Coleco Net Surges Sixfold on Cabbage Patch Craze

Coleco Industries said first-quarter profit soared more than six times from year-earlier results, thanks to sales of Cabbage Patch Kids. Profit surged to $27.4 million from $4.4 million in the same period of 1984. Sales climbed 4.3% to $194 million.

Earnings included a one-time credit of $8 million, representing tax benefits earned in previous years.

“In excess of $150 million in Cabbage Patch Kids products were shipped in the first quarter, more than twice the amount shipped in the first quarter of 1984,” said Arnold C. Greenberg, Coleco president and chief executive.

A company spokesman said Coleco has also found better terms for selling its inventory of its failed Adam computer.

Spokesman Morton E. Handel said the company exercised its right to cancel an agreement to sell the inventory to a company that had been identified by retailing sources as Odd Lot Trading.

Instead, he said, the company has contracted to sell all of its remaining Adam inventory to Toys ‘R’ Us, Zayre Corp., Lionel Leisure, Kay-Bee Toy & Hobby Shops and Best Products.

“They have been selling the Adams at $300 for the past couple of months very successfully, and they have contracted to purchase all our remaining inventory at prices somewhat more favorable to Coleco than the earlier transaction,” Handel said.