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

                UNITED STATES 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 and
       Exchange Act of 1934. For the period ended MARCH 31, 1998

                    or

[_]    Transition Report Pursuant to Section 13 or 15(d) of the Securities and
       Exchange Act of 1934. For the transition period from ______________ to 
       ______________


       Commission File Number 0-16611
                              -------


                              GLOBAL SPORTS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            DELAWARE                                     04-2958132
--------------------------------------------------------------------------------
  (State or other jurisdiction           (I.R.S. Employer Identification Number)
of incorporation or organization)


555 S. HENDERSON ROAD, KING OF PRUSSIA, PA                          19406
--------------------------------------------------------------------------------
  (Address of principal executive offices)                        (Zip Code)


                                  610-878-8600
--------------------------------------------------------------------------------
              (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.  Yes  x  No
                                               ---    ---


  Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 13, 1998:

     Common Stock, $.01 par value                              10,418,711
---------------------------------------                  -----------------------
        (Title of each class)                               (Number of Shares)



================================================================================
<PAGE>
 
                              GLOBAL SPORTS, INC.
                 FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1998
                               TABLE OF CONTENTS
--------------------------------------------------------------------------------



                                                                          Page
                                                                        --------
PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements:
         Independent Accountants' Report                                    3
         Condensed Consolidated Balance Sheets
           as of March 31, 1998 and December 31, 1997                       4
         Condensed Statements of Operations
           for the three-month periods ended March 31, 1998 and 1997        5
         Condensed Statements of Cash Flows
           for the three-month periods ended March 31, 1998 and 1997        6
         Notes to Condensed Financial Statements                          7 - 10
Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                       11 - 13
 
 
PART II - OTHER INFORMATION
Item 1.  Legal Proceedings                                                 14
Item 2.  Changes in Securities                                             14
Item 3.  Defaults on Senior Securities                                     14
Item 4.  Submission of Matters to a Vote of Security Holders               14
Item 5.  Other Information                                                 14
Item 6.  Exhibits and Reports on Form 8-K                                  14
Signatures                                                                 15


                                     - 2 -
<PAGE>
 
INDEPENDENT ACCOUNTANTS' REPORT

To the Shareholders and Board of Directors of Global Sports, Inc.

We have reviewed the accompanying condensed consolidated balance sheet of Global
Sports, Inc. and subsidiaries as of March 31, 1998, and the related condensed 
consolidated statements of income and of cash flows for the three-month period 
then ended. These financial statements are the responsibility of the Company's 
management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial 
information consists principally of applying analytical procedures to financial 
data and making inquiries of persons responsible for financial and accounting 
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the 
expression of an opinion regarding the financial statements taken as a whole. 
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should 
be made to such condensed consolidated financial statements for them to be in 
conformity with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing 
standards, the consolidated balance sheet of Global Sports Inc. and subsidiaries
as of December 31, 1997, and the related consolidated statements of income, 
stockholders' equity, and cash flows for the year then ended (not presented 
herein); and in our report dated March 27, 1998, we expressed an unqualified 
opinion on those consolidated financial statements. In our opinion, the 
information set forth in the accompanying condensed consolidated balance sheet 
as of December 31, 1997 is fairly stated, in all material respects, in relation 
to the consolidated balance sheet from which it has been derived.

/s/ Deloitte & Touche LLP
-------------------------
Deloitte & Touche LLP

Philadelphia, Pennsylvania
May 18, 1998

                                      -3-
<PAGE>
 
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS

                      GLOBAL SPORTS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                   MARCH 31,       DECEMBER 31,
                                                                                     1998              1997
                                                                                ---------------   ---------------  
                                                                                  (Unaudited)
<S>                                                                             <C>               <C> 
                                 ASSETS                               
                                                                      
Current assets:                                                       
 Cash and cash equivalents.................................................     $       995,582   $       98,881
 Accounts receivable, net of allowance for doubtful                                                
    accounts of $652,819 in 1998 and $743,223 in 1997......................          21,489,338        16,060,911
 Inventory.................................................................          17,825,322        16,906,171
 Prepaid expenses and other current assets.................................             718,554           933,548
                                                                                ---------------   ---------------   
    Total current assets...................................................          41,028,796        33,999,511
Property and equipment, net of accumulated depreciation                                           
 and amortization..........................................................           3,211,271         3,282,712
Goodwill and intangibles, net..............................................           5,991,784         6,147,282
Other assets...............................................................               8,257             2,404
                                                                                ---------------   ---------------    
    Total assets...........................................................     $    50,240,108   $    43,431,909
                                                                                ===============   =============== 
                                                                      
 LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                      
Current liabilities:                                                  
 Current portion - notes payable...........................................     $     2,000,000   $     2,000,000
 Current portion - capital lease obligation, related party.................             118,978           116,124
 Accounts payable and accrued expenses.....................................          18,877,132        16,114,305
 Subordinated note payable, related party..................................           2,114,798         2,068,652
                                                                                ---------------   ---------------    
    Total current liabilities..............................................          23,110,908        20,299,081
Capital lease obligation, related party and other liabilities..............           2,278,395         2,309,231
Notes payable..............................................................          21,157,292        18,666,248
Commitments and contingencies..............................................
Stockholders' equity:                                                 
 Preferred stock, $0.01 par value, 1,000,000 shares                   
    authorized; none issued................................................                 ---               ---
 Common stock, $0.01 par value, 20,000,000 shares
    authorized, 11,487,797 and 11,487,197 shares issued in 1998 and 1997;
    10,418,711 and 10,418,111 shares outstanding in 1998 and 1997..........             114,881           114,875
 Additional paid in capital................................................           8,003,046         8,001,132
 Cumulative translation adjustment.........................................             (32,849)          (35,520)
 Accumulated deficit.......................................................          (4,177,748)       (5,709,321)
                                                                                ---------------   ---------------    
                                                                                      3,907,330         2,371,166
 Less: Treasury stock, at cost.............................................             213,817           213,817
                                                                                ---------------   ---------------    
    Total stockholders' equity.............................................           3,693,513         2,157,349
                                                                                ---------------   ---------------    
    Total liabilities and stockholders' equity.............................     $    50,240,108   $    43,431,909
                                                                                ===============   =============== 
</TABLE>


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


                                     - 4 -
<PAGE>
 
                      GLOBAL SPORTS, INC. AND SUBSIDIARIES
                       CONDENSED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          Three Months Ended March 31,
                                                                       -----------------------------------
                                                                             1998              1997
                                                                       ----------------   ---------------- 
                                                                        (Consolidated)      (Combined)
<S>                                                                     <C>               <C>
Net sales...........................................................    $   28,148,378     $   11,520,900
                                                                       ----------------   ---------------- 
                                                             
Costs and expenses:                                          
  Cost of goods sold................................................        20,023,899          9,600,837
  Selling, general and administrative expense.......................         5,380,723          3,236,654
                                                                       ----------------   ---------------- 
Operating income (loss).............................................         2,743,756         (1,316,591)
                                                             
Other (income) expense:                                      
  Interest expense, net.............................................           619,271            331,452
  Other, net........................................................           (57,088)           (47,415)
                                                                       ----------------   ---------------- 
                                                                               562,183            284,037
                                                                       ----------------   ---------------- 
Income (loss) before equity in net loss of RYKA and income taxes....         2,181,573         (1,600,628)
Equity in net loss of RYKA Inc......................................                --             66,722
                                                                       ----------------   ---------------- 
Income (loss) before income taxes...................................         2,181,573         (1,667,350)
Provision for income taxes..........................................           650,000                 --
                                                                       ----------------   ---------------- 
Net income (loss)...................................................    $    1,531,573     $   (1,667,350)
                                                                       ================   ================ 
 
Basic earnings per share............................................    $          .15
                                                                       ================   
                                                               
Diluted earnings per share..........................................    $          .14
                                                                       ================   
 
Pro Forma Data: (See Note 5)
 
Loss before income taxes............................................                       $   (1,667,350)
Pro forma provision for income taxes................................                                   --
                                                                                          ---------------- 
Pro forma net loss..................................................                       $   (1,667,350)
                                                                                          ================  
Pro forma basic losses per share....................................                       $         (.59)
                                                                                          ================  
Pro forma diluted losses per share..................................                       $         (.59)
                                                                                          ================  
</TABLE>


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


                                     - 5 -
<PAGE>
 
                      GLOBAL SPORTS, INC. AND SUBSIDIARIES
                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED
                                                                                  MARCH 31,
                                                                      ----------------------------------
                                                                            1998              1997
                                                                      ---------------    ---------------
                                                                        CONSOLIDATED        COMBINED
<S>                                                                   <C>                  <C>
Cash Flows from Operating Activities:                       
  Net income (loss)...............................................     $   1,531,573       (1,667,350)
  Adjustments to reconcile net income (loss) to net cash     
     used in operating activities:                             
        Depreciation and amortization.............................           272,388          108,346
        Provision for losses on accounts receivable...............          (175,077)          58,490
        Equity in undistributed net loss of RYKA Inc..............              --             66,721
        Changes in operating assets and liabilities:             
            Accounts receivable...................................        (5,253,350)         187,679
            Inventory.............................................          (919,151)       1,830,672
            Prepaid expenses and other current assets.............           214,994          116,221
            Other assets..........................................            40,293         (127,365)
            Accounts payable and accrued expenses.................         2,762,827       (2,513,274)
                                                                      ---------------    ---------------
                                                            
