SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
 

                                    FORM 10-Q

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 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 0-1282-3

                             Swiss Army Brands, Inc.
             (Exact name of registrant as specified in its charter)
 
 
                               Delaware 13-2797726
          (State of incorporation) (I.R.S. Employer Identification No.)

                 One Research Drive, Shelton, Connecticut 06484
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (203) 929-6391

                                 NOT APPLICABLE
      (Former name, former address and former fiscal year, if changed since
                                 last report.)

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

The number of shares of Issuer's  Common Stock,  $.10 par value,  outstanding on
November 10, 1997, was 8,209,610 shares.



<PAGE>
 

                             SWISS ARMY BRANDS, INC.
                                AND SUBSIDIARIES
                                      INDEX
<TABLE>
<CAPTION>


PART I:       FINANCIAL INFORMATION                               Page No.
<S>          <C>                                                 <C>

Item 1.       FINANCIAL STATEMENTS

              Consolidated Balance Sheets as of
              September  30, 1997 and December 31, 1996.          3 - 4

              Consolidated Statements of Operations for the
              Three and Nine Months Ended September 30, 1997 
              and 1996.                                               5

              Consolidated Statements of Stockholders= Equity
              for the Nine Months Ended September 30, 1997
              and 1996.                                               6

              Consolidated Statements of Cash Flows for the
              Nine Months Ended September 30, 1997 and 1996.          7

              Notes to Consolidated Financial Statements          8 - 9


Item 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS
              OF FINANCIAL CONDITION AND RESULTS OF
              OPERATIONS                                        10 - 12

Part II:      OTHER INFORMATION

Item 6.       EXHIBITS AND REPORTS ON FORM 8-K                       13

Signatures                                                           13

The Exhibit Index appears on page 13.

</TABLE>

                                       2
 
<PAGE>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
                                     Assets
<TABLE>
<CAPTION>



                                                September 30,     December 31,
                                                   1997               1996    
                                                 (unaudited)
<S>                                            <C>               <C>


Current assets:
   Cash and cash equivalents .................    $    861           $2,067

   Accounts receivable, less
    allowance for doubtful accounts
    of $994 and $1,032 respectively...........      22,944           32,992
   Inventories................................      35,779           29,657
   Deferred income taxes......................       3,295            3,295
   Prepaid and other..........................       4,712            2,922
                                                  ---------       -----------
   Total current assets.......................      67,591           70,933


Deferred income taxes.........................       1,597            1,597
Property, plant and equipment, net............       3,791            3,969

Investment in preferred units, at cost........       8,850            9,003
Investment in unconsolidated affiliate........         150              150

Foreign distribution rights, net of
   accumulated amortization of $3,022
   and $2,518 respectively....................       3,720            4,226

Other assets, net of accumulated
   amortization of $1,068 and
   $496 respectively..........................       9,399            8,765
                                                  ---------        ----------
Total Assets                                       $95,098          $98,643
                                                  =========        ==========

</TABLE>
                                       3

<PAGE>


 
                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

                      Liabilities and Stockholders' Equity
<TABLE>
<CAPTION>


                                             September 30,       December 31,
                                                 1997                1996     
                                              (unaudited) 
<S>                                         <C>                 <C>

Current liabilities:
   Accounts payable.......................    $   8,548              $10,952
   Accrued liabilities....................        7,880                7,835
   Line of credit.........................        1,630                 --
                                               ---------            ---------
   Total current liabilities..............       18,058               18,787

Commitments and contingencies

Stockholders' equity:                                         
Preferred stock, par value $.10 per share: 
shares authorized 2,000,000; no shares issued       --                  --
                                                              

Common stock, par value $.10 per
share: shares authorized -
18,000,000; shares issued -
8,823,718 and 8,822,968, respectively.....          882                  882

Additional paid-in capital................       46,186               46,182

Foreign currency translation adjustment...         (144)                (113)

Retained earnings.........................       35,229               38,018
                                                --------             --------
                                                 82,153               84,969

Less-cost of common stock in
treasury; 614,108 shares..................       (5,113)              (5,113)
                                                --------             --------
Total stockholders' equity................       77,040               79,856
                                                --------             --------
Total Liabilities and Stockholders' Equity      $95,098              $98,643 
                                               =========            ========= 
</TABLE>
                                       4
<PAGE>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except share and per share data)
                                   (unaudited)

