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FISHER-PRICE SALES DROP 17% IN SECOND QUARTER

Mattel Inc., the parent company of East Aurora's Fisher-Price Inc., announced Tuesday that while it saw an overall improvement in its second-quarter performance, revenues for the local division's products were down 17 percent.

The California-based toy giant reported net income for the April-through-June period rose 19 percent to $75.6 million, or 25 cents per share. That compares to $63.4 million, or 21 cents per share in the same period last year.

Sales for the quarter were up 6 percent, to $972.7 million, from $921.6 million in the same period one year ago.

But Fisher-Price's sales dropped to $213 million, from $257 million in the second quarter of 1996.

Jill Barad, Mattel's president and chief executive officer, said the second-quarter performance is in line with the toy giant's expectations, with double-digit growth in its core lines -- Barbie, Hot Wheels and Matchbox.

And the Mattel executive said that despite the sales drop at Fisher-Price, she sees signs of a turnaround.

"While our Fisher-Price business was down, we did see significant improvement in the second quarter," Ms. Barad said. "We will make further progress in the second half, as already evidenced by strong over-the-counter sales momentum for Fisher-Price products."

A sluggish 1996 selling year, which saw a 4 percent drop in Fisher-Price sales, left a surplus of its inventory in toy retailers' warehouses, leading to a continued slowing of orders through the second quarter.

But while big retailers, like Toys R Us, dragged their heels on placing new orders, consumers were busy scooping up the company's spring and summer offerings, according to Fisher-Price spokeswoman Laurie Strong.

Ms. Strong said the company's $12 Crazy Daisy water sprinkler has nearly sold out.

"They are pretty impossible to find at this point. We've sold more than a half million Crazy Daisies so far, and to meet demand the factory is making more," she said.

Another hot seller is the redesigned Bubble Mower which now features pretend grass clippings. The Power Wheels Barbie Sunjammer battery-powered car, which retails for $246, has also shown strong sales.

Ms. Strong also noted that while total sales were off in the April-to-June period, those months are traditionally slow ones for the toymaker.

"The second half of the year, especially the fourth quarter, is our key period," she said. "It's the months leading up to and through the holidays that are a true barometer of our strength."

In the next few months, it is expected Fisher-Price will make a strong advertising push for its totally reworked Little People figures and playsets, along with the Grand Dollhouse and the Stack and Build Utility Table for toddlers.

Christopher Byrne, editor of industry publication Market Focus: Toys, said he expects Fisher-Price to see continued improvements on both the retailer and consumer levels as Christmas approaches. He said the division's management team, headed by newcomer Gary Baughman, formerly of Tyco toys, understands what they need to do to renew the reputation of the Fisher-Price brand name.

"They've got some great products, especially with the new-look Little People," Byrne said. "I wouldn't count them out at all, but they've got to get out there are remind parents what Fisher-Price stands for. There's still a lot of prestige in that label."

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