            Net cash used in operating activities.................        (1,525,503)      (1,939,860)
                                                                      ---------------    ---------------
                                                            
Cash Flows from Investing Activities:                       
     Capital expenditures.........................................           (45,449)        (207,808)
                                                                      ---------------    ---------------
                                                            
            Net cash used in investing activities.................           (45,449)        (207,808)
                                                                      ---------------    ---------------
                                                            
Cash Flows from Financing Activities:                       
     Net borrowings under line of credit..........................         2,491,044        1,787,376
     Repayment of capital lease obligation........................           (27,982)         (27,127)
     Proceeds from issuance of common stock.......................             1,920              --
     Proceeds from issuance of subordinated debt..................               --            90,000
                                                                      ---------------    ---------------
                                                            
            Net cash provided by financing activities.............         2,464,982        1,850,249
                                                                      ---------------    ---------------
                                                            
Effect of exchange rate on cash and cash equivalents..............             2,671           25,414
                                                                      ---------------    ---------------
                                                            
Net increase (decrease) in cash and cash equivalents..............           896,701         (272,005)
                                                            
Cash and cash equivalents, beginning of period....................            98,881          275,871
                                                                      ---------------    ---------------
                                                            
Cash and cash equivalents, end of period..........................     $     995,582            3,866
                                                                      ===============    =============== 
</TABLE>


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


                                     - 6 -
<PAGE>
 
                     GLOBAL SPORTS, INC. AND SUBSIDIARIES
                         NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1 - BASIS OF PRESENTATION

Global Sports, Inc. ("Global" or the "Company"), a Delaware corporation,
designs, develops and markets branded footwear under the RYKA, Yukon and Apex
brand names as well as distributes off price athletic footwear, apparel and
sporting goods worldwide, with primary distribution in the United States.

On December 15, 1997, the Company consummated a Second Amended and Restated
Agreement and Plan of Reorganization, as amended, among RYKA Inc. ("RYKA"), KPR
Sports International, Inc. ("KPR"), Apex Sports International, Inc., MR
Management, Inc. (the last three companies collectively referred to as the "KPR
Companies"),  and Michael G. Rubin, the Chairman and Chief Executive Officer of
the Company, which provided for, among other things, the reorganization (the
"Reorganization") of RYKA and the KPR Companies, primarily as follows: (i) RYKA
was renamed Global Sports, Inc. (ii) the transfer by RYKA to RYKA Sub, Inc.
("RYKA Sub"), of all of the assets and liabilities of RYKA in exchange for all
of the issued and outstanding capital stock of RYKA Sub, (iii) the merger of KPR
Acquisitions, Inc., with and into KPR, with KPR surviving the merger as a 
wholly-owned subsidiary of the Company, (iv) the acquisition by the Company of
all of the issued and outstanding shares of capital stock of Apex and Management
and (v) the issuance to Michael G. Rubin, the sole stockholder of the KPR
Companies, of an aggregate of 8,169,086 new shares of common stock (after giving
effect to the 1-for-20 reverse stock split) in exchange for his shares of common
stock of the KPR Companies and the KPR Companies' holdings of the common stock
of RYKA. RYKA Sub subsequently changed its name to RYKA Inc. after the
Reorganization.

After the Reorganization, Mr. Rubin, the former sole shareholder of the KPR
Companies, now owns approximately 78.4% of the outstanding voting power of the
Company. Accordingly, the Reorganization has been accounted for as a reverse
purchase under generally accepted accounting principles pursuant to which the
KPR Companies are considered to be the acquiring entity and the Company is the
acquired entity for accounting purposes, even though the Company is the
surviving legal entity. As a result of this reverse purchase accounting
treatment, (i) the historical financial statements of the Company for periods
prior to the date of the Reorganization are no longer the historical financial
statements of the Company, and therefore, are no longer presented; (ii) the
historical financial statements of the Company for periods prior to the date of
the Reorganization are those of the KPR Companies, (iii) all references to the
financial statements of the Company apply to the historical financial statements
of the KPR Companies prior to and subsequent to the Reorganization, and (iv) any
references to RYKA apply solely to that company and its financial statements
prior to the Reorganization.