<TABLE>
<CAPTION>


                                   Three Months Ended       Nine Months Ended
                                     September 30,             September 30,
                                   1997        1996          1997        1996
<S>                             <C>          <C>          <C>         <C>


Net sales.....................   $27,866      $34,616      $80,943     $89,372

Cost of sales.................    17,270       22,620       51,019      63,394
                                ---------    ---------    ---------   ---------

Gross profit..................    10,596       11,996       29,924      25,978

Selling, general and administrative
expenses......................    12,160       10,828       35,095      29,537

Special charges...............       --           --           --        2,073
                                ---------    ---------    ---------   ---------

Operating income (loss).......    (1,564)       1,168       (5,171)     (5,632)

Interest income (expense), net        24          (56)         136           3

Gain (loss) on sale (write-down) of    
investments...................       285          --           395        (789)
                                                                            

Other income (expense), net...         5           28            4         145
                                ---------    ----------   ---------    --------

Total interest and other 
income,net....................       314          (28)         535        (641)
                                ---------    ----------   ---------    --------
Income (loss) before income 
taxes.........................    (1,250)       1,140       (4,636)     (6,273)

Income tax provision (benefit)      (475)         498       (1,847)     (2,613)
                                ---------    ----------   ---------   ---------
Net income (loss).............     ($775)        $642      ($2,789)    ($3,660)
                                =========    ==========   =========   =========
Net income (loss) per share...    ($0.09)       $0.08       ($0.34)     ($0.45)
                                =========    ==========   =========   =========
Weighted average number of
   shares outstanding......... 8,209,610    8,334,166    8,209,431   8,199,194
                               ==========   ===========  ==========  ==========

</TABLE>



                                       5


<PAGE>
 

                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                      (in thousands, except for share data)
<TABLE>
<CAPTION>



                                                          Foreign       Unrealized
                          Common Stock      Additional    Currency        Gain on
                        Par Value  $.10      Paid-In     Translation    Marketable   Retained   Treasury
                       Shares     Amount     Capital      Adjustment    Securities   Earnings     Stock   
<S>                 <C>            <C>       <C>          <C>            <C>         <C>        <C>        

BALANCE
December 31, 1995    8,800,718     $880      $45,898         ($9)         $ --       $43,284    ($5,113)

Net loss for
nine months ended
September 30, 1996
(unaudited)             --          --           --          --             --        (3,660)       -- 
 
Stock options
 exercised              19,750        2          239         --             --           --         --
 
Unrealized gain on
 marketable securities  --          --           --          --            169           --         --
 
Foreign currency
 translation adjustment --          --           --           7             --           --         --      
                     ----------  ---------   ----------   ---------    ---------     ----------   --------   
BALANCE, September 30,
 1996 (unaudited)    8,820,468     $882      $46,137         ($2)         $169       $39,624     ($5,113)
                     ==========  =========   ==========   =========    =========     ==========   ========

 

BALANCE
December 31, 1996    8,822,968     $882      $46,182       ($113)        $ --        $38,018     ($5,113)

Net loss for
nine months ended
September 30, 1997
(unaudited)               --         --         --            --           --         (2,789)        --
 
Stock options 
exercised                  750       --            4          --           --           --           --
 
Foreign currency
 translation adjustment   --         --         --           (31)          --           --           --
                     -----------  --------   ---------   ---------    ---------    -----------    ---------
BALANCE, September 30,
 1997 (unaudited)    8,823,718     $882      $46,186       ($144)     $    --        $35,229     ($5,113)
                     ===========  ========   =========   =========    =========    ===========    =========

</TABLE>
                                       6
<PAGE>

 

                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>



                                                            Nine months ended
                                                               September 30,
                                                           1997         1996
<S>                                                       <C>          <C>


Cash flows from operating activities:
   Net loss
   Adjustments to reconcile net loss to cash             ($2,789)     ($3,660)
   provided from (used for) operating activities:
      Depreciation and amortization                        2,068        4,054
      (Gain) loss on (sale) write-down of investments       (285)         789
      Gain on sale of fixed assets                           --           (24)
                                                         --------      -------
                                                          (1,006)       1,159

