 comparable period (1)                                             2.2%                       6.6%
Franchise location sales                                       $  78.8                    $  71.9
Franchise revenues                                             $   3.5                    $   3.4
Cost of food and paper products as a percentage                   20.9%                      22.0%
 of restaurant sales
Payroll and other benefits as a percentage of                     28.0%                      28.8%
 restaurant sales
Other operating expenses as a percentage of                       38.5%                      37.2%
 restaurant sales
General and administrative costs as a percentage                   8.4%                       8.4%
 of revenues
Asset impairment, and restaurant closings                      $   0.1                    $   0.2
EBITDA (2)                                                     $   8.6                    $   8.3
</TABLE>

----------

     (1) Comparable  Sbarro-owned QSR sales dollar and annual percentage changes
     are based on locations that were in operation on a continuing basis for all
     of each  period  presented.  Comparable  Sbarro-owned  QSR sales for the 16
     weeks of 2004  included  the  week  between  Christmas  and New  Year's,  a
     traditionally high traffic week, while the 16 weeks of 2005 did not include
     that high traffic week  (negatively  impacting sales by $1.9 million).  The
     percentage  change vs. prior  comparable  period  adjusted for this unusual
     week would have been 4.5% for the first quarter of 2005.

     (2) Our consolidated  EBITDA for the sixteen weeks ended April 24, 2005 was
     $8.6 million compared to $8.3 million for the sixteen weeks ended April 18,
     2004. EBITDA represents earnings before interest income,  interest expense,
     taxes,  depreciation and  amortization.  EBITDA should not be considered in
     isolation  from,  or as a  substitute  for,  net  income,  cash  flow  from
     operations or other cash flow  statement  data prepared in accordance  with
     generally  accepted  accounting  principles  ("GAAP")  or as a measure of a
     company's  profitability  or  liquidity.  Rather,  we believe  that  EBITDA
     provides relevant and useful  information for analysts and investors in our
     senior notes in that EBITDA is one of the factors in the calculations  used
     to determine our  compliance  with the ratios in the indenture  under which
     our senior  notes are issued.  We also  internally  use EBITDA to determine
     whether to


                                    Page 25
<PAGE>


     continue operating restaurant units since it provides us with a measurement
     of whether we are receiving an adequate cash return on our cash investment.
     Our  calculation  of EBITDA may not be  comparable  to a  similarly  titled
     measure reported by other  companies,  since all companies do not calculate
     this non-GAAP measure in the same manner.  Our EBITDA  calculations are not
     intended to represent cash provided by (used in) operating activities since
     they do not include  interest and taxes and changes in operating assets and
     liabilities,  nor are they  intended to  represent  a net  increase in cash
     since  they do not  include  cash  provided  by  (used  in)  investing  and
     financing activities. The following table reconciles EBITDA to our net loss
     for the sixteen week periods presented, which we believe is the most direct
     comparable GAAP financial measure to EBITDA (in thousands):

                                                      Sixteen Weeks Ended
                                              April 24, 2005    April 18, 2004
                                              --------------    --------------

              EBITDA                            $  8,617           $ 8,345
              Interest expense                    (9,473)           (9,477)
              Interest income                        365               196
              Income taxes                          (277)             (241)
              Depreciation and amortization       (4,973)           (4,984)
                                                ---------         ---------
              Net loss                          $ (5,741)          $(6,161)
                                                =========         =========

Sales by QSR and consolidated other concept restaurants  increased 0.5% to $91.3
million  for the sixteen  weeks ended April 24, 2005 from $90.8  million for the
sixteen weeks ended April 18, 2004.  The increase in sales for the first quarter
of 2005  includes  $1.0  million  (1%) of  higher  restaurant  sales  in our QSR
restaurants.  The 16 weeks of 2004  included a week  between  Christmas  and New
Year's,  a traditionally  high traffic week,  while the 16 weeks of 2005 did not
include that high traffic week  (negatively  impacting  sales by $1.9  million).
Sales increased 1% after absorbing this unusual start.  Restaurant  sales of our
consolidated other concepts were slightly down for the quarter.  We believe that
improved  economic   conditions  in  the  United  States,   improvement  in  our
operational  controls and upgraded  field and store  management,  combined  with
selective price increases, accounted for the improvements.

Franchise  related  income  increased  slightly  to $3.5  million  for the first
quarter of 2005 from $3.4 million in the first quarter of 2004. The increase was
attributed  to additional  locations  opened during the last year (net of closed
locations) and a slight increase in comparable sales.