The accompanying condensed financial statements of Global have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in accordance with the instructions for Form 10-Q and Rule 10-01
of Regulation S-X.  Accordingly, they do not include all information and
footnotes required by generally accepted accounting principles for complete
financial statements.

The accompanying financial information is unaudited; however, in the opinion of
the Company's management, all adjustments (consisting solely of normal recurring
accruals) necessary for a fair presentation of the operating results of the
periods reported have been included. The results of operations for the periods
reported are not necessarily indicative of those that may be expected for a full
year.

This quarterly report should be read in conjunction with the financial
statements and notes thereto included  in the Company's audited financial
statements as of December 31, 1997 as presented in the Company's Annual Report
on Form 10-K.


                                     - 7 -
<PAGE>
 
                     GLOBAL SPORTS, INC. AND SUBSIDIARIES
                         NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 2 - PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information shows the results of the
Company's operations for the three month period ended March 31, 1997 as if the
Reorganization (see Note 1) had occurred on January 1, 1997.  Adjustments have
been made to record the amortization of goodwill and intangibles, to eliminate
intercompany rental charges, to record interest expense on the post-
Reorganization subordinated debt and to eliminate the KPR Companies' equity in
the net losses of RYKA recorded prior to the Reorganization.  All share and per
share information has been adjusted as if the 1-for-20 reverse stock split and
the issuance of 7,100,000 shares of the Company's common stock, both of which
were effected at the Reorganization, had also occurred on January, 1, 1997.  The
pro forma information does not purport to be indicative of the Company's results
of operations had the Reorganization actually occurred on that date nor is it
necessarily indicative of future operating results.


                                                               Three Months
                                                                   Ended
                                                               March 31, 1997
                                                              ----------------

        Net sales..........................................    $   14,104,998
                                                              ---------------- 
        Costs and expenses:                          
         Cost of goods sold................................        11,310,632
         Selling, general and administrative expense.......         4,388,173
                                                              ----------------
        Operating loss.....................................        (1,593,807)
        Other expense, net.................................           573,001
                                                              ----------------
        Loss before income taxes...........................        (2,166,808)
        Provision for income taxes.........................               ---
                                                              ----------------
        Net loss...........................................    $   (2,166,808)
                                                              ================
                                                    
        Losses per share-basic and diluted.................    $         (.22)
                                                              ================
                                                    
        Weighted average common and common equivalent
         shares outstanding-basic and diluted..............         9,852,877
                                                              ================
 

NOTE 3 - NOTE PAYABLE

On November 20, 1997, the KPR Companies and RYKA entered into a Loan and
Security Agreement (the "Loan Agreement") with a new lender pursuant to which
their prior lender was repaid in full on November 21, 1997.  Under the Loan
Agreement, as amended, the Company has access to a combined credit facility of
$30,000,000, which is comprised of the KPR Companies' credit facility of
$25,000,000 and RYKA's credit facility of $5,000,000. The term of the Loan
Agreement is five years. At March 31, 1998, the Company has classified
$2,000,000 of the amount outstanding as a current liability based on the
Company's expectation of the amounts which will be satisfied within the next
year. The KPR Companies and RYKA have an interest rate choice of prime plus 1/4%
or LIBOR (Adjusted Eurodollar Rate) plus two hundred seventy-five basis points
(8 3/4% at December 31, 1997 and March 31, 1998). 

Under the Loan Agreement, both the KPR Companies and RYKA may borrow up to the
amount of their revolving line based upon 85% of their eligible accounts
receivable and 65% of their eligible inventory, as those terms are defined in
the Loan Agreement.  The Loan Agreement also includes 50% of outstanding letters
of credit as collateral for borrowing.


                                     - 8 -
<PAGE>
 
                     GLOBAL SPORTS, INC. AND SUBSIDIARIES
                         NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

In addition to the revolving lines of credit described above, provided that 80%
of their orders are pre-sold, the new lender will over-advance to the Company a
combined additional total of $3,000,000, comprised of the KPR Companies'
additional $2,000,000 and  RYKA's additional $1,000,000, over the collateral for
additional letters of credit needed for seasonal production of new merchandise
for the Fall 1998, Spring 1999 and Fall 1999 seasons.

The total interest incurred in connection with this facility in 1998 was
$496,731. Closing and other fees incurred at the inception of the new facilities
in the amount of approximately $266,000 have been included on the balance sheet
and are being amortized over the term of the Loan Agreement.  As of March 31,
1998, the unamortized balance of such fees was $248,550.  The total available
credit under the combined facilities was $891,117 at March 31, 1998.

