<PAGE>   1
===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)

          X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        ----  EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 2,
              1997, OR

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

                         COMMISSION FILE NUMBER 1-12814

                            COLE NATIONAL CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

       DELAWARE                                                 34-1453189
(STATE OR OTHER JURISDICTION OF                              (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                              IDENTIFICATION NO.)

        5915 LANDERBROOK DRIVE
         MAYFIELD HEIGHTS, OHIO                                   44124
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                        (ZIP CODE)

                                  (440)449-4100
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.    X  YES      NO
                                   ------     ----

AS OF AUGUST 29, 1997, 14,724,935 SHARES OF THE REGISTRANT'S CLASS A COMMON
STOCK WERE OUTSTANDING.
===============================================================================
<PAGE>   2
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                   COLE NATIONAL CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                          QUARTER ENDED AUGUST 2, 1997
                                      INDEX
<TABLE>
<CAPTION>

                                                                                              PAGE NO.

PART I.     FINANCIAL INFORMATION
<S>         <C>                                                                              <C>     
            ITEM 1.      FINANCIAL STATEMENTS

                         CONSOLIDATED BALANCE SHEETS AS OF AUGUST 2, 1997 
                         AND FEBRUARY 1, 1997 ......................................           1

                         CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE 13 
                         WEEKS ENDED AUGUST 2, 1997 AND AUGUST 3, 1996 
                         AND FOR THE 26 WEEKS ENDED AUGUST 2, 1997
                         AND AUGUST 3, 1996..........................................           2

                         CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE 26
                         WEEKS ENDED AUGUST 2, 1997 AND AUGUST 3, 1996...............           3

                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS..................         4 - 6

            ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                         FINANCIAL CONDITION AND RESULTS OF OPERATIONS................        7 - 10

PART II.    OTHER INFORMATION

            ITEM 2.      CHANGES IN SECURITIES.......................................           11

            ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K............................           11
</TABLE>

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<PAGE>   3

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                   COLE NATIONAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                        August 2,     February 1,
                                                          1997          1997
                                                        ---------     ----------
<S>                                                     <C>           <C>      
Assets
------
Current assets:
    Cash and temporary cash investments                 $ 133,142     $  73,141
    Accounts receivable, less allowance for doubtful
      accounts of $2,104 in 1997 and $3,068 in 1996        52,212        39,660
    Current portion of notes receivable                     5,049         6,060
    Inventories                                           129,570       119,236
    Prepaid expenses and other                             14,248         7,378
    Deferred income tax benefits                           24,948        24,948
                                                        ---------     ---------
          Total current assets                            359,169       270,423
Property and equipment, at cost                           227,624       216,575
    Less-accumulated depreciation and amortization       (111,809)     (100,918)
                                                        ---------     ---------
          Total property and equipment, net               115,815       115,657

Other assets:
    Notes receivable, excluding current portion            23,427        27,951
    Deferred income taxes and other                        43,359        29,504
    Intangible assets, net                                137,205       139,308
                                                        ---------     ---------
          Total assets                                  $ 678,975     $ 582,843
                                                        =========     =========

Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
    Current portion of long-term debt                   $   1,352     $   1,336
    Accounts payable                                       47,912        62,379
    Accrued interest                                        7,804         9,630
    Accrued liabilities                                   119,216       123,263
    Accrued income taxes                                   10,702        21,970
                                                        ---------     ---------
          Total current liabilities                       186,986       218,578

Long-term debt, net of discount and current portion       317,116       317,547

Other long-term liabilities                                26,949        27,000

Stockholders' equity:
    Common stock                                               15            12
    Paid-in capital                                       250,447       131,238
    Foreign currency translation adjustment                (1,515)         (606)
    Notes receivable - stock option exercise                 (927)       (1,024)
    Accumulated deficit                                  (100,096)     (109,902)
                                                        ---------     ---------
          Total stockholders' equity                      147,924        19,718
                                                        ---------     ---------
          Total liabilities and stockholders' equity    $ 678,975     $ 582,843
                                                        =========     =========
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.


