<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               _________________


                                   FORM 10-Q

(Mark One)

 X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the quarterly period ended: February 28, 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 0-13851


                                 NITCHES, INC.
             (Exact name of registrant as specified in its charter)


        California                          95-2848021 
(State of Incorporation)       (I.R.S. Employer Identification No.)

               10280 Camino Santa Fe, San Diego, California 92121
                    (Address of principal executive offices)

Registrant's telephone number, including area code: (619) 625-2633

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 ___

As of April 11, 1997, 1,210,296 shares of the Registrant's common stock were
outstanding.


<PAGE>   2


                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                         NITCHES, INC. AND SUBSIDIARIES
                          Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                         February 28,   August 31,
                                             1997          1996
                                         -----------    -----------    
                                         (Unaudited)
                                         
                               ASSETS
<S>                                     <C>            <C>
Current assets:
  Cash and cash equivalents              $    17,399    $2,197,015
  Receivables:
    Trade accounts, less allowances
      ($571,000 at February 28, 1997 and
       $425,000 at August 31, 1996)        7,494,251     6,081,880
    Income taxes receivable                   54,598       261,462
    Due from affiliates and employees         86,838       140,418
                                         -----------   -----------
                                           7,635,687     6,483,760

  Inventories, net                         7,275,833     7,044,498
  Deferred income taxes                    1,500,102     1,500,102
  Other current assets                       567,569       342,229
    Total current assets                  16,996,590    17,567,604

Furniture, fixtures and equipment, net       267,869       314,473
Other assets                                 165,166       296,608
                                         -----------   -----------
                                         $17,429,625   $18,178,685
                                         ===========   ===========
                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable and
    accrued expenses                      $4,061,737    $5,359,050
  Notes payable                              485,241
                                         -----------   -----------
    Total current liabilities              4,546,978     5,359,050

Deferred income taxes                      1,021,098     1,095,858
Shareholders' equity:
  Preferred stock, no par value,
    25,000,000 shares authorized
  Common stock, no par value,
    50,000,000 shares authorized;
    1,210,296 issued and outstanding       2,657,818     2,658,400
  Retained earnings                        9,203,731     9,065,377
                                         -----------   -----------
    Total shareholders' equity            11,861,549    11,723,777
                                         -----------   -----------
                                         $17,429,625   $18,178,685
                                         ===========   ===========

</TABLE>
                                       2

<PAGE>   3
                         NITCHES, INC. AND SUBSIDIARIES
                     Consolidated Statements of Operations
                                  (Unaudited)




<TABLE>
<CAPTION>
                          Second quarter ended        Six months ended
                       -------------------------  -------------------------
                       February 28, February 29,  February 28, February 29,
                           1997         1996          1997         1996
                       -----------  ------------  ------------ ------------

<S>                   <C>
Net sales              $11,295,458  $16,032,039   $24,961,704  $29,365,723

Cost of goods sold       8,263,702   11,203,344    19,035,416   21,433,212
                        ----------   ----------    ----------   ----------
Gross profit             3,031,756    4,828,695     5,926,288    7,932,511

Expenses:
  Selling, general
   and administrative    2,840,746    3,396,507     5,689,295    6,826,634
                        ----------   ----------    ----------   ----------
Income from operations     191,010    1,432,188       236,993    1,105,877

Interest income             34,296       48,764        57,964      145,590
Interest expense           (84,358)      (9,575)      (85,332)      (9,575)
                        ----------   ----------    ----------   ----------
Income before income
  taxes                    140,948    1,471,377       209,625    1,241,892
Provision for income
  taxes                     47,924      301,566        71,271      223,541
                        ----------   ----------    ----------   ----------
Net income              $   93,024   $1,169,811    $  138,354   $1,018,351
                        ==========   ==========    ==========   ========== 
Earnings per
  common share                $.07         $.97          $.11         $.84
                        ==========   ==========    ==========   ========== 
Weighted average
  shares outstanding     1,246,544    1,210,296     1,258,958    1,210,296
                        ==========   ==========    ==========   ========== 
</TABLE>