NOTE 4 - RELATED PARTY

The Company is located in King of Prussia, Pennsylvania where it conducts its
operations and warehouses inventory in a facility leased from the Company's
Chairman and CEO. The lease has been accounted for as a capital lease, which
resulted in $58,892 recorded to interest expense for the three months ended
March 31, 1998. At March 31, 1998, the Company's investment in the capital lease
was $2,397,372, which is included in property and equipment.

At March 31, 1998, the Company had $2,114,798 in subordinated notes payable held
by its Chairman and CEO, which included accrued interest on such notes of
$58,957.  This debt consisted primarily of a note representing undistributed sub
chapter S corporation retained earnings previously taxed to him as the sole
shareholder of the KPR Companies prior to the Reorganization (see Note 1).
Interest accrues on such notes at a choice of prime plus  1/4% or LIBOR
(Adjusted Eurodollar Rate) plus two hundred seventy-five basis points.  The
interest rate at March 31, 1998 was 8 3/4%.  Based on its Loan Agreement (see
Note 3), the Company is permitted to make continued regular payments of interest
on the subordinated debt and to further reduce principal on a quarterly basis,
commencing subsequent to the first quarter of 1998, in an amount up to 50% of
the cumulative consolidated net income of the Company.


                                     - 9 -
<PAGE>
 
                     GLOBAL SPORTS, INC. AND SUBSIDIARIES
                         NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 5 - EARNINGS (LOSSES) PER SHARE

Earnings (losses) per share for all periods have been computed in accordance
with SFAS No. 128, Earnings Per Share. Basic earnings (losses) per share is
computed by dividing net income (loss) by the weighted average number of shares
of common stock outstanding during the year. Diluted earnings (losses) per share
is computed by dividing the net income (loss) by the weighted average number of
shares outstanding during the year, assuming dilution by outstanding common
stock options and warrants.

Pro forma basic earnings (losses) per share represents pro forma net income
(loss) (after a pro forma provision for income taxes in 1997 as if the Company
had been subject to federal and state income taxation as a C corporation since
inception) divided by the weighted average number of common shares outstanding
during the period. Pro forma diluted earnings (losses) per share is computed by
dividing pro forma net income (loss) by the weighted average number of common
shares outstanding during the period, assuming dilution by outstanding common
stock options and warrants.

The amounts used in calculating earnings (losses) per share data are as follows:


                                                      THREE MONTHS ENDED
                                                           MARCH 31,
                                               --------------------------------
                                                    1998             1997
                                               ---------------  ---------------
 
  Net income.................................  $     1,531,573
                                               ===============  
  Pro forma net loss.........................                   $   (1,667,350)
                                                                ===============
  Weighted average shares
     outstanding - basic.....................       10,418,198        2,831,766
                                               ===============  =============== 
  Weighted average shares
     outstanding - diluted...................       10,574,658        2,831,766
                                               ===============  =============== 
  Outstanding common stock options having no
    dilutive effect..........................          205,675          225,113
                                               ===============  =============== 
  Outstanding common stock warrants having no
    dilutive effect..........................          203,034          106,186
                                               ===============  =============== 


The Company's pro forma net loss in 1997 results in an antidilutive effect in
the calculation of pro forma diluted earnings (losses) per share.

NOTE 6 - CONTINGENCIES

As of March 31, 1998, outstanding purchase commitments exist totaling
$3,466,456, for which commercial letters of credit have been issued.

NOTE 7 - COMPREHENSIVE INCOME

Comprehensive income for the three month periods ended March 31, 1998 and 1997
was as follows:

                                                        1998            1997
                                                        ----            ----
Net income (loss)                                   $1,531,573      $(1,667,350)
Foreign currency translation adjustment                  2,671           25,414
                                                     ---------       ----------
Comprehensive income (loss)                         $1,534,244      $(1,641,936)
                                                     =========       ==========

NOTE 8 - ACQUISITION

Effective May 12, 1998, the Company acquired Gen-X Holdings, Inc. and Gen-X
Equipment, Inc. (collectively, the "Gen-X Companies"). The Gen-X Companies are
privately-held companies based in Toronto, Ontario specializing in selling off-
price sporting goods and winter sports equipment (including ski and snowboard
equipment), in-line skates, sunglasses, skateboards and specialty footwear. For
the year ended September 30, 1997, the Gen-X Companies had revenues of
approximately $31 million and net income of $2 million. In consideration for
acquiring the stock of Gen-X Holdings, Inc and its wholly-owned subsidiaries,
the Company issued 1.5 million shares of its common stock (valued at
approximately $10.5 million based on the current market price at May 12, 1998)
and contingent consideration in the form of noninterest-bearing notes and shares
of mandatorily redeemable preferred stock in the aggregate amount of $5 million.
The notes and shares are payable or redeemable at $1 million per year over a
five-year period upon achieving certain sales and gross profit targets. The
acquisition will be accounted for as a purchase and the Company is currently
analyzing the purchase price allocation.