Changes in other current assets and liabilities:
   Accounts receivable                                    10,041        4,318
   Inventories                                            (6,118)      (2,037)
   Prepaid and other                                      (1,791)      (3,178)
   Accounts payable                                       (2,389)       4,527
   Accrued liabilities                                        67       (2,676)
                                                         ---------    ---------
Net cash provided from (used for) operating activities    (1,196)       6,187 

Cash flows from investing activities:
   Capital expenditures                                     (881)      (1,221)
   Proceeds from sales of property, plant and equipment       -            43
   Additions to other assets                              (1,149)      (2,498)
   Investment in preferred units                              -        (2,000)
   Proceeds from sale of investment                          438           60
                                                         ---------    ---------
         Net cash (used for) investing activities         (1,592)      (5,616)
                                                         ---------    ---------

Cash flows from financing activities:
  Net borowings under line of credit agreement             1,630          675
  Proceeds from exercise of stock options                      4          241
                                                         ---------    ---------
      Net cash provided from financing activities          1,634          916
                                                         ---------    ---------

Effect of exchange rate changes on cash                      (52)           8

Net increase (decrease) in cash and cash equivalents      (1,206)       1,495
   Cash and cash equivalents, beginning of period          2,667          609
                                                         ---------    ---------
   Cash and cash equivalents, end of period                  861        2,104
                                                         =========    =========
Cash paid during the period:
   Interest                                                  $15         $104
                                                         =========    =========
   Income taxes                                            $ 453       $1,692
                                                         =========    =========
</TABLE>
                                       7
<PAGE>




                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 1997 and 1996
                                   (unaudited)

CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------

     The consolidated  financial statements included in this Form 10-Q have been
prepared by Swiss Army Brands, Inc. ("Swiss Army", the "Company") without audit.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been  condensed  or omitted  pursuant to the rules and  regulations  of the
Securities  and Exchange  Commission.  It is suggested  that these  consolidated
financial  statements be read in conjunction  with the financial  statements and
notes thereto  included in the Company's  report on Form 10-K for the year ended
December  31, 1996.  In the opinion of  management  of the Company,  the interim
financial statements included herein reflect all adjustments, consisting only of
normal recurring adjustments ( except for the special charges discussed below) ,
necessary  for a  fair  presentation  of  the  financial  position,  results  of
operations and cash flows for the interim periods presented.  The preparation of
financial statements in conformity with generally accepted accounting principles
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and  liabilities  at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.  Due to the seasonal nature of
the  Company's  business,  the results of  operations  for the  interim  periods
presented are not necessarily  indicative of the operating  results for the full
year.

INVENTORIES
-----------

     Domestic  inventories  are stated at the lower of cost  (determined  by the
last-in,  first-out (LIFO) method) or market.  Foreign inventories are valued at
the  lower  of  cost  or  market  determined  by the  FIFO  method.  Inventories
principally consist of finished goods.

SPECIAL CHARGES
---------------

     In the second  quarter of 1996,  the Company  recorded  special  charges of
approximately  $7,394,000  related to an  extensive  analysis  of the  Company's
operations and non-strategic assets. The special charges consisted of :

Write-off of inventory .......................      $4,521,000 (a)
Selling, general and administrative charges...       2,073,000 (b)
Write-down of investments ....................         800,000 (c)
                                                    ----------
                                                    $7,394,000
                                                    ==========

Represents the write-off of discontinued  inventory,  including  certain cutlery
products sold by Cuisine de France  Limited  ("CDF").  Substantially  all of the
assets of CDF were sold by the Company in January 1997.

Consists  of an  $870,000  write-off  of  goodwill  related  to CDF,  a $850,000
write-off for obsolete displays and a $353,000 write-off of other assets.

Consists of a $800,000 write-off of the Company's investment in a privately held
affiliated start-up entity. In the second quarter of 1997, the Company recovered
$110,000 related to this investment which is included in the gain (loss) on sale
(write-down) of investments.
                                       8
<PAGE>

INVESTMENTS
-----------

     During  the  third  quarter  of  1997,  the  Company  received  a  $438,000
distribution  from its  investment in Victory  Ventures LLC, which resulted in a
gain  of  $285,000.  This  amount  has  been  included  in gain  (loss)  on sale
(write-down) of investments.