Cost of food and paper products as a percentage of restaurant  sales improved by
1.1% to 20.9% for the  sixteen  weeks  ended  April 24,  2005 from 22.0% for the
sixteen  weeks ended April 18, 2004.  The cost of cheese in the first quarter of
2005  averaged   approximately  $1.75  per  pound  compared  to  an  average  of
approximately $1.82 per pound for the first quarter of 2004. This $.07 per pound
improvement  in cheese cost


                                    Page 26
<PAGE>


accounted for $0.2 million or 0.2 of the percentage point improvement.  Improved
operational  controls,  combined with selective price  increases  implemented in
2004  contributed  to the  improvement  in our cost of sales as a percentage  of
restaurant sales.

Payroll  and other  employee  benefits  as a  percentage  of  restaurant  sales,
improved to 28.0% in the first  quarter of 2005 from 28.8% in the first  quarter
of 2004. The  improvement was primarily a result of the improved sales resulting
from increased mall traffic and selective price increases taken in 2004.

Other operating costs increased by $1.3 million in the first quarter of 2005 and
as a percentage of restaurant  sales  increased to 38.5% from 37.2% in the first
quarter of 2004. The increase was primarily related to an increase in restaurant
management  bonuses  of  approximately  $0.9  million  resulting  from  improved
profits, and an increase in occupancy and other costs.

Interest  expense of $9.5  million  for both the first  quarter of 2005 and 2004
relates primarily to the 11%, $255 million senior notes we issued to finance our
going  private  transaction  and the  8.4%,  $16  million  mortgage  loan on our
corporate headquarters.

Equity  in  the  net  income  of   unconsolidated   affiliates   represents  our
proportionate share of earnings and losses in those other concept restaurants in
which  we have a 50% or less  ownership  interest.  Our  equity  in the  overall
profits of those concepts decreased by $0.4 million in the first quarter of 2005
from the  first  quarter  of 2004 as a result  of a decline  in  traffic  in our
steakhouse joint venture.  There is currently one steakhouse under  construction
which is expected to be completed  during the second  quarter of 2005. We do not
have any further expansion plans for this venture.

We have elected to be taxed under the provisions of Subchapter S of the Internal
Revenue Code and, where applicable and permitted,  under similar state and local
income  tax  provisions  beginning  January  3, 2000.  Under the  provisions  of
Subchapter S, substantially all taxes on our income are paid by our shareholders
rather than us. Our tax expense was $0.3  million and $0.2 million for the first
quarter of 2005 and 2004, respectively. The expense in each period was for taxes
owed by us to jurisdictions  that do not recognize S corporation  status or that
tax entities  based on factors  other than income and for taxes  withheld at the
source of payment on foreign franchise income related payments.



                                    Page 27
<PAGE>


Liquidity and Capital Resources

Cash Requirements

Our liquidity requirements relate to debt service, capital expenditures, working
capital,  investments in other  ventures,  distributions  to  shareholders  when
permitted  under the indenture for the senior notes and to repay any  borrowings
we may make under our line of credit agreement and general  corporate  purposes.
We incur annual cash  interest  expense of  approximately  $29 million under the
senior notes and mortgage  loan and may incur  additional  interest  expense for
borrowings  under our line of  credit.  We are not  required  to make  principal
payments,  absent the  occurrence of certain  events,  on our senior notes until
they mature in September  2009.  We believe that  aggregate  restaurant  capital
expenditures  and our investments in joint ventures during 2005 will approximate
$14 million.

We expect our primary sources of liquidity to meet current  requirements will be
cash flow from  operations.  Our $3.0 million line of credit which was to expire
in May 2005 and has been  extended to July 15, 2005 is  uncommitted.  Therefore,
our lender could refuse to lend to us at any time. We do not presently expect to
borrow  under our line of credit  except for  required  letters  of credit.  The
maximum  amount  available  of our  line  of  credit,  after  giving  effect  to
outstanding  letters of credit,  was $1.2 million at April 24, 2005. The Company
is finalizing a new line of credit to replace the existing  credit line. The new
line should be in place in the second  quarter of 2005.  While we expect to have
this new line in place,  there can be no  assurances  that we will  complete the
negotiations to finalize an agreement or further extend our existing line.

