<PAGE>
 
                      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 September 30, 1996

                                      OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934

 Commission file number 1-8714

                                TAMBRANDS INC.
                                --------------
            (Exact name of registrant as specified in its charter)


            Delaware                                  13-1366500
            --------                                  ----------
(State or other jurisdiction of                    (I.R.S. employer
incorporation or organization)                  identification no.)

777 Westchester Avenue, White Plains, New York             10604
----------------------------------------------             -----
(Address of principal executive offices)                 (Zip code)

Registrant's telephone number,
including area code                                (914) 696-6000
                                                   --------------

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 the latest practicable date:

 Common Stock, par value $.25 per share:   36,907,682 shares
                                         as of October 31, 1996
Index to Exhibits is set forth at page 11.
<PAGE>
 
                        PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------

                        TAMBRANDS INC. AND SUBSIDIARIES
           Consolidated Statements of Earnings and Retained Earnings
            Three and Nine Months Ended September 30, 1996 and 1995
                   (in thousands, except per share amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                           Three Months Ended            Nine Months Ended
                                                              September 30                 September 30
                                                           ------------------           ------------------
                                                             1996      1995               1996      1995
<S>                                                        <C>       <C>                <C>       <C>
Net sales                                                  $175,124  $178,116           $505,420  $521,401
     Cost of products sold                                   60,662    61,288            170,571   175,020
                                                           --------  --------           --------  --------
Gross profit                                                114,462   116,828            334,849   346,381
 
Selling, administrative and general expenses:
     Marketing, selling and distribution                     64,392    57,892            197,023   183,180
     Administrative and general                              13,301    13,701             39,119    41,323
 
Restructuring charge                                         46,221        --             46,221        --
                                                           --------  --------           --------  --------
                                                            123,914    71,593            282,363   224,503
                                                           --------  --------           --------  --------
 
Operating income(loss)                                       (9,452)   45,235             52,486   121,878
 
     Interest, net and other                                 (2,159)   (2,301)            (6,570)   (7,329)
     Litigation charge                                           --        --                 --   (11,396)
                                                           --------  --------           --------  --------
 
Earnings(loss) before provision
     for income taxes                                       (11,611)   42,934             45,916   103,153
 
Provision for income taxes                                    3,137    16,228             24,019    40,588
                                                           --------  --------           --------  --------
 
Net earnings(loss)                                          (14,748)   26,706             21,897    62,565
 
Retained earnings at beginning of period                    478,095   460,740            476,252   457,071
                                                           --------  --------           --------  --------
                                                            463,347   487,446            498,149   519,636
                                                           --------  --------           --------  --------
 
Dividends                                                    16,964    16,125             51,604    48,381
Net change in treasury stock                                    (43)      639                875       573
                                                           --------  --------           --------  --------
                                                             16,921    16,764             52,479    48,954
                                                           --------  --------           --------  --------
 
Retained earnings at end of period                         $446,426  $470,682           $445,670  $470,682
                                                           ========  ========           ========  ========
 
Net earnings(loss) per share                                 ($0.40)    $0.73              $0.59     $1.71
                                                           ========  ========           ========  ========
 
Dividends per share                                           $0.46     $0.44              $1.38     $1.32
                                                           ========  ========           ========  ========

Average shares of Common Stock
     outstanding during the period                           36,861    36,640             36,821    36,661
</TABLE> 

See accompanying notes to consolidated financial statements on page 5.

                                      -2-
<PAGE>
 
                        TAMBRANDS INC. AND SUBSIDIARIES
                          Consolidated Balance Sheets
                   September 30, 1996 and December 31, 1995
                                (in thousands)

<TABLE>
<CAPTION>
                                                             1996
                                                          (Unaudited)    1995
                                                          -----------  ---------
<S>                                                       <C>          <C>
ASSETS
------
Current assets:
    Cash and cash equivalents                              $   9,851   $  11,135
    Accounts receivable, less allowance
      for doubtful accounts of $1,680
      in 1996 and $1,478 in 1995                             116,154      98,047
    Inventories:
      Raw materials                                           12,442      17,952
      Finished goods                                          26,063      28,784
                                                           ---------   ---------
                                                              38,505      46,736
    Deferred taxes on income                                  18,263      17,724
    Prepaid expenses and other current assets                 25,279      26,271
                                                           ---------   ---------
Total current assets                                         208,052     199,913
Property, plant and equipment                                361,219     353,429
    Less accumulated depreciation                           (165,051)   (137,307)
                                                           ---------   ---------
                                                             196,168     216,122
Intangible and other assets                                    5,639       6,014
                                                           ---------   ---------
Total assets                                               $ 409,859   $ 422,049
                                                           =========   =========
 