                                     -1-

<PAGE>   4

                   COLE NATIONAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>

                                                          13 Weeks Ended               26 Weeks Ended
                                                      -----------------------      ----------------------
                                                      August 2,     August 3,      August 2,     August 3,
                                                         1997         1996           1997           1996
                                                      ---------     ---------      ---------     ---------

<S>                                                   <C>           <C>            <C>           <C>      
Net revenue                                           $ 254,943     $ 153,465      $ 504,473     $ 296,355

Costs and expenses:
    Cost of goods sold                                   85,352        47,400        171,122        91,900
    Operating expenses                                  141,247        87,799        284,590       175,151
    Depreciation and amortization                         7,337         4,294         15,152         8,529
                                                      ---------     ---------      ---------     ---------

       Total costs and expenses                         233,936       139,493        470,864       275,580
                                                      ---------     ---------      ---------     ---------

Income from operations                                   21,007        13,972         33,609        20,775

Interest expense, net                                     8,173         4,729         16,404         9,781
                                                      ---------     ---------      ---------     ---------

Income before income taxes  
  and extraordinary item                                 12,834         9,243         17,205        10,994

Income tax provision                                      5,476         4,066          7,399         4,837
                                                      ---------     ---------      ---------     ---------

Income before extraordinary item                          7,358         5,177          9,806         6,157

Extraordinary loss on early
  extinguishment of debt                                   --            (682)          --            (682)
                                                      ---------     ---------      ---------     ---------

Net income                                            $   7,358     $   4,495      $   9,806     $   5,475
                                                      =========     =========      =========     =========
</TABLE>





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

                                     -2-


<PAGE>   5

                   COLE NATIONAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                          26 Weeks Ended
                                                                      ------------------------
                                                                       August 2,     August 3,
                                                                         1997           1996
                                                                      ---------      ---------
<S>                                                                   <C>            <C>      
Cash flows from operating activities:
    Net income                                                        $   9,806      $   5,475
    Adjustments to reconcile net income to net cash
     provided (used) by operating activities:
          Extraordinary loss on early extinguishment of debt               --              682
          Depreciation and amortization                                  15,152          8,529
          Non-cash interest                                                 113            214
          Change in assets and liabilities:
              Increase in accounts and notes receivable, prepaid
                expenses and other assets                               (18,632)          (790)
              Decrease (increase) in inventories                        (10,334)           630
              Increase (decrease) in accounts payable, accrued
                liabilities and other liabilities                       (13,416)         3,237
              Decrease in accrued interest                               (1,826)          (637)
              Increase (decrease) in accrued income taxes               (11,268)           327
                                                                      ---------      ---------
                 Net cash provided (used) by operating activities       (30,405)        17,667
                                                                      ---------      ---------
Cash flows from financing activities:
    Repayment of long-term debt                                            (564)       (16,457)
    Proceeds from exercise of stock options and warrants                  2,668            271
    Proceeds from public stock offering, net                            115,909         26,202
    Other, net                                                             (107)            93
                                                                      ---------      ---------
                 Net cash provided by financing activities              117,906         10,109
                                                                      ---------      ---------

Cash flows from investing activities:
    Purchases of property and equipment, net                            (13,110)        (8,584)
    Systems development costs                                            (6,990)        (2,219)
    Other, net                                                           (7,400)          (145)
                                                                      ---------      ---------
                 Net cash used by investing activities                  (27,500)       (10,948)
                                                                      ---------      ---------

Cash and temporary cash investments:
  Net increase during the period                                         60,001         16,828
  Balance, beginning of the period                                       73,141         29,260
                                                                      ---------      ---------
  Balance, end of the period                                          $ 133,142      $  46,088
                                                                      =========      =========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.
                                      -3-
<PAGE>   6

                   COLE NATIONAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(1) BASIS OF PRESENTATION AND ACCOUNTING POLICIES

     The consolidated financial statements include the accounts of Cole National
Corporation (CNC), its wholly owned subsidiaries, including Cole National Group,
Inc. (CNG), and CNG's wholly owned subsidiaries (collectively, the "Company").
All significant intercompany transactions have been eliminated in       
consolidation.

     The accompanying consolidated financial statements have been prepared
without audit and certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, although the Company
believes that the disclosures herein are adequate to make the information not
misleading. These statements should be read in conjunction with the Company's
consolidated financial statements for the fiscal year ended February 1, 1997.

