SECURITIES AND EXCHANGE COMMISSION
                                Washington, D. C.
                                      20549


                                    FORM 10-Q




For the Quarter Ended                             Commission file number 1-2661
     June 30, 1996
- --------------------------



                              CSS INDUSTRIES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its Charter)


            Delaware                                           13-1920657
- -------------------------------                          ---------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                           Identification number)




 1845 Walnut Street, Philadelphia, PA                                 19103
- ----------------------------------------                            ----------
(Address of principal executive offices)                            (Zip Code)




                                 (215) 569-9900
              ----------------------------------------------------
              (Registrant's telephone number, including area code)



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 June 30, 1996,  there were 10,721,516  shares of Common Stock  outstanding
which excludes shares which may still be issued upon exercise of stock options.




                                  Page 1 of 11






                      CSS INDUSTRIES, INC. AND SUBSIDIARIES

                                      INDEX



PART I - FINANCIAL INFORMATION


In the opinion of management,  the accompanying unaudited consolidated condensed
financial  statements  contain all  adjustments  necessary to present fairly the
financial  position  as of June 30,  1996,  December  31,  1995,  the results of
operations  for the three months and six months ended June 30, 1996 and 1995 and
the cash flows for the six months ended June 30, 1996 and 1995.  The results for
the three months and six months ended June 30, 1996 and 1995 are not necessarily
indicative  of the  expected  results for the full year.  As certain  previously
reported  notes and footnote  disclosures  have been  omitted,  these  financial
statements  should be read in conjunction  with the latest annual report on Form
10-K, with the March 31, 1996 quarterly  report on Form 10-Q and with Part II of
this document.




                                                                      PAGE NO.
                                                                      --------

Consolidated  Statements  of Operations - Three months and 
six months ended June 30, 1996 and 1995                                  3

Consolidated Condensed Balance Sheets - June 30, 1996 and
December 31, 1995                                                        4

Consolidated Statements of Cash Flows - Six months ended
June 30, 1996 and 1995                                                   5

Notes to Consolidated Financial Statements                              6-7

Management's Discussion and Analysis of Financial Condition
and Results of Operations                                               8-9



PART II - OTHER INFORMATION

Items 4.  Submission of Matters to a Vote of Security Holders           10


SIGNATURE                                                               11




                                       -2-








                      CSS INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)




(In thousands, except
 per share amounts)

                                                                         Three Months Ended            Six Months Ended
                                                                              June 30,                     June 30,
                                                                     ------------------------       ----------------------
                                                                        1996          1995             1996        1995
                                                                     ----------    ----------       ---------   ----------

                                                                                                        
SALES                                                                   $47,305       $43,038         $94,575      $85,567
                                                                     ----------    ----------       ---------   ----------

COSTS AND EXPENSES
   Cost of sales                                                         28,528        24,432          56,016       47,740
   Selling, general and administrative expenses                          20,056        16,265          41,957       34,488
   Interest expense, net                                                  1,456           367           2,955          552
   Rental and other income, net                                             (18)         (359)           (254)        (592)
                                                                     ----------    ----------       ---------   ----------
                                                                         50,022        40,705         100,674       82,188
                                                                     ----------    ----------       ---------   ----------

(LOSS) INCOME  BEFORE INCOME
   TAXES AND MINORITY INTEREST                                           (2,717)        2,333          (6,099)       3,379

INCOME TAXES (BENEFIT) PROVISION                                         (1,104)          949          (2,519)       1,374
                                                                     ----------    ----------       ---------   ----------

(LOSS) INCOME BEFORE MINORITY INTEREST                                   (1,613)        1,384          (3,580)       2,005

MINORITY INTEREST IN INCOME OF
   SUBSIDIARIES, NET                                                        144           124             262          244
                                                                     ----------    ----------       ---------   ----------

NET (LOSS) INCOME                                                       $(1,757)      $ 1,260         $(3,842)     $ 1,761
                                                                     ==========    ==========       =========   ==========


NET (LOSS) INCOME PER COMMON SHARE
     Primary                                                         $(     .16)   $      .12       $(    .35)  $      .16
                                                                     ==========    ==========       =========   ==========
     Fully diluted                                                   $(     .16)   $      .12       $(    .35)  $      .16
                                                                     ==========    ==========       =========   ==========

WEIGHTED AVERAGE SHARES OUTSTANDING
     Primary                                                             11,082        10,821          11,019       10,942
                                                                     ==========    ==========       =========   ==========
     Fully diluted                                                       11,082        10,895          11,058       11,025
                                                                     ==========    ==========       =========   ==========


CASH DIVIDENDS PER SHARE OF COMMON STOCK                             $        -    $        -       $       -   $       -
                                                                     ==========    ==========       =========   ==========









                 See notes to consolidated financial statements.