                                       3
<PAGE>   4
                         NITCHES, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)


<TABLE>
<CAPTION>
                                     Six months ended February 28 and 29 
                                     ----------------------------------- 
                                           1997               1996
                                       -----------        -----------
<S>                                   <C>                <C>
Net cash used by
  operating activities                 $(1,418,865)       $(1,155,450)
                                       -----------        -----------
Cash flows from investing activities:
  Capital expenditures                    ( 35,114)          ( 55,156)
                                       -----------        -----------
  Net cash used by investing
    activities                            ( 35,114)          ( 55,156)
                                       -----------        -----------
Cash flows from financing activities:
  Dividends paid                        (1,210,296)
  Net borrowings under line of
    credit and short-term loan
    agreements                             485,241            656,749
  Proceed from exercise of stock
    options                                                     5,152
  Purchases and retirement of
    subsidiary shares                         (582)          (267,684)
  Purchases and retirement of
    parent common stock                                    (9,664,222)
                                       -----------        -----------
  Net cash used by financing
    activities                          (  725,637)        (9,270,005)
                                       -----------        -----------
Net decrease in cash and
  cash equivalents                     ( 2,179,616)       (10,480,611)

Cash and cash equivalents
  at beginning of period                 2,197,015         10,485,189
                                       -----------        -----------
Cash and cash equivalents
  at end of period                     $    17,399         $    4,578
                                       ===========         =========== 


Supplemental disclosures of cash flow information:
  Cash paid during the period:
    Interest                               $86,087            $ 9,300
    Income taxes                           $89,160            $ 8,988



</TABLE>
                                       4
<PAGE>   5
                         NITCHES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (Unaudited)

1.  Effective December 1, 1995, the Company amended its Articles of
Incorporation to change the Company's name from Beeba's Creations, Inc. to
Nitches, Inc.  Effective December 22, 1995, the Company's stock symbol on
NASDAQ was changed to "NICH".

2.  Condensed Consolidated Financial Statements:

     The consolidated balance sheet as of February 28, 1997, and the
consolidated statements of operations for the three and six months ended
February 28, 1997 and February 29, 1996 and the condensed consolidated cash
flow statements for the six months ended February 28, 1997 and February 29,
1996 have been prepared by the Company without audit.  In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the consolidated financial position, results of
operations and cash flows at February 28, 1997 and for all periods presented
have been made.  The results of operations for the periods ended February 28,
1997 and February 29, 1996 are not necessarily indicative of the operating
results for the full years.

        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 and
disclosure of contingent 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.

        The following methods and assumptions were used to estimate fair value
of each class of financial instruments for which it is practicable to estimate
that value:

Cash and cash equivalents, accounts receivable, and accounts payable
The carrying amount approximates fair value because of the short maturity of
those instruments.

Notes payable
The carrying amount approximates fair value as the related interest rate is
variable and is comparable to interest rates available to the Company for
similar notes.

     Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's August 31, 1996 audited financial
statements.


                                       5
<PAGE>   6
                         NITCHES, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements (continued)
                                  (Unaudited)

3.  Earnings Per Share:

        For the three and six months ended February 28, 1997, 36,248 and 48,662
common stock equivalents for options were included in the weighted average
number of shares outstanding, respectively.  At February 29, 1996, no common
stock equivalents for options were included in the weighted average number of
shares outstanding because outstanding options were either antidilutive or
diluted earnings per share by less than 3%.

        In February of 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per
Share (EPS).  This statement requires the presentation of earnings per share to
reflect both "Basic EPS" as well as "Diluted EPS" on the face of the income
statement.  In general, Basic EPS excludes dilution created by stock
equivalents and is a function of the weighted average number of common shares
outstanding for the period.  Diluted EPS does reflect the potential dilution
created by stock equivalents as if such equivalents are converted into common
stock and is calculated in substantially the same manner as Fully Diluted EPS
illustrated in Accounting Principles Board Opinion No. 15 "Earnings Per Share"
("APB No. 15").