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
    Short-term borrowings                                  $  76,988   $  55,063
    Accounts payable                                          47,622      48,498
    Accrued expenses                                          88,572      73,330
    Taxes on income                                           13,444      27,078
                                                           ---------   ---------
Total current liabilities                                    226,626     203,969
Medium-term obligations                                       69,542      80,889
Deferred taxes on income                                      23,248      22,537
Postemployment benefits                                       11,078      11,682
                                                           ---------   ---------
Total liabilities                                            330,494     319,077
Shareholders' equity:
    Common Stock                                              10,887      10,887
    Retained earnings                                        446,426     476,252
    Cumulative foreign currency translation adjustment       (14,484)    (14,223)
    Treasury stock                                          (361,700)   (368,543)
    Unamortized value of restricted stock and 
        pension costs                                         (1,764)     (1,401)
                                                           ---------   ---------
Total shareholders' equity                                    79,365     102,972
                                                           ---------   ---------
Total liabilities and shareholders' equity                 $ 409,859   $ 422,049
                                                           =========   =========
</TABLE>

See accompanying notes to consolidated financial statements on page 5.

                                      -3-
<PAGE>
 
                        TAMBRANDS INC. AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows
                 Nine Months Ended September 30, 1996 and 1995
                                (in thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                       1996      1995
                                                     --------  --------
<S>                                                  <C>       <C>
Cash Flows from Operating Activities:
Net earnings                                         $ 21,897  $ 62,565
Adjustments to reconcile net earnings to net
  cash provided by operating activities:
   Depreciation and amortization                       21,134    18,652
   Deferred income taxes                                  200     2,518
   Litigation charge                                   (3,012)    7,803
   Restructuring and other charges                     35,566    (2,496)
   Change in:
       Accounts receivable                            (18,581)  (24,680)
       Inventories                                      7,628    (6,516)
       Prepaid expenses and other current assets         (577)      899
       Taxes on income                                 (4,209)    6,043
       Accounts payable and accrued expenses             (995)       69
                                                     --------  --------

Net cash provided by operating activities              59,051    64,857
                                                     --------  --------
 
Cash Flows from Investing Activities:
Capital expenditures                                  (26,747)  (30,631)
Proceeds from sales of property, plant
  and equipment                                           186       541 
                                                     --------  --------
 
Net cash used in investing activities                 (26,561)  (30,090)
                                                     --------  --------
 
Cash Flows from Financing Activities:
Payment of dividends                                  (50,848)  (48,381)
Purchase of shares for treasury                            --    (4,326)
Short-term debt changes                                10,769     7,654
Medium-term obligation changes                           (215)   11,338
Proceeds from exercise of stock options and other       5,332     3,567
                                                     --------  --------
 
Net cash used in financing activities                 (34,962)  (30,148)
                                                     --------  --------
 
Effect of exchange rate changes on cash                 1,188      (942)
                                                     --------  --------
 
Net (decrease) increase in cash and 
   cash equivalents                                    (1,284)    3,677
 
Cash and cash equivalents at beginning of period       11,135    13,876
                                                     --------  --------
Cash and cash equivalents at end of period           $  9,851  $ 17,553
                                                     ========  ========
</TABLE>

See accompanying notes to consolidated financial statements on page 5.

                                      -4-
<PAGE>
 
Notes to Consolidated Financial Statements
------------------------------------------

1. The financial statements reflect all adjustments that, in the opinion of
management, are necessary for a fair presentation of the information contained
therein, and are subject to audit and adjustment at the end of the fiscal year,
with the exception of the Consolidated Balance Sheet at December 31, 1995, which
has been derived from the audited financial statements at that date.

2.  During the third quarter of 1996, a $46.2 million restructuring charge 
($37.0 million after-tax) was taken to provide for the costs associated with 
rationalizing production facilities around the world in order to support the 
Company's global growth strategy.  The charge included $26.2 million in asset
write-offs and $20.0 million in accrued severance and other personnel costs in 
connection with the closure of the manufacturing plants in Tours, France; 
Tipperary, Ireland; St. Petersburg, Russia and Vermont, U.S.A.  The Company 
anticipates that all of these plant closures will be completed by the end of 
1997 as manufacturing capability is consolidated into the remaining plants.  The
restructuring charge provides for a reduction of 1,100 jobs from the worldwide 
workforce. However, approximately 500 new jobs will be created from the upgrade
of the remaining manufacturing facilities and from the expanded marketing and
product development capabilities. During the third quarter of 1996, additional
consolidation costs of approximately $0.5 million were charged to the operating
results. The Company anticipates that approximately $3.2 million of
consolidation costs will be charged to operations as incurred during the fourth
quarter.