                                       -3-








                      CSS INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEETS





(In thousands)


                                                                                 June 30,            December 31,
                                                                                  1996                   1995
                                                                               -----------           -----------
                                                                               (Unaudited)

            ASSETS

                                                                                                
CURRENT ASSETS
    Cash and temporary investments                                                 $ 3,087             $   3,102
    Marketable securities                                                              275                   800
    Accounts receivable, net                                                        33,170               174,832
    Inventories                                                                    136,935                76,397
    Deferred taxes                                                                   7,226                   -
    Other current assets                                                             9,129                 8,349
                                                                               -----------           -----------

       Total current assets                                                        189,822               263,480
                                                                               -----------           -----------

PROPERTY, PLANT AND EQUIPMENT, NET                                                  49,396                44,995
                                                                               -----------           -----------

OTHER ASSETS
    Intangible assets                                                               49,045                50,019
    Deferred income taxes                                                            1,803                 1,829
    Other                                                                           14,831                14,638
                                                                               -----------           -----------

        Total other assets                                                          65,679                66,486
                                                                               -----------           -----------

        Total assets                                                              $304,897              $374,961
                                                                               ===========           ===========

    LIABILITIES AND SHAREHOLDERS' EQUITY

TOTAL CURRENT LIABILITIES                                                         $132,121              $197,085

LONG-TERM OBLIGATIONS                                                               19,237                20,412

MINORITY INTEREST                                                                    3,676                 3,608

SHAREHOLDERS' EQUITY                                                               149,863               153,856
                                                                               -----------           -----------

        Total liabilities and shareholders' equity                                $304,897              $374,961
                                                                               ===========           ===========









                 See notes to consolidated financial statements.

                                       -4-







                      CSS INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



(In thousands)
                                                                                        Six Months Ended
                                                                                             June 30,
                                                                                 ------------------------------
                                                                                    1996                 1995
                                                                                 ---------             --------
                                                                                                 
Cash flows from operating activities: 
    Net (loss) income                                                            ($ 3,842)             $  1,761
                                                                                 ---------             --------
    Adjustments to reconcile net income to net cash
       provided by operating activities:
       Depreciation and amortization                                                3,967                 3,928
       Gain on sale of assets, net                                                    (29)                 (107)
       Gain on sale of marketable securities                                         (146)                   -
       Deferred tax benefit                                                        (9,299)                   -
       Provision for doubtful accounts                                                551                   493
       Minority interest in income of subsidiaries                                    262                   244
       Changes in assets  and  liabilities,  net of  effects  from
          purchase of business:
          Decrease in accounts receivable                                         141,111                27,248
          (Increase) in inventory                                                 (60,538)              (35,520)
          (Increase) in other assets                                                 (973)                 (682)
          (Decrease) in accrued expenses                                          (11,984)               (3,817)
                                                                                 ---------             --------

             Total adjustments                                                     62,922                (8,213)
                                                                                 ---------             --------

             Net cash provided by (used for) operating activities                  59,080                (6,452)
                                                                                 ---------             --------

Cash flows from investing activities:
    Purchase of marketable securities                                                  -                 (2,080)
    Purchase of  businesses                                                            -                 (8,740)
    Purchase of property, plant and equipment                                      (8,828)               (5,042)
    Proceeds on sale of marketable securities                                         424                   349
    Proceeds on sale of property, plant and equipment                                 897                    28
                                                                                 ---------             --------

             Net cash (used for) investing activities                              (7,507)              (15,485)
                                                                                 ---------             --------

Cash flows from financing activities:
    Payments on long-term obligations                                              (6,208)               (1,655)
    (Repayment of) borrowings on note payable                                     (45,288)               21,961
    Purchase of treasury stock                                                         -                 (5,254)
    Redemption of subsidiary stock from minority shareholders                        (194)                    -
    Proceeds from exercise of stock options                                           120                     4
                                                                                 ---------             --------

             Net cash (used for) provided by  financing activities                (51,570)               15,056
                                                                                 ---------             --------

Effect of exchange rate changes on cash                                               (18)                   29
                                                                                 ---------             --------
Net decrease in cash and temporary investments                                        (15)               (6,852)

Cash and temporary investments at beginning of period                               3,102                 8,774
                                                                                 ---------             --------
Cash and temporary investments at end of period                                  $  3,087              $  1,922
                                                                                 =========             ========



                 See notes to consolidated financial statements.