     In the opinion of management, the accompanying financial statements contain
all adjustments (consisting only of normal recurring accruals) necessary to
present fairly the Company's financial position as of August 2, 1997 and the
results of operations for the 13 and 26 weeks ended August 2, 1997 and August 3,
1996, and cash flows for the 26 weeks ended August 2, 1997 and August 3, 1996.

     Inventories

     The accompanying interim consolidated financial statements have been
prepared without physical inventories. Inventories at August 2, 1997 and August
3, 1996 were valued at the lower of first-in, first-out (FIFO) cost or market.

     Cash Flows

     Net cash flows from operating activities reflect cash payments for income
taxes and interest of $18,661,000 and $19,044,000, respectively, for the 26
weeks ended August 2, 1997, and $4,556,000 and $11,073,000, respectively, for
the 26 weeks ended August 3, 1996.

     Earnings Per Share

     In the fourth quarter of fiscal 1997 the Company will adopt Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share". Under SFAS
No. 128, the Company's basic earnings per share and diluted earnings per share
will be presented on the face of the income statement. The basic earnings per
share will be determined using only the weighted average number of outstanding
shares during the period. The computation for diluted earnings per share will
include common stock equivalents and will not differ materially from current
accounting requirements.

                                      -4-
<PAGE>   7

     Due to the change in accounting required by SFAS No. 128, the Company has
provided the following to illustrate its earnings per share calculation under
current accounting, as well as under SFAS No. 128:

<TABLE>
<CAPTION>

                                                13 Weeks                      26 Weeks
                                         ------------------------      -------------------------
                                         August 2,     August 3,       August 2,     August 3,
                                            1997         1996             1997            1996
                                        ----------     ----------      ----------     ----------
<S>                                     <C>            <C>             <C>            <C>       
SFAS NO. 128:

Basic -
   Income before extraordinary item     $      .59     $      .47      $      .80     $      .57
   Extraordinary loss                         --             (.06)           --             (.06)
                                        ----------     ----------      ----------     ----------
      Net income                        $      .59     $      .41      $      .80     $      .51
                                        ==========     ==========      ==========     ==========
   Weighted Average Shares
    Outstanding (in 000's)                  12,437         11,002          12,228         10,719

Diluted -
   Income before extraordinary item     $      .57     $      .47      $      .77     $      .57
   Extraordinary loss                         --             (.06)           --             (.06)
                                        ----------     ----------      ----------     ----------
      Net income                        $      .57     $      .41      $      .77     $      .51
                                        ==========     ==========      ==========     ==========

   Weighted Average Shares and
     Common Stock Equivalents
     Outstanding (in 000's)                 12,964         11,098          12,723         10,841

CURRENT ACCOUNTING:

Primary and fully diluted -
   Income before extraordinary item     $      .57     $      .47      $      .77     $      .57
   Extraordinary loss                         --             (.06)           --             (.06)
                                        ----------     ----------      ----------     ----------
      Net income                        $      .57     $      .41      $      .77     $      .51
                                        ==========     ==========      ==========     ==========

   Weighted Average Shares
     and Common Stock Equivalents
     Outstanding (in 000's)                 12,964         11,002          12,723         10,719
</TABLE>

    (2)    STOCK OFFERING

           On July 18, 1997, the Company completed a public offering of
    2,587,500 shares of its Class A Common Stock at a price of $47.00 per share.
    Net proceeds from the offering were approximately $116 million.

    (3)    STOCK WARRANT EXERCISES

           During the 26 weeks ended August 2, 1997, warrants to purchase 90,389
    shares of the Company's Class A Common Stock were exercised at a price of
    $24.70. Proceeds from the warrant exercise were approximately $2.2 million.


                                      -5-
<PAGE>   8

    (4)    SEASONALITY

           The Company's business historically has been seasonal with
    approximately 30% of its revenues and approximately 50% of its income from
    operations occurring in the fourth fiscal quarter because of the importance
    of gift sales during the Christmas retailing season. Although the Pearle
    acquisition will moderate the seasonality of the Company due to relatively
    lower levels of optical product sales during the Christmas holiday season,
    the Company's business will remain seasonal. Therefore, results of
    operations for interim periods are not necessarily indicative of full year
    results.