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

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

Net sales for the third quarter of 1996 were $175.1 million, a decrease of 2%
from the same period in the prior year. The decline in net sales was principally
attributable to lower worldwide volume. In the United States, the reduced volume
was primarily a result of increased competitive activity in the form of retail
price promotions and new product introductions. Additionally, the Company
experienced volume declines in a number of countries including Canada, Japan, 
Russia and China. The lower volume was partially offset by selective price
increases in certain international markets and in the United States. The third-
quarter U.S. tampon category in units declined 0.6 percentage points versus the
same period of 1995. Tampax U.S. market share in units for the third quarter was
below the comparable period of 1995 by 2.9 share points, primarily due to strong
competitive activity. Tampax U.S. market share in units for the third quarter of
1996 represented an improvement of 1.3 share points over the second quarter of
the same year.

                                      -5-
<PAGE>
 
Net sales for the nine months ended September 30, 1996 were $505.4 million, down
3% from the same period of the preceding year. The decline in net sales was
primarily due to lower volume which was particularly concentrated in the United
States. The reduced volume was primarily a result of increased competitive
activity in the form of retail price promotions and new product introductions.
The lower volume was partially offset by selective price increases in certain
international markets and in the United States.

Gross profit as a percentage of net sales was 65.4% and 66.3% for the third
quarter and nine-month period, respectively, versus 65.6% and 66.4% for the
corresponding periods of 1995. The lower margin in the current year was
primarily the result of the unfavorable volumes discussed above, partially
offset by pricing improvements.

Marketing, selling and distribution expenses were 11% and 8% above the three-
and nine-month periods of 1995, respectively.  The increases principally
reflected promotional support for the launch of Tampax Naturals in the United
States and the launch of a non-applicator tampon in France. The increase in
brand support was partially offset by income from the distribution of third-
party products, primarily in Russia and Eastern Europe.

Administrative and general expenses declined 3% and 5% in the third quarter and
nine-month period of 1996, respectively, versus the same periods of the prior
year.  The decrease was the result of management's continuing efforts to contain
overhead costs.

During the third quarter of 1996, a $46.2 million restructuring charge ($37.0
million after-tax) was taken to provide for the costs associated with
rationalizing production facilities around the world in order to support the
Company's global growth strategy. The charge included $26.2 million in asset
write-offs and $20.0 million in accrued severance and other personnel costs in
connection with the closure of the manufacturing plants in Tours, France;
Tipperary, Ireland; St. Petersburg, Russia and Vermont, U.S.A.  The Company
anticipates that all of these plant closures will be completed by the end of
1997 as manufacturing capability is consolidated into the remaining plants.  The
restructuring charge provides for a reduction of 1,100 jobs from the worldwide
workforce. However, approximately 500 new jobs will be created from the upgrade
of the remaining manufacturing facilities and from the expanded marketing and
product development capabilities.  During the third quarter of 1996, additional
consolidation costs of approximately $0.5 million were charged to the operating
results. The Company anticipates that approximately $3.2 million of
consolidation costs will be charged to operations as incurred during the fourth
quarter.

The operating loss for the third quarter of 1996 of $9.5 million and the nine-
month operating income as of September 30, 1996 of $52.5 million each included
the pre-tax restructuring charge of $46.2 million. Exclusive of the
restructuring charge, operating income for each of the third quarter and nine-
month period decreased by 19% from the prior year.  The decrease was principally
attributable to the lower sales volume and increased promotional activities,
partially mitigated by favorable pricing, as discussed above.


                                      -6-
<PAGE>
 
Interest, net and other was favorable by 6% and 10% for the three- and nine-
month periods of 1996, respectively, compared to the corresponding periods of
the prior year. The decrease was primarily due to a reduction in realized
foreign exchange losses from the prior year.

The nine-month effective tax rate for 1996 was 52% compared to 39% for the
comparable period of 1995. Exclusive of the restructuring charge, which was not
fully deductible for tax purposes, the 1996 effective tax rate for each of the
three- and nine-month periods would have been 36%. Exclusive of the litigation
charge, the 1995 effective tax rate for each of the three- and nine-month
periods would have been 38%.  Comparing the effective tax rates exclusive of
these charges, the lower effective tax rate in the current year is primarily due
to the additional utilization of foreign tax credits in 1996.