        The Company will be required to adopt the new method of reporting EPS
for the fiscal year ending August 31, 1997.  Based on the Company's capital
structure, the anticipated results of implementing SFAS No. 128 would reflect
EPS in materially the same manner as currently reported.

4.  Inventories:

<TABLE>
<CAPTION>
                               February 28,     August 31,
                                   1997            1996
                               -------------    -----------    
     <S>                         <C>             <C>
     Fabric and trims            $  871,952     $   818,502
     Finished goods               6,403,881       6,225,996
                                 ----------      ---------- 
                                 $7,275,833      $7,044,498
                                 ==========      ==========
</TABLE>
5.  Notes Payable and Contingent Liabilities:

     At February 28, 1997, the Company had agreements with a financial
institution pursuant to which the Company sold a majority of its trade accounts
receivable to the financial institution on a pre-approved non-recourse basis.
The Company may request advances in anticipation of customer collections at the
financial institution's prime rate less one half percent and open letters of
credit through the lender, all of which are


                                       6

<PAGE>   7
                         NITCHES, INC. AND SUBSIDIARIES
             Notes to Consolidated Financial Statements (continued)
                                  (Unaudited)


collateralized by all of the Company's assets.  Notes payable and contingent
liabilities for irrevocable letters of credit outstanding with the financial
institution are as follows:

<TABLE>
<CAPTION>
                                     February 28,   August 31,
                                         1997          1996
                                     ------------   -----------
     <S>                              <C>           <C>
     Contingent liabilities for
       irrevocable letters of credit  $ 5,799,640   $ 5,849,134
     Notes payable                    $   485,241

</TABLE>
6.  Major Customers:

        One major customer accounted for 12.3% and 16.7% of the Company's net
sales in the quarter and six months ended February 28, 1997, respectively.  No
customer accounted for 10% or more of total sales in the quarter ended February
29, 1996.  Two customers accounted for 11.8% and 11.4%, respectively, of net
sales in the six months ended February 29, 1996.

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

Results of Operations

Six Months Ended February 28, 1997 Compared to the Six Months
Ended February 29, 1996.

     Net sales for the six months ended February 28, 1997 decreased
approximately $4.4 million (15.0%) as compared to the six months ended February
29, 1996.  Overall, sales decreased due to a 24.2% decrease in the number of
garments sold offset by a 13.2% increase in the average selling price per
garment.  The higher selling price per garment is a result of the Company's
shifting product mix to higher priced and higher cost niche products such as
the Activewear Division which markets jog suits.

     Gross margins decreased from 27.0% for the six months ended February 29,
1996 to 23.7% for the current six month period.  The decrease was attributable
to a 17.4% increase in the average cost per garment as a result of the
Company's shifting product mix.  Furthermore, the above decrease in the number
of garments sold was primarily in dresses, which in the past contributed a
higher than average gross margin to the product mix.

                                       7

<PAGE>   8
     The Company's product mix constantly changes to reflect customer mix,
fashion trends and changing seasons.  Consequently, gross margins are likely to
vary on a quarter-to-quarter basis and in comparison to gross margins generated
in the same period of prior fiscal years.

    Selling, general and administrative expenses decreased in dollar amount
from $6.8 million for the first six months of last year to $5.7 million for the
first six months of fiscal 1997, and decreased as a percent of net sales from
23.2% last year to 22.8% for the current period.  The decrease in dollar amount
and as a percentage of sales is a result of the Company's restructuring to
decrease overhead which resulted in lower salary, commission and rent expense.

         Interest expense increased in the six months ended February 28, 1997
due to an assessment imposed by the Internal Revenue Service in connection with
the audit of the Company's federal tax returns for the fiscal years 1992
through 1994.  Interest income decreased in the six months ended February 28,
1997 due to the decrease in the average daily cash balances compared to the
same period last year.