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

FORWARD LOOKING STATEMENTS

Certain information contained in this Form 10-Q contains forward looking
statements (as such term is defined in the Securities Exchange Act of 1934 and
the regulations thereunder), including without limitation, statements as to the
Company's financial condition, results of operations and liquidity and capital
resources and statements as to management's beliefs, expectations or options.
Such forward looking statements are subject to risks and uncertainties and may
be affected by various factors which may cause actual results to differ
materially from those in the forward looking statements. Certain of these risks,
uncertainties and other factors, as and when applicable, are discussed in the
Company's filings with the Securities and Exchange Commission, including its
most recent Form 10-K, a copy of which may be obtained from the Company upon
request and without charge (except for the exhibits thereto).

GENERAL OVERVIEW

On December 15, 1997, the Company consummated the Reorganization.  As a result,
Mr. Rubin, as sole shareholder of the KPR Companies, received RYKA shares which
gave him voting control over the combined companies.  Accordingly, for
accounting purposes, the KPR Companies are considered the continuing entity and
the transaction has been accounted for as a Reorganization of the KPR Companies
followed by the issuance of new shares of common stock of the KPR Companies for
the net assets of RYKA. The Reorganization affects comparability of first
quarter 1998 results with reported results for the comparable 1997 periods.  A
more meaningful analysis can be made by comparing 1998 results with the 1997 pro
forma results appearing in Note 2, "Pro Forma Financial Information" on page 7
in the Notes to Financial Statements.  The 1997 pro forma information does not
purport to be indicative of the Company's results of operations had the
transactions described above actually occurred on the dates presented nor is it
necessarily indicative of future operating results.  The 1997 pro forma
information does not include the effects of cost savings and sales synergies
expected to be realized as a result of the Reorganization.  The following
"Results of Operations" discussion describes the comparison of the first quarter
period of 1998 to the comparable 1997 period on a pro forma basis, unless
otherwise noted.

RESULTS OF OPERATIONS  (THREE MONTHS ENDED MARCH 31, 1998 VERSUS COMPARABLE 1997
PERIOD ON A PRO FORMA BASIS)

The following table sets forth, for the periods indicated, the relative
percentages that certain items in the Company's Statements of Operations bear to
net sales:
<TABLE> 
<CAPTION> 
                                                                         
                                                                               THREE MONTHS ENDED MARCH 31,
                                                      ----------------------------------------------------------------------------
                                                               1998                     1997                     1997
                                                      ----------------------------------------------------------------------------
                                                                                     (Pro Forma)                (Actual)
   <S>                                                <C>          <C>         <C>           <C>          <C>           <C>    
   Net sales.......................................  $28,148,378      100.0%   $14,104,998       100.0%   $11,520,900     100.0%    
                                                      ----------   ----------   ----------    ----------   ----------   ---------- 
   Cost and expenses:                                                                                                             
      Cost of goods sold...........................   20,023,899       71.1     11,310,632        80.2      9,600,837      83.3   
      Selling, general and administrative                                                                                         
        expense....................................    5,380,723       19.1      4,388,173        31.1      3,236,654      28.1   
                                                      ----------   ----------   ----------    ----------   ----------   ---------- 
   Operating income (loss).........................    2,743,756        9.8     (1,593,807)      (11.3)    (1,316,591)    (11.4)   
   Other expense, net..............................      562,183        2.0        573,001         4.1        350,759       3.1   
                                                      ----------   ----------   ----------    ----------   ----------   ----------
   Net income (loss) before income taxes...........    2,181,573        7.8     (2,166,808)      (15.4)    (1,667,350)    (14.5)   
   Provision for income taxes......................      650,000        2.3             --          --             --        --   
                                                      ----------   ----------   ----------    ----------   ----------   ----------
   Net income (loss)...............................  $ 1,531,573        5.5%   $(2,166,808)      (15.4)%  $(1,667,350)    (14.5)%   
                                                      ==========   ==========   ==========    ==========   ==========   ==========  
</TABLE> 

                                    - 11 -
<PAGE>
 
Net Sales

Net sales for the first quarter of 1998 increased by $14,043,381, or 99.6%, over
the same period on a pro forma basis in 1997. This sales increase was primarily
attributable to certain opportunistic purchases by the Company's Off-Price
Division during the first quarter of 1998. There is no assurance that such
opportunities will reoccur in the future.