INCOME TAXES
------------
 
     Income taxes are provided at the projected  annual  effective tax rate. The
income tax  provisions  (benefits)  for the interim 1997 and 1996 periods exceed
the federal  statutory  rate of 34% due  primarily to state income taxes (net of
federal benefit).

EARNINGS PER SHARE
------------------

     For the periods  ended  September 30, 1997 and 1996,  the weighted  average
number of shares of common stock  outstanding do not include the dilutive effect
of stock options as they would have an anti-dilutive effect.

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 128 (ASFAS No. 128" or the AStatement@),
Earnings Per Share (AEPS@). SFAS No. 128 establishes standards for computing and
presenting EPS and is effective for both interim and annual periods ending after
December 15,  1997.  The  Statement  does not permit  early  application  of its
provisions.  The  Statement  replaces  the  presentation  of primary  EPS with a
presentation  of basic EPS, as defined.  It also requires dual  presentation  of
basic and diluted EPS on the face of the  Statement of  Operations  for entities
with a complex capital structure.  The Company does not anticipate the effect on
EPS to be material.
                                       9

<PAGE>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (unaudited)

                           FORWARD LOOKING STATEMENTS
                           --------------------------

     The following discussion contains, in addition, to historical  information,
forward looking statements.  The forward looking statements were prepared on the
basis of certain assumptions which relate, among other things, to the demand for
and cost of purchasing and marketing the Company's products; the prices at which
such products may be sold; new product development; seasonal selling trends; the
Swiss franc- U.S. dollar exchange rates; the extent to which the Company is able
to successfully hedge against foreign currency  fluctuations;  and the Company's
anticipated  credit  needs  and  ability  to  obtain  such  credit.  Even if the
assumptions upon which the projections are based prove accurate and appropriate,
the actual  results of the  Company's  operations  in the future may vary widely
from financial  projections  due to increased  competition,  changes in consumer
tastes and other factors not yet known or anticipated.  Accordingly,  the actual
results of the  Company's  operations  in the future  may vary  widely  from the
forward-looking statements included herein.

                             RESULTS OF OPERATIONS
                             ---------------------

Comparison for the Three Months Ended September 30, 1997  and 1996
------------------------------------------------------------------

     Sales for the three  months  ended  September  30, 1997 were $27.9  million
compared with $34.6 million for the same period in 1996, representing a decrease
of $6.7 million or 19.5%.  Approximately  $1.1 million of the $6.7 million sales
decrease  was due to the sale of  substantially  all of the assets of Cuisine de
France Limited  ("CDF") in January 1997,  with the remaining  sales decrease due
primarily  to a  decrease  in sales of  Victorinox Original  SwissArmy   Knives,
watches and to a lesser extent cutlery.

     Gross profit of $10.6 million for the three months ended September 30, 1997
decreased  $1.4 million or 11.7% from 1996.  This  decrease is  primarily  due a
reduction in sales offset in part by a higher  gross profit  margin  percentage.
The gross profit  margin  percentage  for the third quarter of 1997 of 38.0% was
higher than the gross profit margin  percentage of 34.7%,  reported for the same
period in 1996  primarily  due to the  increase in the value of the U.S.  dollar
versus the Swiss franc.  The Company's gross profit margin is a function of both
product mix and Swiss franc exchange rates.  Since the Company imports virtually
all of its products  from  Switzerland,  its costs are affected by both the spot
rate of exchange and by its foreign currency-hedging program. The Company enters
into foreign  currency  contracts  and options to hedge the exposure  associated
with foreign currency fluctuations.  Based upon current Swiss franc requirements
the Company believes it is hedged through the remainder of 1997.  However,  such
hedging activity cannot eliminate the long-term  adverse impact on the Company's
competitive  position  and  results  of  operations  that  would  result  from a
sustained  decrease  in the value of the dollar  versus the Swiss  franc.  These
hedging  transactions,  which are meant to reduce foreign  currency  risk,  also
reduce the beneficial effects to the Company if the dollar increases relative to
the  Swiss  franc.   The  Company   plans  to  continue  to  engage  in  hedging
transactions;  however,  it is uncertain as to what extent to which such hedging
transactions will reduce the effect of adverse currency fluctuations.