    (5)    RECLASSIFICATIONS

           Certain 1996 amounts have been reclassified to conform with the 1997
    presentation.

    (6)    SUBSEQUENT EVENTS

           On August 5, 1997, the Company acquired all of the issued and
    outstanding common stock of American Vision Centers, Inc. (AVC), the ninth
    largest retail optical chain in the United States, for an aggregate purchase
    price of approximately $28.9 million, including debt assumed. The 
    acquisition will be accounted for under the purchase method of accounting.
    The Company anticipates that it will take a non-recurring business 
    integration charge in fiscal 1997. 

           On August 15, 1997, CNG announced a tender offer to purchase up to
    all of its $165.8 million 11-1/4% Senior Notes (the Senior Notes) due 2001
    at a price of $1,105.61 per $1,000 of principal, plus accrued interest. The
    tender offer expired on September 12, 1997, at which time a total of $150.9
    million of principal amount of Senior Notes were tendered, leaving $14.9
    million outstanding.

           As a result of the tender offer, the Company expects to record an
    extraordinary charge of up to $20.0 million, representing the tender
    premium, the write-off of the related unamortized debt discount and other
    costs associated with purchasing the debt.

           On August 22, 1997, CNG issued $125.0 million of 8-5/8% Senior
    Subordinated Notes (the Senior Subordinated Notes) due 2007. Proceeds from
    this debt issuance of approximately $121.7 million, along with cash on hand,
    will be used to fund the above-mentioned tender offer.

                                      -6-
<PAGE>   9

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

     The following is a discussion of certain factors affecting the Company's
results of operations for the 13 week and 26 week periods ended August 2, 1997
and August 3, 1996 (the Company's second quarter and first six months,
respectively) and its liquidity and capital resources. This discussion should be
read in conjunction with the consolidated financial statements and notes thereto
included elsewhere in this filing and the Company's audited financial statements
for the fiscal year ended February 1, 1997 included in its annual report on Form
10-K.

     The Company's fiscal year ends on the Saturday closest to January 31.
Fiscal years are identified according to the calendar year in which they begin.
For example, the fiscal year ended February 1, 1997 is referred to as "fiscal
1996."

RESULTS OF OPERATIONS

     Net revenue for the second quarter of fiscal 1997 increased 66.1% to $254.9
million from $153.5 million for the same period in fiscal 1996. Net revenue for
the first six months of fiscal 1997 increased 70.2% to $504.5 million from
$296.4 million for the same period in fiscal 1996. The increases in revenue were
primarily attributable to the acquisitions of Pearle and Sears Optical of Canada
in November 1996, which accounted for $81.7 and $167.2 million of the increases
for the second quarter and first six months, respectively. The Company's
consolidated comparable store sales increased 3.0% and 4.2% in the second
quarter and first six months of fiscal 1997, respectively. A second quarter
comparable store sales increase of 7.8% at Cole Vision was primarily a result of
successful eyewear promotions and growth in managed vision care sales. Second
quarter comparable store sales decreased 2.4% at Cole Gift, which was negatively
impacted by the lower levels of mall traffic. In the first quarter of fiscal
1997, the Company began classifying capitation and other fees associated with
its growing managed vision care business as revenue. Such fees are netted with
operating expenses in the fiscal 1996 financial statements. The opening of
additional Cole Gift and Cole Vision units also contributed to the second
quarter revenue increase. At August 2, 1997, the Company had 3,130 specialty
service retail locations, including 321 franchised locations, compared to 2,321
at August 3, 1996.

     Gross profit increased to $169.6 million in the second quarter of fiscal
1997 from $106.1 million in the same period last year. The gross profit increase
was primarily attributable to the addition of Pearle, increased revenue at Cole
Vision and the classification of managed vision care fees as revenue. Gross
margins for the second quarters of fiscal 1997 and fiscal 1996, respectively,
were 66.5% and 69.1%, respectively. For the first six months, gross profit
increased to $333.4 million from $204.5 million for the same period a year ago.
Gross margins for the first six months in fiscal 1997 and fiscal 1996 were 66.1%
and 69.0%, respectively. The lower gross margin percentages in fiscal 1997
resulted primarily from the addition of Pearle which operates at a

                                     -7-
<PAGE>   10

lower gross margin than the Company has historically experienced due to the
higher costs of in-store laboratories and lower margin wholesale sales to
franchised stores. This was partially offset by revenue generated by Pearle's
franchise royalties and fees, interest income on Pearle's franchise notes
receivable and the managed vision care fees, each of which has no corresponding
cost of goods sold.