Cost of Goods Sold/Gross Margin

Cost of goods sold for the first quarter of 1998 increased by $8,713,267, or
77.0%, over the same period on a pro forma basis in 1997.  Overall gross margin
(as a percentage of net sales) increased in the first quarter of  1998 to 28.9%
from 19.8% in the same period on a pro forma basis in 1997. The first quarter of
1997 on a pro forma basis experienced unusually low gross margins as a result of
the lack of substantial off-price purchases and management's desire to reduce 
off-price inventories.

Selling, General and Administrative Expense

Selling, general and administrative expense for the first quarter of 1998
increased by $992,550, or 22.6%, over the same period on a pro forma basis in
1997. This increase was primarily due to (1) an increase in direct, point-of-
purchase and retailer cooperative advertising expense of approximately $585,000
for new programs developed to promote the Yukon and RYKA brands, and (2) an
increase in third-party warehousing and distribution costs of approximately
$476,000 to support higher inventory levels. The Company is currently analyzing
the cost and distribution efficiency of its warehousing structure and plans on
reducing the number of third-party warehousing facilities in the first half of
1998, which will result in storage cost savings.

Other Expense, Net

Other expense, net for the first quarter of 1998 decreased by $10,818, or 1.9%,
over the same period on a pro forma basis in 1997 primarily as a result of
decreased costs related to the Reorganization and prior year financing issues
offset almost entirely by increased interest expense related to higher debt
levels.

Net Income (Loss)

Net income (loss) for the first quarter of 1998 increased $3,698,381 over the 
same period on a pro forma basis in 1997. This increase was partially offset by 
a $650,000 provision for income taxes recorded in the first quarter of 1998. The
Company's effective income tax rate for the current quarter is approximately 
30%, which includes the effect of approximately $500,000 of net operating loss 
carryforwards from prior years as a result of RYKA's operating losses incurred 
prior to the Reorganization.

                                    - 12 -
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES

Prior to the Reorganization, the operations of the KPR Companies had been
financed by a combination of internally generated resources and annual increases
in the size of the bank credit facility and the operations of RYKA were financed
by equity transactions, subordinated borrowings and annual increases in the size
of RYKA's bank credit facility. Increases in the bank credit facilities for the
KPR Companies and RYKA were required to fund the Company's increased investment
in accounts receivable and inventory necessary to support the increases in
revenue. As of March 31, 1998, the Company had a working capital of $17,917,888.
The Company used $1,525,503 in cash flows from operating activities for the
quarter ended March 31, 1998, whereas in the same period of the prior year the
Company used $1,939,860 in cash flows from operating activities.

On November 20, 1997, the KPR Companies and RYKA entered into the Loan Agreement
with a new lender pursuant to which their prior lender was repaid in full on
November 21, 1997.  Under the Loan Agreement, the Company has access to a
combined credit facility of $25,000,000, which is comprised of the KPR
Companies' credit facility of $20,000,000 and RYKA's credit facility of
$5,000,000.  The term of the Loan Agreement is five years.  The KPR Companies
and RYKA have an interest rate choice of prime plus  1/4% or LIBOR (Adjusted
Eurodollar Rate) plus two hundred seventy-five basis points.  The Company's
credit facility was subsequently increased to $30,000,000 on February 20, 1998
by increasing the line of credit available to the KPR Companies to $25,000,000.

Under this new credit facility, both the KPR Companies and RYKA may borrow up to
the amount of their revolving line based upon 85% of their eligible accounts
receivable and 65% of their eligible inventory, as those terms are defined in
the Loan Agreement.

In addition to the revolving lines of credit described above, provided that 80%
of their orders are pre-sold, the new lender will over-advance to the Company a
combined additional total of $3,000,000, comprised of the KPR Company's
additional $2,000,000 and RYKA's additional $1,000,000 over the collateral for
additional letters of credit needed for seasonal production of new merchandise
for the Fall 1998, Spring 1999 and Fall 1999 seasons.

As of the closing of the Loan Agreement, the KPR Companies owed Michael Rubin
subordinated debt of $3,055,841 which is comprised of (i) a loan from Mr. Rubin
to the KPR Companies in the principal amount of $851,440, plus accrued and
unpaid interest on such loan of $180,517 through October 31, 1997 and (ii) a
note in the principal amount of $2,204,401 representing undistributed  sub
chapter S corporation retained earnings previously taxed to Mr. Rubin as the
sole shareholder of the KPR Companies.  No interest accrued on the note
representing sub chapter S corporation earnings until December 15, 1997, the
effective date of the Reorganization, at which time the interest  began to
accrue on such note at a choice of prime plus 1/4% or LIBOR (Adjusted Eurodollar
Rate) plus two hundred seventy-five basis points.