     Selling,  general and  administrative  expenses  for the three months ended
September  30, 1997 of $12.2  million were $1.3 million or 12.3% higher than the
amount for the comparable period in 1996. Approximately $0.8 million of the $1.3
million  increase is due to expenses  related to the introduction of a new brand
and a brand  extension;  Swiss Watches marketed under the name Allenby and Swiss
Army Brand  Sunglasses,  with the remaining  increase due primarily to increased
expenditures for advertising and marketing related activities, offset in part by
expenses related to CDF.
 
     As a percentage  of net sales,  total  selling  general and  administrative
expenses increased from 31.2% in 1996 to 43.6% in 1997.

     Interest income  (expense),  net was income of $24,000 for the three months
ended September 30, 1997 versus expense of $56,000 for the comparable  period in
1996 primarily due to increased  invested cash balances  during 1997 as compared
to 1996.

                                       10
<PAGE>

     Gain (loss) on sale  (write-down)  of investments was a gain of $285,000 in
1997, due to a gain on a distribution  from the Company's  investment in Victory
Ventures LLC.

     As a result of these  changes,  income  (loss)  before income taxes for the
three months ended  September  30, 1997 was a loss of  $1,250,000 in 1997 versus
income of $1,140,000 for the same period in 1996, a decrease of $2,390,000.

     Income tax expense (benefit) was provided at an effective rate of 38.0% and
43.7% in 1997 and 1996, respectively.

     As a result,  net income  (loss) for the three months ended  September  30,
1997 was a loss of $775,000  ($0.09 per share) versus income of $642,000  ($0.08
per share) for the same period in 1996, a decrease of $1,417,000.


Comparison for the Nine Months Ended September 30, 1997  and 1996
-----------------------------------------------------------------

     Sales for the nine  months  ended  September  30,  1997 were $80.9  million
compared with $89.4 million for the same period in 1996, representing a decrease
of $8.4 million or 9.4%.  Approximately  $2.6 million of the $8.4 million  sales
decrease  was  due to the  sale of  substantially  all of the  assets  of CDF in
January 1997,  with the remaining  sales decrease due primarily to a decrease in
sales of Victorinox Original Swiss Army Knives,  watches and cutlery,  offset in
part by sales of Swiss Army Brand Sunglasses.

     Gross profit of $29.9 million for the nine months ended  September 30, 1997
increased $3.9 million or 15.2% from 1996. This increase is primarily due to the
$4.5  million  inventory  write-off  in  1996,  increased  gross  profit  margin
percentage offset in part by lower sales. The gross profit margin percentage for
the nine  months  ended  September  30,  1997 of 37.0% was higher than the gross
profit  margin  percentage  of  34.1%,  excluding  the  $4.5  million  inventory
write-off,  reported for the same period in 1996.  The gross  profit  percentage
increase is primarily due to the increase in the value of the U.S. dollar versus
the Swiss franc. The Company's gross profit margin is a function of both product
mix and Swiss franc exchange rates.  Since the Company imports  virtually all of
its products from  Switzerland,  its costs are affected by both the spot rate of
exchange and by its foreign  currency-hedging  program.  The Company enters into
foreign  currency  contracts and options to hedge the exposure  associated  with
foreign currency  fluctuations.  Based upon current Swiss franc requirements the
Company  believes it is hedged  through the  remainder  of 1997.  However,  such
hedging activity cannot eliminate the long-term  adverse impact on the Company's
competitive  position  and  results  of  operations  that  would  result  from a
sustained  decrease  in the value of the dollar  versus the Swiss  franc.  These
hedging  transactions,  which are meant to reduce foreign  currency  risk,  also
reduce the beneficial effects to the Company if the dollar increases relative to
the  Swiss  franc.   The  Company   plans  to  continue  to  engage  in  hedging
transactions;  however,  it is uncertain as to what extent to which such hedging
transactions will reduce the effect of adverse currency fluctuations.

     Selling,  general and  administrative  expenses  for the nine months  ended
September  30, 1997 of $35.1  million were $5.6 million or 18.8% higher than the
amount for the comparable period in 1996. Approximately $3.9 million of the $5.6
million  increase is due to expenses  related to the introduction of a new brand
and a brand  extension;  Swiss Watches marketed under the name Allenby and Swiss
Army Brand  Sunglasses,  with the remaining  increase due primarily to increased
expenditures for advertising and marketing related  activities,  $0.3 million in
costs related to continuing restructuring, offset in part by expenses related to
CDF.