Three Months Ended February 28, 1997 Compared to the Three Months
Ended February 29, 1996.

     Net sales for the second quarter of fiscal 1997 decreased approximately
$4.7 million (29.5%) compared to the net sales for the same quarter last year.
Overall, sales decreased in the current quarter due to a 25.6% decrease in the
number of garments sold along with a 7.9% decrease in the average selling price
per garment.  The lower selling price per garment is a result of the loss in
volume in dresses, which were a significant factor in net sales during the same
period last year.

     Gross margins decreased from 30.1% for the three months ended February 29,
1996 to 26.8% for the current quarter.  The decrease was attributable to the
loss in volume of dresses as mentioned above along with the Company's shifting
product mix to higher cost niche products such as the Activewear Division which
markets jog suits.

    Selling, general and administrative expenses decreased in dollar amount
from $3.4 million for the second quarter of last year to $2.8 million for the
second quarter of fiscal 1997, and increased as a percent of net sales from
21.2% last year to 25.1% for the current quarter.  The decrease in dollar
amount is a result of the Company's restructuring to decrease overhead which
resulted in lower salary, commission and rent expense; however, the increase as
a percentage of sales is due to the loss in sales volume as mentioned above.

                                       8

<PAGE>   9
        Interest expense increased in the current quarter due to an assessment
imposed by the Internal Revenue Service in connection with the audit of the
Company's federal tax returns for fiscal years 1992 through 1994.  Interest
income decreased in the current quarter due to the decrease in the average
daily cash balances compared to the same period last year.

Liquidity and Capital Resources

        The Company used approximately $1.2 million and $1.4 million of cash
from operations in the second quarter and six months ended, respectively, in
fiscal 1997, primarily for the normal seasonal purchase of inventory, and on
September 30, 1996, the Company paid a special dividend of $1.00 per share
amounting to approximately $1.2 million.  This accounts for the decrease in the
Company's cash balance from $2.2 million at August 31, 1996 to approximately
$17,000 at February 28, 1997.

        At February 28, 1997, the Company had agreements with a financial
institution pursuant to which the Company sold a majority of its trade accounts
receivable to the financial institution on a pre-approved non-recourse basis.
The Company ships the non-financed portion of the merchandise to customers and
attempts to make those shipments on a COD basis or ensure that the customer's
payments are backed by a commercial or standby letter of credit issued by the
customer's bank.  The amount of the Company's receivables which were not sold
to the financial institution and were not made on a COD basis or supported by
commercial or standby letters of credit at February 28, 1997 was approximately
$1.2 million of which approximately $.3 million has been collected through
April 8, 1997.

     Payment for receivables which are sold to the financial institution is
received at the time customers make payment to the financial institution or, if
a customer is financially unable to make payment, within approximately 180 days
of the invoice due date.  The Company may request advances in anticipation of
customer collections at the lender's prime rate less one half percent and open
letters of credit through the lender up to $20 million.  The amount of such
borrowings, including a portion of outstanding letters of credit, are limited
to certain percentages of outstanding accounts receivable and finished goods
inventory owned by the Company and are collateralized by all of the assets of
the Company.  At February 28, 1997, the Company had outstanding letters of
credit of approximately $5.8 million which had been opened through the
financial institution.  Cash borrowings from the financial institution were
approximately $.5 million as of February 28, 1997.  Under these agreements, the
Company is required to maintain $9 million in net worth and $8.5 million in
working capital.


                                       9

<PAGE>   10
        The Company has amended a five-year note associated with the sale of
its junior, girls, and maternity product lines during fiscal 1995.  The Company
accounted for the $950,000 note on a cost recovery basis and will record
revenue when the buyer makes payments on the note.  In the quarter ended
February 28, 1997, the Company has agreed to reduce the principal amount to
$600,000 and will accept interest only payments until March 15, 2001.  No
amounts associated with this note receivable have been recorded in the
accompanying financial statements and no collections on the note were received
through February 28, 1997.