Earnings(loss) per share were ($.40) and $.59 for the third quarter and nine-
month period of 1996, respectively, versus $.73 and $1.71 for the comparable
periods of the prior year.  Excluding the restructuring charge of $1.00, 1996
earnings per share would have been $.60 for the third quarter and $1.60 for the
nine-month period. Excluding the 1995 litigation charge of $.23, the prior year
earnings per share would have been $.73 for the third quarter and $1.94 for the
nine-month period.

Outlook
-------

The worldwide market for consumer products remains highly competitive and
sensitive to price. The Company expects that this trend will continue. However,
management will evaluate price increase opportunities as appropriate. The
Company anticipates a continuation of the current high level of advertising and
promotional activities and new product introductions by competitors, along with
additional growth in the private label sector. Full-year 1996 earnings will be
below 1995 earnings, which were $2.57 per share before the litigation charge
taken in the second quarter of that year.

The Company intends to aggressively proceed with its support of the Tampax
tampon franchise with advertising, promotions and product line extensions in the
United States and international markets.

The cost of manufacturing continues to be impacted by the prior escalation of
raw material and packaging costs. As a result of the downward trend of pulp and
paper prices, these costs have moderated slightly. Management expects a
continuation of this downward trend in prices through the remainder of 1996 and
the first part of 1997. The Company expects that the plant restructuring
program, coupled with the on-going efforts to eliminate excess costs from the
supply chain, will lower overall production costs in the future.


                                      -7-
<PAGE>
 
Financial Condition
-------------------

At September 30, 1996, there was a working capital deficit of $19.3 million,
compared to a deficit of $4.1 million at the prior year end. Cash flows from
operating activities for the nine months ended September 30, 1996 were $59.1
million, versus $64.9 million in the comparable period of 1995. The decrease in
cash flows from operating activities was primarily attributable to lower net
earnings and the timing of tax payments, partially offset by better management
of inventory and receivable levels.

Capital expenditures of $26.7 million for the nine months ended September 30,
1996 represent the Company's continued investment in equipment to improve
product quality and productivity, modernize production facilities, and
manufacture and launch new products.  The spending levels in 1996 are expected
to be somewhat below those of 1995.

The Company anticipates that its future cash requirements will be met by its
cash flows from operations and the ability to borrow from a variety of sources.

                                      -8-
<PAGE>
 
Information Concerning Forward-Looking Statements
-------------------------------------------------

Statements contained in this Quarterly Report, other than matters of historical
fact, are forward-looking statements and are made based on management's
expectations and beliefs concerning future developments and their potential
effect on the Company.  There can be no assurance that future developments will
be in accordance with management's expectations or that the effect of future
developments on the Company will be those anticipated by management.  Among the
factors that could cause actual results to differ materially from such forward-
looking statements are the following:

- the market reception given the Company's new products, including TAMPAX
NATURALS;
 
- competitive pressures, including new product developments or increased
advertising or promotional activity by existing or new competitors or growth in
the private label tampon segment;
 
- changes in the market for raw or packaging materials, which could impact the
Company's manufacturing costs;
 
- changes in the pricing of the products of the Company or its competitors;

- changes in consumer preferences affecting the usage of tampons;

- the loss of a significant customer;
 
- the costs and uncertainties associated with implementation of actions
resulting from the Company's ongoing evaluation of its business strategies and
organizational structures;

- production delays or inefficiencies;
 
- the costs and other effects of legal and administrative cases and proceedings,
settlements and investigations;

- real or perceived safety or quality issues with respect to the Company's
products, whether arising from tampering or otherwise; and
 
- changes in U.S. or international economic or political conditions, such as
inflation or fluctuations in interest or foreign exchange rates.
                               
   While the Company periodically reassesses material trends and uncertainties
affecting the Company's results of operations and financial condition in
connection with its preparation of management's discussion and analysis of
results of operations and financial condition contained in its quarterly and
annual reports, the Company does not intend to review or revise any particular
forward-looking statement in light of future events.

                                      -9-
<PAGE>
 
                          PART II - OTHER INFORMATION
                          ---------------------------

Item 1.   Legal Proceedings
-------   -----------------

The Company or a subsidiary is a defendant in a small number of product
liability lawsuits based on allegations that toxic shock syndrome ("TSS") was
contracted through the use of tampons.  A small number of pre-suit claims
involving similar TSS allegations have also been asserted.  The damages alleged
vary from case to case and often include claims for punitive damages.

The Company is involved, either as a named defendant or as the result of
contractual indemnities, in certain litigation arising out of the operations of
certain divested subsidiaries.

There are certain other legal proceedings pending against the Company arising
out of its normal course of business in which claims for monetary damages are
asserted.