The Loan Agreement and the related Subordination Agreement allowed the Company
to repay Mr. Rubin $1,000,000 of the subordinated debt principal and the accrued
interest of $180,517 at the time of the closing of the Loan Agreement or within
five days thereafter, subject to there being $2,000,000 of availability under
the KPR Companies' credit line after taking into account such payments. Such
payments were made to Mr. Rubin in November 26, 1997.

In addition, the Loan Agreement and the Subordination Agreement permit the KPR
Companies to make continued regular payments of interest on the subordinated
debt and to further reduce principal on a quarterly basis, commencing with the
first quarter of 1998, in an amount up to 50% of the cumulative consolidated net
income of both borrowers, reduced by net losses of the borrowers during such
period.

Management believes that they have adequate financing to allow the Company to
continue its operations, meet its obligations as they mature, and comply with
its debt covenants (as amended March 27, 1998) during the foreseeable future. In
addition, the Company is currently exploring various alternatives to raising
additional equity.

                                    - 13 -
<PAGE>
 
PART II - OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

              Not Applicable.

ITEM 2.       CHANGES IN SECURITIES

              Not Applicable.

ITEM 3.       DEFAULTS ON SENIOR SECURITIES

              Not Applicable.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
              Not Applicable.
 
ITEM 5.       OTHER INFORMATION

              Not Applicable.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

  (a)         Exhibits
 
  10.40       Amended and Restated Loan and Security Agreement dated December
              15, 1997 by and among KPR Sports International, Inc., RYKA Inc.
              and Foothill Capital Corporation.
  10.40-A     Amendment No. 1 to the Amended and Restated Loan and Security
              Agreement dated December 15, 1997 by and among KPR Sports
              International, Inc., RYKA Inc. and Foothill Capital Corporation.
  10.40-B     Consent, Amendment No. 2 to the Loan Documents and waiver as to
              certain events of default by and among KPR Sports International,
              Inc., RYKA Inc. and Foothill Capital Corporation.
  10.41       Continuing Guaranty dated December 15, 1997 in favor of Foothill
              Capital Corporation.
  10.42       General Security Agreement dated December 15, 1997 in favor of
              Foothill Capital Corporation.
  10.50       Deferred Profit-Sharing Plan and Trust.
  15.1        Letter in Lieu of Consent Regarding Review Report of Unaudited 
              Interim Financial Information.
  27.1        Restated financial data schedule for the quarter ended March 31,
              1995 (electronic filing only).
  27.2        Restated financial data schedule for the quarter ended June 30,
              1995 (electronic filing only).
  27.3        Restated financial data schedule for the quarter ending September
              30, 1995 (electronic filing only).
  27.4        Restated financial data schedule for the year ended December 31,
              1995 (electronic filing only).
  27.5        Restated financial data schedule for the quarter ended March 31,
              1996 (electronic filing only).
  27.6        Restated financial data schedule for the quarter ended June 30,
              1996 (electronic filing only).
  27.7        Restated financial data schedule for the quarter ended September
              30, 1996 (electronic filing only).
  27.8        Restated financial data schedule for the year ended December 31,
              1996 (electronic filing only).
  27.9        Restated financial data schedule for the quarter ended March 31,
              1997 (electronic filing only).
  27.10       Restated financial data schedule for the quarter ended June 30,
              1997 (electronic filing only).
  27.11       Restated financial data schedule for the quarter ended September
              30, 1997 (electronic filing only).
  27.12       Financial data schedule for the quarter ended March 31, 1998
              (electronic filing only).

  (b)         Reports on Form 8-K

              The Company filed a Current Report on Form 8-K/A (Amendment to
              Form 8-K dated December 15, 1997) on February 13, 1998 containing
              KPR Sports International, Inc. and Affiliates historical financial
              statements and Company pro forma financial information.

                                    - 14 -
<PAGE>
 
                                   SIGNATURES



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, hereunto duly authorized.


     
                                        GLOBAL SPORTS, INC.


DATE:   May 20, 1998                    By:        /s/ Michael G. Rubin
                                           ------------------------------------
                                                       Michael G. Rubin
                                                     Chairman of the Board &
                                                      Chief Executive Officer



DATE:   May 20, 1998                    By:         /s/ Steven A. Wolf
                                           ------------------------------------
                                                         Steven A. Wolf
                                                     Chief Financial Officer




                                    - 15 -