                                       -5-







                      CSS INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 1996


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

      Principles of Consolidation-

      The consolidated  financial statements include the accounts of the Company
         and all  subsidiaries.  All significant  intercompany  transactions and
         accounts have been eliminated in consolidation  and all adjustments are
         of a normal  recurring  nature.  Translation  adjustments  of a foreign
         subsidiary  are  charged  or  credited  to  a  separate   component  of
         shareholders' equity.

      Nature of Business-

      CSS is a diversified  company with two groups of businesses - the Consumer
         Products  Group  and the  Direct  Mail  Business  Products  Group.  The
         Consumer  Products Group is primarily  engaged in the  manufacture  and
         sale to mass market  retailers of seasonal gift wrap, gift bags,  boxed
         greeting  cards,  gift  tags,  tissue  paper  and  vinyl   decorations,
         classroom exchange  Valentines,  decorative ribbons and bows, Halloween
         masks,  costumes,  make-ups  and  novelties  and  Easter  egg  dyes and
         novelties.  Due to the seasonality of the Consumer  Products Group with
         the  majority of sales  occurring in the third and fourth  quarters,  a
         material portion of the Company's trade receivables are due in December
         and January of each year.  The Consumer  Products Group is comprised of
         The Paper Magic Group, Inc. ("Paper Magic"), acquired by the Company in
         August 1988,  Berwick  Industries,  Inc.  ("Berwick"),  acquired in May
         1993,  and Cleo Inc.  ("Cleo"),  acquired in November  1995. The Direct
         Mail Business  Products  Group,  composed of  Rapidforms,  Inc. and its
         subsidiaries   ("Rapidforms"),   develops  and  sells  business  forms,
         business  supplies,  in-store retail  merchandising  products,  holiday
         greeting  cards and  advertising  specialties to small and medium sized
         businesses  in the  United  States,  the  United  Kingdom  and  France,
         primarily  through  the  direct  mailing  of  catalogs  and  brochures.
         Rapidforms was acquired by CSS in January 1985.

      Use of Estimates-

      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.

      Inventories-

      Inventories  are  stated  primarily  at the lower of  first-in,  first-out
         (FIFO) cost or market. The remaining portion of the inventory is valued
         at  the  lower  of  last-in,  first-out  cost  or  market.  Inventories
         consisted of the following:



                                                           June 30,             December 31,
                                                             1996                   1995
                                                         --------------        -------------

                                                                                  
                  Raw material...................          $ 21,012,000         $21,926,000
                  Work-in-process................            32,611,000          13,196,000
                  Finished goods.................            83,312,000          41,275,000
                                                          -------------         -----------
                                                           $136,935,000         $76,397,000
                                                          =============         ===========




                                       -6-






      Revenue Recognition-

      The Company recognizes  revenues in  accordance  with its shipping  terms.
         Returns  and  allowances  are  reserved  for  based  on  the  Company's
         historical experience.

      Net (Loss) Income Per Common Share-

      Primary net  (loss)  income  per  common  share  is based on the  weighted
         average  number of common  and  common  equivalent  shares  outstanding
         during the second quarter and six months ended June 30, 1996 and 1995 -
         11,081,778  and  11,018,821 in 1996 and  10,820,945  and  10,942,211 in
         1995.  Average  outstanding  shares  used in the  computation  of fully
         diluted net (loss) income per share were  11,081,778  and 11,057,682 in
         1996 and 10,895,245 and 11,024,911 in 1995.

      Statements of Cash Flows-

      For purposes of the  statements of cash flows,  the Company  considers all
         holdings of highly liquid debt  instruments  with original  maturity of
         less than three months to be temporary investments.

      See Note 2 for supplemental disclosure of noncash investing activities.