        The Company is not aware of any trends or other matters which will, or
are reasonably likely to, result in its liquidity materially increasing or
decreasing.  However, the Company expects its cash position to increase during
the last two quarters of the fiscal year due to an expected decrease in
purchasing inventory, particularly in dresses.  The Company does not anticipate
making any significant capital expenditures.

Other Information

Inventory

     The experience of the Company demonstrates that, in its ordinary course of
operations, a portion of the Company's sales may be made below its normal
selling prices or below cost subsequent to February 28, 1997.  However, the
amount of such sales depends on several factors, including general economic
conditions, market conditions within the apparel industry, the desirability of
the styles held in inventory and competitive pressures from other garment
suppliers.

     The Company's inventory increased from $7.0 million at August 31, 1996 to
$7.3 million at February 28, 1997.  The Company has established an inventory
markdown reserve as of February 28, 1997 which management believes will be
sufficient for current inventory that is expected to be sold below cost in the
future.  There can be no assurance that the Company will realize its expected
selling prices, or that the inventory markdown reserve will be adequate, for
items in inventory as of February 28, 1997 for which customer sales orders have
not yet been received.

Backlog

     At February 28, 1997, the Company had unfilled customer orders of $14.4
million compared to $17.9 million of such orders at February 29, 1996, with
such orders generally scheduled for delivery by July 1997 and August 1996,
respectively.  These amounts include both confirmed orders and unconfirmed
orders which the Company believes, based on industry practice and past
experience, will be confirmed.  While cancellations, rejections


                                       10
<PAGE>   11
and returns have generally not been material in the past, there can be no
assurance that cancellations, rejections and returns will not reduce the amount
of sales realized from the backlog of orders at February 28, 1997.

        However, in the present quarter, management believes the decrease in
backlog is primarily attributable to a general trend in the retail industry
toward shorter order lead times and placing merchandise in the stores closer to
the wearing season, particularly in dresses.  This shift in ordering policy by
the stores was identified in the quarterly report ending November 30, 1996.
The Company then decided not to produce inventory in anticipation of customer
orders or in an amount equaling last year's sales.  Furthermore, the Company
does not expect to receive customer orders in the last two quarters of the year
to offset the shortfall in orders experienced to date.  Therefore, the
shortfall in backlog is expected to result in a reduction in sales and profits
for this fiscal year as compared to last fiscal year.


                           PART II. OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders.

     An annual meeting of shareholders of the Company was held on December 18,
1996.  At the meeting, the shareholders approved the following:

(1) the appointment of Deloitte & Touche LLP as the Company's
independent certified public accountants for the fiscal year
ended August 31, 1997 by votes of 1,039,307 for, 2,914 against
and 2,049 abstain, and

(2) the election of directors as follows:

<TABLE>
<CAPTION>
           Name               Votes For     Withheld
           ----               ---------     --------
  <S>                         <C>             <C>
  Arjun C. Waney              1,037,188       7,087
  Steven P. Wyandt            1,037,188       7,087
  Luther A. Henderson         1,036,788       7,487
  Eugene B. Price II          1,037,088       7,187
  William L. Hoese            1,037,188       7,087
</TABLE>

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

(a)  The following exhibits are filed herewith.  Exhibit numbers
refer to Item 601 of Regulation S-K:

        Exhibit No. 10.30.1 Amendment to Asset Purchase Agreement and related
                            agreements between the Company and Design and Source
                            Holding Company, Ltd. effective February 25, 1997.

                                       11
<PAGE>   12

                   Exhibit No. 27:  Financial Data Schedule.

(b)  There were no reports on Form 8-K filed during the quarter
ended February 28, 1997.

                                       12
<PAGE>   13
                                   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 there unto duly authorized.




                                  NITCHES, INC.
                          --------------------------------     
                                   Registrant



April 11, 1997             By:    Steven P. Wyandt
                              -----------------------------
                                  Steven P. Wyandt
                            As Principal Financial Officer
                            and on behalf of the Registrant


                                       13