Second Quarter Financial Highlights

• Worldwide net sales up 5 percent;
• Domestic gross sales up 1 percent and international gross sales up 12 percent;
• Worldwide gross sales for core brands: Barbie(R) down 13 percent; Hot Wheels(R) up 37 percent; core Fisher-Price(R) up 12 percent and American Girl(R) brands up 18 percent;
• Gross margin decreased 70 basis points of net sales; SG&A decreased 30 basis points of net sales;
• Operating income as a percentage of net sales was 5.4 percent, flat with prior year; and
• Earnings per share of $0.06 vs. prior year of $0.05.

"The second quarter was consistent with our expectations that 2004 will be a challenging year. To improve long term performance, we are acutely focused on addressing the top line by reinvigorating the Barbie® brand and capitalizing on the positive momentum of our electronic learning strategy," said Robert A. Eckert, chairman and chief executive officer of Mattel. "To that end, we will continue to make strategic investments in the business to drive that growth."

Second Quarter Financial Overview

For the quarter, net sales were $804.0 million, a 5 percent increase from $769.0 million last year, which included a benefit from changes in currency exchange rates of 2 percentage points. Additionally, beginning in last year's fourth quarter, the company changed the way it classifies certain close-out sales resulting in a 1.6 percentage point benefit to net sales for the second quarter of 2004 when compared to the year ago quarter. On a regional basis, second quarter gross sales increased 1 percent in the U.S., and in international markets, second quarter gross sales were up 12 percent, which included a benefit from changes in currency exchange rates of 4 percentage points.

For the second quarter, operating income was $43.2 million, an increase of 4 percent compared to the prior year, driven primarily by sales growth. In the second quarter of 2003, operating income included charges of $13.1 million associated with the company's financial realignment plan, which was completed in the fourth quarter of 2003. From time to time, the company expects to invest in initiatives intended to enhance productivity and improve margins, and while the company will continue to provide information regarding the cost of these initiatives, it will no longer provide the pro forma impact on results.

The company's balance sheet continued on track with a debt-to-total- capital ratio of 26.3 percent, which is consistent with the company's long- term goal. During the six months ended June 30, 2004, the company's cash and short-term investments declined by approximately $789 million, compared to a decline of $684 million in the prior year period, largely due to cash used for share repurchases, which was partially offset by improvements in net cash used for operating activities. During the second quarter, the company acquired 14.2 million shares of its common stock at a cost of $245.9 million.

Second Quarter Sales by Business Unit

Mattel Brands

For the second quarter, worldwide gross sales for the Mattel Brands business unit were $513.3 million, an increase of 4 percent versus a year ago, reflecting a 1 percent decline in domestic sales offset by an 8 percent increase in international sales. Worldwide gross sales for the Barbie® brand were down 13 percent. Worldwide gross sales for the Wheels category, which includes the Hot Wheels®, Matchbox® and Tyco® R/C brands, were up 22 percent. Worldwide gross sales for the Entertainment category, which includes the Games and Puzzles segment, were up 31 percent for the quarter.

Fisher-Price® Brands

Second quarter worldwide gross sales for the Fisher-Price® Brands business unit, which includes the Fisher-Price®, PowerTouch(TM), Little People®, Rescue Heroes® and Power Wheels® brands, were $314.6 million, up 6 percent due to strong worldwide sales of core Fisher-Price® and international sales of Fisher-Price Friends.

American Girl® Brands

Second quarter gross sales for the American Girl® Brands business unit, which offers American Girl® branded products direct to consumers, were $49.1 million, up 18 percent, primarily due to sales generated by the new American Girl Place® retail store in New York City, which opened in November 2003.

About Mattel

Mattel, Inc., (NYSE: MAT, www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products, including Barbie®, the most popular fashion doll ever created. Leading the toy and game market, the Mattel family is comprised of such best-selling brands as Hot Wheels®, Matchbox®, American Girl®, and Tyco® R/C, as well as Fisher- Price brands (www.fisher-price.com), including Little People®, Rescue Heroes®, Power Wheels® and a wide array of entertainment-inspired toy lines. With worldwide headquarters in El Segundo, Calif., Mattel employs more than 25,000 people in 36 countries and sells products in more than 150 nations throughout the world. The Mattel vision is to be the world's premier toy brands -- today and tomorrow.