Contractual Obligations and Off-Balance Sheet Arrangements

Our contractual  obligations and off-balance sheet  arrangements with respect to
both our and other  concepts (both those in which we have a majority or minority
interest) do not materially  differ from the  information  disclosed in Part II,
Item 7 of our Annual Report on Form 10-K for the year ended January 2, 2005.





                                    Page 28
<PAGE>


Sources and Uses of Cash

The following table summarizes our cash and cash equivalents and working capital
as at the end of the  first  quarters  of 2005 and  2004,  respectively  and the
sources  and uses of our cash  flows  during the first  quarters  of each of the
respective years:

                                                       Sixteen Weeks Ended
                                                       -------------------
                                                April 24, 2005    April 18, 2004
                                                --------------    --------------
                                                          (in millions)

   Liquidity at the end of period
   ------------------------------
   Cash and cash equivalents                        $ 51.0           $ 40.8
   Working capital                                    31.0             25.6

   Net cash flows for the period
   -----------------------------
   Used in operating activities                      (10.9)           (13.1)
   Used in investing activities                       (1.1)            (2.3)
   Used in financing activities                         --             (0.2)
                                                    -------          --------
   Net decrease in cash                             $(12.0)          $(15.6)

We have  not  historically  required  significant  working  capital  to fund our
existing  operations and have financed our capital  expenditures and investments
in joint ventures through cash generated from operations.

Net cash used in operating  activities  was $10.9  million for the sixteen weeks
ended April 24, 2005  compared to $13.1  million  used during the sixteen  weeks
ended April 18, 2004.  The decrease in net cash used in operating  activities is
primarily related to the change in prepaid expenses resulting from the timing of
our insurance payments.

Net cash used in  investing  activities  has  historically  been  primarily  for
capital  expenditures.  Net cash used in investing  activities decreased by $1.2
million to $1.1  million  for the  sixteen  weeks ended April 24, 2005 from $2.3
million for the sixteen weeks ended April 18, 2004  primarily due to the sale of
joint venture property and equipment.



                                    Page 29
<PAGE>

Critical Accounting Policies and Judgments

Accounting  policies are an integral  part of the  preparation  of our financial
statements in accordance with accounting  principles  generally  accepted in the
United States of America.  Understanding  these  policies,  therefore,  is a key
factor in  understanding  our  reported  results  of  operations  and  financial
position. Accounting policies often require us to make estimates and assumptions
that affect the amounts of assets,  liabilities,  revenues and expenses reported
in the financial  statements.  Due to their nature,  estimates involve judgments
based upon  available  information.  Therefore,  actual results or amounts could
differ from  estimates and the  difference  could have a material  impact on our
consolidated  financial  statements.  During the  sixteen  weeks ended April 24,
2005, there were no material changes in our accounting  policies discussed under
the heading "Critical  Accounting  Policies and Judgments" in Part II, Item 7 of
our Annual  Report on Form 10-K for the fiscal year ended  January 2, 2005 whose
application  may have the most  significant  effect on our  reported  results of
operations  or  financial  position  and that require  judgments  estimates  and
assumptions by management that can affect their application from the matters.

Certain Relationships and Transactions

During  the first  quarter of 2005,  there  were no  changes  in  related  party
transactions  discussed  under the heading  "Certain  Relationships  and Related
Transactions" in Part II, Item 13 of our Annual Report on Form 10-K for the year
ended January 2, 2005.

Forward Looking Statements

This report  contains  certain  forward-looking  statements  about our financial
condition,   results  of  operations,   future  prospects  and  business.  These
statements  appear in a number of places in the  report and  include  statements
regarding our intent,  belief,  expectation,  strategies or  projections at this
time. These statements generally contain words such as "may," "should," "seeks,"
"believes,"  "in  our  opinion,"  "expects,"  "intends,"  "plans,"  "estimates,"
"projects," "strategy" and similar expressions or the negative of those words.