     Operating expenses increased 60.9% to $141.2 million in the second quarter
of fiscal 1997 from $87.8 million in fiscal 1996, but as a percentage of
revenue, operating expenses decreased to 55.4% in fiscal 1997 from 57.2% in
fiscal 1996. For the first six months of fiscal 1997, operating expenses
increased 62.5% to $284.6 million from $175.2 million for the same period last
year. As a percentage of revenue, operating expenses for the first six months
decreased to 56.4% in fiscal 1997 from 59.1% in fiscal 1996. The leverage
improvement for the second quarter and first six months was primarily a result
of the addition of Pearle, which has lower operating expenses as a percentage of
revenue than the rest of the Company, along with leverage gains achieved by Cole
Vision's comparable store sales increase. Fiscal 1997 depreciation and
amortization expense of $7.3 million in the second quarter and $15.2 million in
the first six months was $3.0 and $6.6 million more, respectively, than the same
periods in fiscal 1996 reflecting the addition of Pearle and an increase in
capital expenditures.

     Income from operations increased 50.4% to $21.0 million for the second
quarter of fiscal 1997 and increased 61.8% to $33.6 million for the first six
months, primarily the result of the Pearle acquisition and strong sales growth
at Cole Vision, offset in part by softer sales performance at Cole Gift.

     Net interest expense increased $3.4 million over the second quarter of
fiscal 1996 to $8.2 million and increased $6.6 million over the first six months
of fiscal 1996 to $16.4 million. The increase was primarily attributable to the
additional interest on $150.0 million of 9-7/8% Senior Subordinated Notes (the
Existing Senior Subordinated Notes) issued in connection with financing the
Pearle acquisition, partially offset by a decrease in interest expense due to
the purchase and subsequent retirement of $15.1 million of Senior Notes in the
second quarter of fiscal 1996.

     An income tax provision was recorded in the first six months of fiscal 1997
and fiscal 1996 using the Company's estimated annual effective tax rate of 43%
and 44%, respectively.

     Net income increased to $7.4 million for the second quarter of fiscal 1997
from $4.5 million for the same period in fiscal 1996. For the first six months
of fiscal 1997, net income increased to $9.8 million from $5.5 million for that
period last year. The increases were due to improvement in income from
operations offset, in part, by the increase in net interest expense. A $0.7
million extraordinary loss, net of an income tax benefit of $0.5 million, was
recorded in the second quarter of fiscal 1996 in connection with the early
retirement of debt.

     The Company's business historically has been seasonal with approximately
30% of its revenue and approximately 50% of its income from operations occurring
in the fourth fiscal quarter because of the importance of gift sales during the


                                      -8-
<PAGE>   11

Christmas retailing season. Although the Pearle acquisition will moderate the
seasonality of the Company due to relatively lower levels of optical product
sales during the Christmas holiday season, the Company's business will remain
seasonal. Therefore, results of operations for interim periods are not
necessarily indicative of full year results.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary source of liquidity is funds provided from operations
of its operating subsidiaries. In addition, the Company's operating subsidiaries
have available to them working capital commitments of $75.0 million under their
Credit Facility, reduced by commitments under letters of credit.

     There were no working capital borrowings outstanding during the first six
months of fiscal 1997 and fiscal 1996.

     During the second quarter of fiscal 1997, the Company completed a public
offering of 2,587,500 shares of its Class A Common Stock at an offering price of
$47.00 per share. The Company intends to use the net proceeds of approximately
$116 million for general corporate purposes including reducing outstanding
indebtedness and financing possible future acquisitions including the
transactions described below.