(2)  BUSINESS ACQUISITIONS AND DIVESTITURES:

    CSS acquired all of the outstanding  stock of Cleo,  effective  November 15,
1995,  for  approximately  $108,500,000  in cash and  $24,547,000  in short-term
notes.  The purchase price includes  $12,000,000 held in escrow for certain post
closing adjustments and  indemnification  obligations which is included in other
assets in the  consolidated  balance  sheet.  The  Company  and the seller  have
disagreed  on the  disbursement  of the escrow and have  engaged an  independent
public accounting firm to resolve the disputed items. Cleo designs, manufactures
and distributes a wide range of promotional  gift wrap and gift wrap accessories
to mass market  retailers in the United States and Canada.  The  acquisition was
accounted  for as a purchase  and the excess of  historical  book value over the
purchase price resulted in a $28,528,000  reduction to fixed assets,  an accrual
for  restructuring  expenses  of  $11,000,000,  and  a  credit  to  goodwill  of
$7,562,000.   Negative   goodwill  is  included  in  intangible  assets  in  the
accompanying consolidated balance sheet and is being amortized over ten years.

      On June 6, 1995, Paper Magic acquired  substantially all of the assets and
the business of Topstone  Industries,  Inc.  ("Topstone") and Illusive Concepts,
Inc. ("Illusive Concepts").  Topstone designs, markets and distributes Halloween
masks,  wigs,  costumes,  accessories and novelties sold to mass  merchandisers,
drug chains and party  stores.  Illusive  Concepts  designs  and markets  highly
crafted latex masks,  collectibles,  accessories  and  decorative  displays sold
primarily to party and gift shops.  In  consideration  for the purchase of these
businesses, Paper Magic assumed and paid off $8,740,000 of outstanding debt. The
acquisition  was  accounted  for as a purchase  and the excess of cost over fair
market  value  of  $3,558,000  was  recorded  as  goodwill  in the  accompanying
consolidated balance sheet and is being amortized over forty years.


(3)  SUBSEQUENT EVENT:

      On August 1, 1996, CSS utilized  proceeds from its $195,000,000  unsecured
revolving  credit  facility  to redeem  the  outstanding  principal  balance  of
$12,880,000 related to economic  development revenue bonds assumed in connection
with the acquisition of Cleo.




                                       -7-







                      CSS INDUSTRIES, INC. AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                       CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS

     On November  15, 1995 CSS acquired  all of the  outstanding  stock of Cleo.
Cleo designs, manufactures and distributes a wide range of promotional gift wrap
and gift wrap  accessories  to mass market  retailers  in the United  States and
Canada. As over 90% of Cleo's business is Christmas related,  the seasonality of
the Company's  operating  results will be more pronounced then in the past, with
losses in the first half and higher profits in the second half. Comparisons with
prior periods will be distorted  until Cleo has been a part of CSS for more than
a year.

     Concurrent  with the  acquisition of Cleo, CSS divided its businesses  into
two distinct  business units - the Consumer  Products Group , comprised of Paper
Magic, Berwick and Cleo, and the Direct Mail Business Products Group,  comprised
of Rapidforms and its subsidiaries.


First Six Months of 1996 Compared to First Six Months of 1995

     Consolidated  sales for the six months ended June 30, 1996 increased by 11%
to  $94,575,000  from  $85,567,000  in 1995.  This  increase in sales was mainly
attributable  to the inclusion of  nonseasonal  sales of Cleo.  Excluding  Cleo,
sales  decreased  3%  primarily  due to the  timing  of  Paper  Magic  Christmas
shipments  and lower sales of  nonseasonal  Berwick  merchandise,  net of higher
direct mail sales at Rapidforms.

     Cost of sales, as a percentage of sales, was 59% in 1996 compared to 56% in
1995.  The increase in the  percentage of cost of sales was primarily  caused by
margins at Cleo which were  negatively  affected by the volume of closeout sales
in the first six months of 1996. Selling, general and administrative expenses as
a percentage  of sales  increased to 44% from 40% in 1995.  The increase was the
result of lower sales at Berwick and incremental Cleo expenses on seasonally low
sales volume.

        Interest  expense,  net of  $2,955,000  increased  from $552,000 in 1995
reflecting  the increased  seasonal  borrowing  needs and the  acquisition  debt
associated  with Cleo.  Rental and other  income,  net was $254,000  compared to
$592,000 in 1995.

     Income taxes as a  percentage  of (loss)  income  before taxes and minority
interest was 41% in 1996 and 1995.

     The net loss for the six months ended June 30, 1996 was $3,482,000, or $.35
per share compared to net income of  $1,761,000,  or $.16 per share in 1995. The
loss for the six month period primarily  reflected the more pronounced  seasonal
orientation of CSS results as discussed above.


Second Quarter 1996 Compared to Second Quarter 1995

     Second  quarter 1996 sales  compared to the prior year  increased by 10% to
$47,305,000  from $43,038,000 in 1995.  Incremental  Cleo nonseasonal  sales and
higher  Rapidforms direct mail sales were somewhat offset by the timing of Paper
Magic Christmas shipments and lower sales of Berwick nonseasonal merchandise.