Forward-looking  statements  are subject to a number of known and unknown  risks
and  uncertainties  that could cause actual  results to differ  materially  from
those projected,  expressed or implied in the forward-looking statements.  These
risks and uncertainties,  many of which are not within our control,  include but
are not limited to:

o        general economic,  inflation,  national security,  weather and business
         conditions;
o        the availability of suitable  restaurant sites in appropriate  regional
         shopping malls and other locations on reasonable rental terms;
o        changes in consumer tastes;


                                    Page 30
<PAGE>


o        changes in population and traffic patterns,  including the effects that
         military  action  and  terrorism  or  other  events  may  have  on  the
         willingness of consumers to frequent malls,  airports or downtown areas
         which are the predominant areas in which our restaurants are located;
o        our ability to continue to attract franchisees;
o        the success of our present,  and any future,  joint  ventures and other
         expansion opportunities;
o        the availability of food (particularly  cheese and tomatoes),  beverage
         and paper products at current prices;
o        our ability to pass along cost increases to our customers;
o        increases in the Federal minimum wage;
o        the continuity of services of members of our senior management team;
o        our ability to attract and retain  competent  restaurant  and executive
         managerial personnel;
o        competition;
o        the level of, and our ability to comply with, government regulations;
o        our ability to generate  sufficient cash flow to make interest payments
         and principal under our senior notes and line of credit;
o        our ability to comply with covenants  contained in the indenture  under
         which  the  senior  notes  are  issued,   and  the  effects  which  the
         restrictions  imposed  by those  covenants  may have on our  ability to
         operate our business; and
o        our ability to  repurchase  our senior notes to the extent  required in
         the  event we make  certain  asset  sales  or  experience  a change  of
         control.

You are cautioned not to place undue reliance on these  statements,  which speak
only as of the date of the report.  We do not  undertake any  responsibility  to
release publicly any revisions to these forward-looking  statements to take into
account  events or  circumstances  that  occur  after  the date of this  report.
Additionally,  we do not  undertake  any  responsibility  to  update  you on the
occurrence of any unanticipated  events which may cause actual results to differ
from those expressed or implied by the forward-looking  statements  contained in
this report.



                                    Page 31
<PAGE>


Item 3.  Qualitative and Quantitative Disclosures of Market Risk

We have historically invested our cash on hand in short term, fixed rate, highly
rated and  highly  liquid  instruments  which are  reinvested  when they  mature
throughout  the year.  The  indenture  under  which our senior  notes are issued
limits us to similar  investments.  Although  our existing  investments  are not
considered  at risk with  respect to changes in  interest  rates or markets  for
these  instruments,  our  rate of  return  on  short-term  investments  could be
affected at the time of reinvestment as a result of intervening events.

Future  borrowings  under our credit  facility (none are currently  outstanding)
will be at rates that float with the market and,  therefore,  will be subject to
fluctuations  in interest  rates.  Our $255  million  senior  notes bear a fixed
interest rate of 11%. We are not a party to, and do not expect to enter into any
interest rate swaps or other instruments to hedge interest rates.

We have not purchased, and do not expect to purchase, future, forward, option or
other instruments to hedge against fluctuations in the prices of the commodities
we  purchase.  As a result,  our future  commodities  purchases  are  subject to
changes in the prices of such commodities.

All of our transactions  with foreign  franchisees have been denominated in, and
all payments have been made in, United States dollars, reducing the risks in the
changes in the values of foreign currencies.  As a result, we have not purchased
future  contracts,  options or other  instruments  to hedge  against  changes in
values of foreign currencies.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures:

Our management,  with the participation of our Chief Executive Officer and Chief
Financial  Officer,  has evaluated the effectiveness of our disclosure  controls
and procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under
the Securities Exchange Act of l934, as amended (the "Exchange Act")), as of the
end of the period covered by this report.  Based on such  evaluation,  our Chief
Executive  Officer  and  Chief  Financial  Officer,   have  concluded  that  the
disclosure  controls and procedures are not effective for the reasons  specified
below.

In  connection  with our 2004 year ended  closing  process  and the delay in the
filing of our Form 10-K for that year, we identified  two issues which we are in
the process of (but have not as yet completed) rectifying:

         o        We had  insufficient  staffing in the accounting and reporting
                  function  and certain  changes in  management  and  accounting
                  personnel  during the  course of the audit of our fiscal  2004
                  financial statements which strained our existing resources. We
                  have been  addressing  the  issue of  upgrading  our  finance,
                  accounting and internal  control  functions since prior to the
                  commencement  of the  audit to add  personnel  of  skills  and
                  training that will not only enable us to accelerate  the audit
                  closing  function  but also