     On August 5, 1997, the Company purchased, for an aggregate purchase price
of approximately $28.9 million, including debt assumed, all of the issued and
outstanding common stock of AVC. AVC consisted of 79 company-owned and 85
franchised optical retail stores. The Company anticipates that it will take a
non-recurring business integration charge in fiscal 1997. The acquisition will
be accounted for under the purchase method of accounting and the results of
AVC's operations will be included in the consolidated financial statements for
periods following the date of acquisition. For its most recent fiscal year ended
December 31, 1996, AVC reported annual net revenue of $52.5 million.

     In August 1997, CNG issued $125.0 million of 8-5/8% Senior Subordinated
Notes (the Senior Subordinated Notes) Due 2007. The net proceeds of the
issuance were approximately $121.7 million. CNG also commenced a tender offer
which  expired on September 12, 1997, to purchase up to all of its $165.8
million outstanding Senior Notes at $1,105.61 per $1,000 principal amount, plus
accrued interest thereon using the net proceeds of the Senior Subordinated
Notes issuance and cash on hand. A total of $150.9 million of Senior Notes were
tendered. As a  result, an extraordinary charge of up to $20.0 million will be
recorded in connection with the early extinguishment of debt, representing the
tender premium, the write-off of the related unamortized debt discount and
other costs associated with purchasing the Senior Notes. The issuance of the
Senior Subordinated Notes and the purchase of the Senior Notes are expected to
result in a reduction of interest expense of approximately $7.0 million
annually.

     Operations for the six months used $30.4 million of cash in fiscal 1997
compared to $17.7 million of cash provided from operations for the first six
months in fiscal 1996. The increase in cash used by operations was primarily
attributable to the payment of $15.0 million of taxes due on the sale of
Pearle's European operation, increased accounts receivable related to third

                                     -9-
<PAGE>   12

party optical sales, increased payments related to inventory disbursements, and
payment of certain business integration and other non-recurring charges accrued
in fiscal 1996, partially offset by an increase in net income and higher
depreciation and amortization expense.

     Cash used by investing activities included capital additions of $13.1
million and $8.6 million for the first six months of fiscal 1997 and fiscal
1996, respectively. The majority of capital expenditures were for store
fixtures, equipment and leasehold improvements for new stores and the remodeling
of existing stores. In addition, expenditures for systems development costs
increased to $7.0 million in the first six months of fiscal 1997 from $2.2
million for the same period last year, reflecting an increase in activity to
complete the Company's new systems implementation. Expenditures of $6.9 million
were also incurred in the first six months of fiscal 1997 in connection with the
construction of Cole Gift's new warehouse and distribution facility. This
facility, which became operational in the second quarter of fiscal 1997, will
most likely be financed through a sale and lease-back transaction in the third
quarter of fiscal 1997.

     The Company believes that funds provided from operations along with funds
available under the Credit Facility will provide adequate sources of liquidity
to allow the Company's operating subsidiaries to meet their operating needs and
to continue to expand the number of stores.

FORWARD-LOOKING INFORMATION

     Certain sections of this Form 10-Q contain forward-looking statements.
Forward-looking statements are made based upon management's expectations and
beliefs concerning future events impacting the Company. All forward-looking
statements involve risk and uncertainty.

     The Company operates in a highly competitive environment, and its future
liquidity, financial condition and operating results may be materially affected
by a variety of factors, some of which may be beyond the control of the Company,
including risks associated with the integration of Pearle, the Company's ability
to select and stock merchandise attractive to customers, economic and weather
factors affecting consumer spending, operating factors, including manufacturing
quality of optical and engraved goods, affecting customer satisfaction, the
Company's relationships with host stores and franchisees, the mix of goods sold,
pricing and other competitive factors, and the seasonality of the Company's
business.