                                       -8-








     During the second  quarter,  cost of sales as a percentage of sales was 60%
in 1996 and 57% in 1995, while selling, general and administrative expenses as a
percentage  of  sales  were 42% in 1996 and 38% in  1995.  The  reasons  for the
changes in  operating  percentages  relate  primarily  to lower  margins on Cleo
closeout  shipments and  incremental  expenses on seasonally low sales volume of
Cleo explained above in the six month narrative.

     The increase in interest  expense to  $1,456,000  from $367,000 in 1995 was
due to  higher  debt  requirements  caused  by the  acquisition  of Cleo and the
funding of Cleo's seasonal working capital requirements.

     For the second quarter,  the Company incurred a net loss of $1,757,000,  or
$.16 per share compared to net income of $1,260,000,  or $.12 per share in 1995.
The net loss is a product of the Company's more pronounced seasonal orientation.


LIQUIDITY AND CAPITAL RESOURCES

     At June 30,  1996,  the  Company  had working  capital of  $57,701,000  and
shareholders' equity of $149,863,000.

     The Company  relies  primarily on cash  generated  from its  operations and
seasonal  borrowings  to meet its liquidity  requirements.  Most of the Consumer
Products  Group (Paper Magic,  Berwick and Cleo) revenues are seasonal with more
than 80% of  Consumer  Products  Group  sales,  and 75% of total  Company  sales
generated in the second half of the year. Payment for Christmas related products
is usually  not  received  until after the holiday in  accordance  with  general
industry practice.  As a result,  short-term borrowing needs increase throughout
the  second  and  third  quarters,  peaking  prior  to  Christmas  and  dropping
thereafter.   Seasonal  borrowings  are  made  under  a  $195,000,000  unsecured
revolving  credit facility with thirteen banks and financial  institutions.  The
facility  is  available  to fund the  seasonal  borrowing  needs and provide the
Company  with a source of capital for general  corporate  purposes.  At June 30,
1996, there was $81,785,000  outstanding under this facility. To supplement this
facility,  the Company intends to enter into a $20,000,000 term note maturing on
December 31, 1996.

     Based on its current  operating  plan, the Company  believes its sources of
available  capital  are  adequate  to  meet  its  ongoing  cash  needs  for  the
foreseeable future.





















                                       -9-







                      CSS INDUSTRIES, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


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

         (a)    The annual meeting of shareholders of the Registrant was held
                on May 7, 1996.

         (b)    The  following  were  elected  to  serve  as  Directors  of  the
                Registrant  until  the  next  annual  meeting  and  until  their
                successors shall be elected and qualify:

                                               SHARES OF VOTING STOCK
                                            ------------------------------

                                               FOR               WITHHELD
                                            ---------            --------

               James G. Baxter              9,203,852             190,193

               Willard M. Bright            9,318,336              75,709

               James H. Bromley             9,318,768              75,277

               John R. Bunting, Jr.         9,318,368              75,677

               Stephen V. Dubin             9,318,768              75,277

               Jack Farber                  9,318,668              75,377

               Richard G. Gilmore           9,318,768              75,277

               Leonard E. Grossman          9,318,468              75,577

               James E. Ksansnak            9,318,768              75,277

               Michael L. Sanyour           9,318,768              75,277

               William C. Warren            9,318,136              75,909


         (c)    The result of the vote of the  stockholders  on the  proposal to
                adopt and approve the CSS  Industries,  Inc.  1995 Stock  Option
                Plan for Non-Employee Directors was as follows:

                           For                            8,747,180
                           Against                          567,591
                           Abstain                           16,041
                           No Vote                           63,233

         (d)    The results of the vote of the  stockholders  on the proposal to
                adopt and approve the amendment to the CSS Industries, Inc. 1994
                Equity Compensation Plan was as follows:

                           For                            9,051,695
                           Against                          260,801
                           Abstain                           18,316
                           No Vote                           63,233


                                      -10-











                                    SIGNATURE






     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.







                                            CSS INDUSTRIES, INC.
                                            -----------------------------------
                                            (Registrant)




Date:  August 8, 1996                   By: /s/James G. Baxter
                                            -----------------------------------
                                            James G. Baxter
                                            President - Consumer Products Group,
                                            Chief Financial Officer and
                                            Principal Accounting Officer





















                                      -11-