While it is not feasible to predict the outcome of these legal proceedings and
claims with certainty, management is of the belief that any ultimate liabilities
in excess of provisions therefor will not individually or in the aggregate have
a material adverse effect on the Company's financial position or results of
operations.

                                    *  *  *

Items 2, 3, 4 and 5 of Part II have been omitted since either the Company's
response to the Item would be negative or the Item is inapplicable.

                                      -10-
<PAGE>
 
Item 6.   Exhibits and Reports on Form 8-K
------    --------------------------------

a)   Exhibits
     --------
 
          Exhibit
          Number      Description
          ------      -----------      
 
          3(1)        Certificate of Incorporation of the Company, as amended
                      through April 28, 1987, filed April 30, 1987 as Exhibit
                      4(a) to the Company's Form S-8 Registration Statement
                      (Reg. No. 33-13902), incorporated herein by reference.

          3(2)        Certificate of Amendment of Certificate of Incorporation
                      of the Company, dated April 24, 1990, filed May 15, 1990
                      as Exhibit 4(2) to the Company's Report on Form 10-Q for
                      the quarter ended March 31, 1990, incorporated herein by
                      reference.

          3(3)        Certificate of Amendment of Certificate of Incorporation
                      of the Company, dated April 28, 1992, filed May 15, 1992
                      as Exhibit 4(2) to the Company's Report on Form 10-Q for
                      the quarter ended March 31, 1992, incorporated herein by
                      reference.

          3(4)        By-Laws of the Company, as amended, filed March 31, 1995
                      as Exhibit 3(4) to the Company's Report on Form 10-K for
                      the year ended December 31, 1994, incorporated herein by
                      reference.
                                                                  
          4(1)        Description of the rights of security holders set forth in
                      the Certificate of Incorporation of the Company, as
                      amended through April 28, 1987, filed April 30, 1987 as
                      Exhibit 4(a) to the Company's Form S-8 Registration
                      Statement (Reg. No. 33-13902), incorporated herein by
                      reference.
                                                                     
          4(2)        Description of the rights of security holders set forth in
                      the Certificate of Amendment of Certificate of
                      Incorporation of the Company, dated April 28, 1992, filed
                      May 15, 1992 as Exhibit 4(2) to the Company's Form 10-Q
                      Report for the quarter ended March 31, 1992, incorporated
                      herein by reference.

                                      -11-
<PAGE>
 
          Exhibit
          Number      Description
          ------      -----------      

          4(3)        Rights Agreement between the Company and First Chicago
                      Trust Company of New York, as Rights Agent, dated as of
                      October 24, 1989, which includes the Form of Right
                      Certificate as Exhibit A and the Summary of Rights to
                      Purchase Common Shares as Exhibit B, filed October 27,
                      1989 as Exhibit 1 to the Company's Form 8-A Registration
                      Statement, incorporated herein by reference.

          4(4)(a)     Indenture dated as of December 1, 1993 between the Company
                      and Citibank, N.A., as trustee, relating to the Company's
                      Medium-Term Note Program, filed March 31, 1994 as Exhibit
                      4(4)(a) to the Company's Form 10-K Report for the year
                      ended December 31, 1993, incorporated herein by reference.

          4(4)(b)     Form of Floating Rate Debt Security, filed December 16,
                      1993 as Exhibit 4-a to the Company's Report on Form 8-K,
                      incorporated herein by reference.

          4(4)(c)     Form of Fixed Rate Debt Security, filed December 16, 1993
                      as Exhibit 4-b to the Company's Report on Form 8-K,
                      incorporated herein by reference.

          12          Computation of Ratio of Earnings to Fixed Charges, filed
                      herewith.

          27          Financial Data Schedules, filed herewith (in electronic
                      format only).

Exhibits 2, 10, 11, 15, 18, 19, 22, 23, 24 and 99 have been omitted as
inapplicable.

                                      -12-
<PAGE>
 
b)   Reports on Form 8-K
     -------------------

     The Company filed a Report under Item 5 of Form 8-K on July 24, 1996 in
order to file a press release, issued by the Company on July 23, 1996, which
contained the Company's second-quarter 1996 results.
 
     The Company filed a Report under Item 5 of Form 8-K on September 18, 1996
in order to file a press release, issued by the Company on September 18, 1996,
which announced, among other things, a restructuring and reorganization of
certain of its operations.

                                      -13-
<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 thereunto duly authorized.

                                             TAMBRANDS INC.

                                         ----------------------
                                              (Registrant)



                                         /s/ Susan J. Riley
                                         ------------------------
                                         Susan J. Riley
                                         Senior Vice President -
                                         Chief Financial Officer
                                         and Authorized Signatory


Date: November 13, 1996

                                      -14-