                                      -10-
<PAGE>   13

                           PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES

     During the 26 weeks ended August 2, 1997, warrants to purchase unregistered
shares of the Company's Class A Common Stock were exercised by certain warrant
holders at a price of $24.70 per share. The dates of exercise, number of shares
issued and proceeds to the Company are as follows:
<TABLE>
<CAPTION>

                                 No.
                                Shares
    Date of Exercise            Issued               Proceeds
    ----------------            ------               --------
<S>                               <C>               <C>           
    March 5, 1997                 1,715             $       42,361
    April 3, 1997                 3,155                     77,928
    April 30, 1997                9,434                    233,020
    May 1, 1997                   1,774                     43,818
    May 2, 1997                   3,430                     84,721
    May 5, 1997                   1,588                     39,223
    May 6, 1997                  12,801                    316,185
    May 7, 1997                  56,492                  1,395,352
                                 ------             --------------
      Total                      90,389             $    2,232,608
</TABLE>

     The above-mentioned shares of common stock were issued pursuant to Section
4(2) of the Securities Exchange Act of 1933.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits. The following Exhibits are filed herewith and made a part hereof:

     4.1  Amendment No. 1, dated as of August 21, 1997, to the Rights Agreement,
          dated as of August 22, 1995, between the Company and National City
          Bank, as Rights Agent, incorporated by reference to Exhibit 4.1 of the
          Company's current report on Form 8-K, filed with the Securities and
          Exchange Commission of August 22, 1997 (File No. 1-12814).

     4.2  Indenture, dated August 22, 1997, between Cole National Group, Inc.
          and Norwest Bank Minnesota, National Association, as Trustee, relating
          to the 8-5/8% Senior Subordinated Notes Due 2007, incorporated by
          reference to Exhibit 4.4 of Cole National Group, Inc.'s Registration
          Statement on Form S-1 (Registration No. 333-34963).

     4.3  Registration Rights Agreement, dated August 22, 1997, between Cole
          National Group, Inc. and CIBC Wood Gundy Securities Corp., Credit
          Suisse First Boston Corporation and McDonald & Company Securities,
          Inc., incorporated by reference to Exhibit 4.5 of Cole National Group,
          Inc.'s Registration Statement on Form S-1 (Registration No.
          333-34963).

     4.4  First Supplemental Indenture, dated August 14, 1997, between Cole
          National Group, Inc. and Norwest Bank Minnesota, National Association,
          as Trustee, relating to the 11-1/4% Senior Notes Due 2001, 
          incorporated by reference to Exhibit 4.6 of Cole National Group, 
          Inc.'s Registration Statement on Form S-1 (Registration No. 
          333-34963).

                                      -11-
<PAGE>   14

     10.1 First Amendment to the Credit Agreement, dated as of January 13, 1997,
          among Cole Vision Corporation, Things Remembered, Inc., Cole Gift
          Centers, Inc., Pearle, Inc., and Pearle Service Corporation and
          Canadian Imperial Bank of Commerce, incorporated by reference to
          Exhibit 10.33 of Cole National Group, Inc.'s Registration Statement on
          Form S-1 (Registration No. 333-34963).

     10.2 Second Amendment to Credit Agreement, dated as of August 8, 1997,
          among Cole Vision Corporation, Things Remembered, In., Cole Gift
          Centers, Inc., Pearle, Inc. and Pearle Service Corporation and
          Canadian Imperial Bank of Commerce, incorporated by reference to
          Exhibit 10.34 of the Cole National Group, Inc.'s Registration
          Statement on Form S-1 (Registration No. 333-34963).

     10.3 Agreement, dated August 4, 1997, between the Company and Leslie D.
          Dunn regarding termination of employment, incorporated by reference to
          Exhibit 10.37 of Cole National Group, Inc.'s Registration Statement on
          Form S-1 (Registration No. 333-34963).

     10.4 Cole National Corporation amended and restated Non Qualified Stock
          Option Plan for Non Employee Directors, incorporated by reference to
          Exhibit A to Cole National Corporation's definitive Proxy Statement
          dated May 6, 1997 (File No. 1-12814).

     10.5 Form of Cole National Corporation Non Qualified Stock Option Agreement
          (Nonemployee Directors).

     10.6 Cole National Corporation Non Employee Director Equity and Deferred
          Compensation Plan, incorporated by reference to Exhibit B to Cole
          National Corporation's definitive Proxy Statement dated May 6, 1997
          (File No. 1-12814). 

     10.7 Form of Cole National Corporation Non Employee Director Equity and
          Deferred Compensation Plan Participation Agreement Plan Year 1997.

     27   Financial Data Schedule

(b) Reports on Form 8-K

    The Company has not filed any reports on Form 8-K for the quarterly period
    ended August 2, 1997.