Hasbro Reports Second Quarter 2004 Results

PAWTUCKET, R.I. -- July 16, 2004 -- Highlights:

• Cost efficiency efforts drove consistent earnings per share year over year, despite revenue reduction;
• Revenue reduction primarily attributable to anticipated decline in BEYBLADE;
• Strong growth in Games segment, with launch of DUEL MASTERS trading card game, and strength in pre-school and electronic games;
• MY LITTLE PONY, EASY BAKE, MONOPOLY and SUPER SOAKER all solid performers;
• Significantly more new product launches planned for the second half of 2004 vs. a year ago, including VIDEONOW COLOR, LAZER TAG, TV MISSION: PAINTBALL - a new plug and play game, and WEEBLES;
• Strong balance sheet reflective of overall financial strength.

Hasbro, Inc. today reported second quarter results. Worldwide net revenues for the quarter were $516.4 million compared to $581.5 million a year ago and included an $8.0 million positive impact from foreign exchange. Net earnings for the quarter were $18.8 million or $0.06 per diluted share, compared to net earnings of $11.4 million or $0.06 per diluted share in 2003. In accordance with accounting rules, reported diluted earnings per share for the 2004 results exclude the favorable earnings impact of the $8.5 million adjustment to fair value of the Lucas warrants. The Company also reported second quarter Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $63.7 million compared to $66.8 million in 2003. The attached schedules provide a reconciliation of EBITDA to net earnings for the second quarters and six-month periods of 2004 and 2003.

Alfred J. Verrecchia, President and Chief Executive Officer, said, "Given our top-line performance and the difficult product comparison we had this quarter with BEYBLADE, which was down an aggregate of $81 million from a year ago in the U.S. Toys and International segments, I am pleased with the bottom line results we achieved.

"Despite the anticipated full year decline from BEYBLADE and the continued uncertainty at retail, we remain confident that we can achieve our full year goal of growing revenues and earnings. Hasbro is well positioned with a strong and diversified product line. We have significantly more new product launches in the all important second half of this year compared to a year ago, including VIDEONOW COLOR, LAZER TAG, TV MISSION: PAINTBALL - a plug and play game, and WEEBLES," concluded Verrecchia.

Revenues in the U.S. Toys segment were $167.2 million for the quarter compared to $208.4 million a year ago, reflecting an overall softness in the boys business, including a decline of $34.0 million in BEYBLADE. The segment reported an operating loss of ($7.0) million for the quarter compared to an operating profit of $12.9 million last year, reflecting lower sales and a decline in gross margin.

Revenues in the Games segment were $161.6 million for the quarter compared to $148.6 million a year ago. The increase in revenue is primarily related to trading card games, including the launch of DUEL MASTERS in early March. The segment also experienced growth in the electronic and pre-school lines. The Games segment reported operating profit of $28.7 million compared to an operating profit of $25.4 million last year.

International segment revenues were $179.2 million for the quarter compared to $203.8 million a year ago. The decline was primarily attributable to BEYBLADE, down approximately $47 million compared to a year ago, which offset strong performance from a number of core brands, including MAGIC: THE GATHERING, MONOPOLY, PLAYSKOOL, TRANSFORMERS and MY LITTLE PONY. The International segment reported an operating profit of $2.8 million compared to a loss of ($4.8) million a year ago.

"Due to our efforts over the last three and a half years to reduce overhead by $200 million and build a more sustainable business focused on our core brand drivers, which were up year to date - - we were able to deliver earnings per share consistent with last year, despite the BEYBLADE revenue reduction," said David Hargreaves, Chief Financial Officer. "We continue to believe we are on track to grow revenue and increase earnings this year."

Hasbro is a worldwide leader in children's and family leisure time and entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. Both internationally and in the U.S., its PLAYSKOOL, TONKA, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER and WIZARDS OF THE COAST brands and products provide the highest quality and most recognizable play experiences in the world.