     The Company recorded special selling, general and administrative charges of
$2.1 in 1996 related to the write-off of obsolete  displays,  goodwill and other
assets.  The goodwill  write-off  related to CDF, and was written-off due to the
lack of  recoverability  of the asset.  Substantially  of the assets of CDF were
sold by the  Company  in 1997 with no  significant  gain or loss.  There were no
special charges recorded in 1997.

     As a percentage  of net sales,  total  selling  general and  administrative
expenses increased from 35.4% in 1996 to 43.4% in 1997.

                                       11
<PAGE>

     Interest income  (expense),  net was income of $136,000 for the nine months
ended  September 30, 1997 versus income of $3,000 for the  comparable  period in
1996 primarily due to increased  invested cash balances  during 1997 as compared
to 1996.

     Gain (loss) on sale ( write-down) of investments  was a gain of $395,000 in
1997, verse a loss of $789,000 in 1996. The gain in 1997 comprised of a $285,000
gain from a distribution of the Company's investment in Victory Ventures LLC and
$110,000  gain  related to a privately  held  start-up  entity.  The Company had
previously  written off $800,000  related to this  privately held startup entity
investment in 1996.

     Other income  (expense),  net of $4,000 for the nine months ended September
30,  1997 versus  $145,000 in the same period for the prior year,  is due to the
favorable settlement of a legal matter in 1996.

     As a result of these changes,  loss before income taxes for the nine months
ended September 30, 1997 was $4,636,000 versus $6,273,000 for the same period in
1996, a decrease of $1,637,000.

     Income tax expense (benefit) was provided at an effective rate of 39.8% and
41.7% in 1997 and 1996, respectively.

     As a result,  net loss for the nine  months  ended  September  30, 1997 was
$2,789,000  ($0.34 per share) versus  $3,660,000  ($0.45 per share) for the same
period in 1996, a decrease of $871,000.
                                       
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     As of September 30, 1997, the Company had working  capital of $49.5 million
compared with $52.1 million as of December 31, 1996, a decrease of $2.6 million.
Significant  uses of working capital  included a $1.1 million  increase in other
assets and capital  expenditures of $0.9 million.  The Company  currently has no
material commitments for capital expenditures.

     Cash used for operating  activities was  approximately  $1.2 million in the
nine months ended  September 30, 1997 compared with cash provided from operating
activities of $6.2 million in the comparable period in 1996. The change resulted
primarily  from an increase in  inventory in 1997 verse a decrease in 1996 and a
decrease in accounts payable in 1997 verse an increase in 1996.

     The Company meets its short-term  liquidity  needs with cash generated from
operations,  and, when  necessary,  bank borrowings  under its revolving  credit
agreement.  As of  September  30,  1997,  the Company had a $5.0 million line of
credit,  of which $1.6 million was  outstanding  with the remaining line of $3.4
million  available  for  borrowing.  The  Company had a separate  $15.0  million
revolving  credit  agreement,  which  expired in January  1997.  The  Company is
currently  reviewing its options to establish a new revolving credit  agreement.
The Company's  short-term liquidity is affected by seasonal changes in inventory
levels, payment terms and seasonality of sales. The Company believes its current
liquidity  levels  and  financial  resources  will be  sufficient  to  meet  its
operating needs in the near-term. 

                                       12

<PAGE>


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

A.) Exhibits

 (2) Not Applicable

 (3) Not Applicable

 (4) Not Applicable

(10) Not Applicable

(11) Statement  regarding  computation  of per share  earnings  is not  required
     because  the  relevant  computation  can be  clearly  determined  from  the
     material contained in the Financial Statements included herein.

(15) Not Applicable

(18) Not Applicable

(19) Not Applicable

(22) Not Applicable

(23) Not Applicable

(24) Not Applicable

(27) Financial Data Schedule

(99) Not Applicable

B.)  There were no reports or  exhibits  on Form 8-K filed for the three  months
     ended September 30, 1997.

                                       


Pursuant  to the  requirements  to 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.

                                                      SWISS ARMY BRANDS, INC.
                                                        Registrant

 
Date:  November 11, 1997
                                             By /s/ Thomas M. Lupinski
                                             Name:  Thomas M. Lupinski
                                             Title:  Senior Vice President &
                                             Chief Financial Officer, Secretary
                                             and Treasurer

                                       13
<PAGE>