                                      -12-
<PAGE>   15

                                    SIGNATURE

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

                               COLE NATIONAL CORPORATION

                               By:      /s/ Wayne L. Mosley
                                  --------------------------------------------
                                    Wayne L. Mosley
                                    Vice President and Controller
                                    (Duly Authorized Officer and Principal
                                    Accounting Officer)

                              Date:  September 15, 1997

                                      -13-
<PAGE>   16

                            COLE NATIONAL CORPORATION
                                    FORM 10-Q
                          QUARTER ENDED AUGUST 2, 1997

                                  EXHIBIT INDEX

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

     4.1  Amendment No. 1, dated as of August 21, 1997, to the Rights Agreement,
          dated as of August 22, 1995, between the Company and National City
          Bank, as Rights Agent, incorporated by reference to Exhibit 4.1 of
          the Company's Current Report on Form 8-K, filed with the Securities
          and Exchange Commission on August 22, 1997 (File No. 1-12814).

     4.2  Indenture, dated August 22, 1997, between Cole National Group, Inc.
          and Norwest Bank Minnesota, National Association, as Trustee, relating
          to the 8-5/8% Senior Subordinated Notes Due 2007, incorporated by
          reference to Exhibit 4.4 of Cole National Group, Inc.'s Registration
          Statement on Form S-1 (Registration No. 333-34963).

     4.3  Registration Rights Agreement, dated August 22, 1997, between Cole
          National Group, Inc. and CIBC Wood Gundy Securities Corp., Credit
          Suisse First Boston Corporation and McDonald & Company Securities,
          Inc., incorporated by reference to Exhibit 4.5 of Cole National Group,
          Inc.'s Registration Statement on Form S-1 (Registration No.
          333-34963).

     4.4  First Supplemental Indenture, dated August 14, 1997, between Cole
          National Group, Inc. and Norwest Bank Minnesota, National Association,
          as Trustee, relating to the 11-1/4% Senior Notes Due 2001,
          incorporated by reference to Exhibit 4.6 of Cole National Group,
          Inc.'s Registration Statement on Form S-1 (Registration No.
          333-34963).

     10.1 First Amendment to the Credit Agreement, dated as of January 13, 1997,
          among Cole Vision Corporation, Things Remembered, Inc., Cole Gift
          Centers, Inc., Pearle, Inc., and Pearle Service Corporation and
          Canadian Imperial Bank of Commerce, incorporated by reference to
          Exhibit 10.33 of Cole National Group, Inc.'s Registration Statement on
          Form S-1 (Registration No. 333-34963).

     10.2 Second Amendment to Credit Agreement, dated as of August 8, 1997,
          among Cole Vision Corporation, Things Remembered, In., Cole Gift
          Centers, Inc., Pearle, Inc. and Pearle Service Corporation and
          Canadian Imperial Bank of Commerce, incorporated by reference to
          Exhibit 10.34 of the Cole National Group, Inc.'s Registration
          Statement on Form S-1 (Registration No. 333-34963).

     10.3 Agreement, dated August 4, 1997, between the Company and Leslie D.
          Dunn regarding termination of employment, incorporated by reference to
          Exhibit 10.37 of Cole National Group, Inc.'s Registration Statement on
          Form S-1 (Registration No. 333-34963).

                                      -14-
<PAGE>   17

     10.4 Cole National Corporation amended and restated Non Qualified Stock
          Option Plan for Non Employee Directors, incorporated by reference to
          Exhibit A to Cole National Corporation's definitive Proxy Statement
          dated May 6, 1997 (File No. 1-12814).

     10.5 Form of Cole National Corporation Non Qualified Stock Option Agreement
          (Nonemployee Directors).

     10.6 Cole National Corporation Non Employee Director Equity and Deferred
          Compensation Plan, incorporated by reference to Exhibit B to Cole
          National Corporation's definitive Proxy Statement dated May 6, 1997
          (File No. 1-12814). 

     10.7 Form of Cole National Corporation Non Employee Director Equity and
          Deferred Compensation Plan Participation Agreement Plan Year 1997.

     27   Financial Data Schedule

                                      -15-