                                    Page 32
<PAGE>

                  will expand the numbers of members of our staff with knowledge
                  of technical accounting literature.  As reported in our Report
                  on Form  10-K for the  year  ended  January  2,  2005,  we had
                  changed  certain  senior  accounting  personnel  and  added  a
                  director of compliance.  In addition, just prior to the filing
                  of our  Report  on Form  10-K,  we hired a senior  accountant.
                  Since the filing of our Report on Form 10-K, we have hired two
                  additional  senior  accountants  (one of whom is  replacing  a
                  senior accountant who recently  resigned),  and are seeking an
                  additional  senior  accountant.  We will  continue  to  review
                  whether we need additional accounting personnel.

         o        Our existing accounting resources were further strained by our
                  need to  analyze  the  impact of the views of the Staff of the
                  Securities and Exchange Commission set forth in a letter dated
                  February 7, 2005 from the Chief  Accountant of the  Securities
                  and  Exchange  Commission  to the  Chairman  of the Center for
                  Public Company Audit Firms of the American Institute of Public
                  Accountants  concerning the  accounting for operating  leases,
                  which  has  effected  many  companies,  especially  restaurant
                  companies,  with significant  leases. We are in the process of
                  evaluating  computer  software  programs  that can provide the
                  requisite  lease  analysis  in the  future and are also in the
                  process of providing  training to all present and future staff
                  accountants  to ensure,  on a  prospective  basis,  the proper
                  accounting,  reporting,  documentation and application of SFAS
                  No. 13,  "Accounting  for Leases" and FASB Technical  Bulletin
                  No. 85-3, "Accounting for Operating Leases with Scheduled Rent
                  Increases."

Internal Control Over Financial Reporting:

Except as  described  above,  there have not been any  changes in the  Company's
internal  control  over  financial  reporting  (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) since the fourth quarter of 2004
that have materially  affected,  or are reasonable likely to materially  affect,
the Company's internal control over financial reporting.



                                    Page 33
<PAGE>

PART II. OTHER INFORMATION
--------------------------

Item 1.  Legal proceedings

         In May 2002, the landlord of a joint venture restaurant location closed
         during  2002 filed a complaint  against us in the Supreme  Court of New
         York for  Westchester  County  alleging  that we were  obligated to it,
         pursuant to a Guaranty  Agreement we executed,  for all rent during the
         remaining  lease based on an alleged breach of the lease by the tenant,
         a subsidiary of the Company. We believed that our guarantee was limited
         in amount while the landlord  alleged  that the  guarantee  covered all
         amounts  that would  become due during the  remaining  lease term.  The
         court  issued a ruling in November  2003 which  limited our  liability,
         which we estimated at $500,000 and included in our financial statements
         in 2003. The landlord appealed this decision.  Given the uncertainty of
         the  results  of an appeal and  liability  we would have by reason of a
         reversal,  we settled the matter for  $800,000 in the first  quarter of
         2005.

Item 6.  Exhibits

         Exhibit
         Number                             Description
         ------                             -----------

         31.01    Certification  of  Principal  Executive  Officer  pursuant  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.

         31.02    Certification of Vice President,  Chief Financial  Officer and
                  Principal  Accounting  Officer  pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

         32.01    Certification  of  Principal  Executive  Officer  pursuant  to
                  Section 906 of the Sarbanes-Oxley Act of 2002.

         32.02    Certification of Vice President,  Chief Financial  Officer and
                  Principal  Accounting  Officer  pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.



                                    Page 34
<PAGE>


                                   SIGNATURES
                                   ----------


Pursuant to the  requirements of Section 13 or 15(d) 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, 2005                By:    /s/ Peter Beaudrault
         ------------                       --------------------
                                            Peter Beaudrault
                                            President and
                                            Chief Executive Officer
                                            (Principal Executive Officer)

Date:    June 8, 2005                By:    /s/ Anthony J. Puglisi
         ------------                       ------------------------------
                                            Anthony J. Puglisi
                                            Vice President and
                                            Chief Financial Officer
                                            (Principal Accounting Officer)




                                    Page 35
<PAGE>

                                  EXHIBIT INDEX

         Exhibit
         -------
         Number                             Description
         ------                             -----------

         31.01    Certification  of  Principal  Executive  Officer  pursuant  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.

         31.02    Certification of Vice President,  Chief Financial  Officer and
                  Principal  Accounting  Officer  pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

         32.01    Certification  of  Principal  Executive  Officer  pursuant  to
                  Section 906 of the Sarbanes-Oxley Act of 2002.

         32.02    Certification of Vice President,  Chief Financial  Officer and
                  Principal  Accounting  Officer  pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.