SECURITIES AND EXCHANGE COMMISSION
                                    Washington, D.C. 20549

                                           FORM 10-Q

[X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities 
     Exchange Act of 1934

                    For the quarterly period ended June 30, 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 1-12271



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


        DELAWARE                                                      06-1428605
(State or other jurisdiction of incorporation   (I.R.S. Employer Identification
            or organization)                                     Number)


                      64 Ross Road, Savannah Industrial Park
                              Savannah, Georgia 31405
           (Address, including zip code, of principal executive offices)



        Registrant's telephone number, including area code:(912) 651-3400




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


     At July 30,  1997,  5,033,248  shares  of the  registrant's  Class A Common
Stock, par value $0.01 per share,  1,859,677 shares of the registrant's  Class B
Common  Stock,   par  value  $0.01  per  share,  and  8,127,937  shares  of  the
registrant's Class C Common Stock, par value $0.01 per share were outstanding.


<PAGE>




                                 CARSON, INC.

                                     INDEX

Part I.  Financial Information                                          Page

         Item 1.

         Condensed Consolidated Balance Sheets
         June 30, 1997 and December 31, 1996................................  3

         Condensed Consolidated Statements of Operations
         Three and Six Months Ended June 30, 1997 and 1996..................  4

         Condensed Consolidated Statements of Cash Flow
         Six Months Ended June 30, 1997 and 1996............................ 5

         Notes to Condensed Consolidated Financial Statements............... 6-8

         Item 2.

         Management's Discussion and Analysis of Financial Condition
         and Results of Operations..........................................9-13


Part II.  Other Information.................................................14



         Signatures......................................................... 15


<PAGE>

Carson, Inc.
Condensed Consolidated Balance Sheets
June 30, 1997 and December 31, 1996
(In thousands)

<TABLE>

                                                                                 June 30,                 December 31,
                       ASSETS                                                      1997                       1996
                                                                                (Unaudited)                (Restated)
                                                                                                          (See note 6)
 <S>                                                                       <C>                        <C>    
CURRENT ASSETS:
     Cash and cash equivalents                                            $             6,555        $             4,191
     Accounts receivable (less allowance for doubtful accounts and returns of $2,381
          and $614 at June 30, 1997 and December 31, 1996, respectively)               21,863                     15,117
     Inventories, net                                                                  16,072                     10,572
     Other current assets                                                               1,227                      1,346
          Total current assets                                                         45,717                     31,226

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation                         18,130                     15,089

INVESTMENT IN AM COSMETICS                                                              3,381                      3,187

GOODWILL, net                                                                          91,848                     45,801

OTHER ASSETS                                                                            6,027                      2,151

          TOTAL ASSETS                                                    $           165,103        $            97,454


                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                                     $             6,193        $             7,065
     Accrued expenses                                                                   4,919                      5,709
     Income taxes payable                                                               2,281                         --
     Current maturities of long-term debt                                               3,000                      2,600
          Total current liabilities                                                    16,393                     15,374

LONG-TERM DEBT                                                                         84,789                     24,501

MINORITY INTEREST IN SUBSIDIARY                                                         3,996                      1,664

DEFERRED INCOME TAXES AND OTHER LIABILITIES                                             1,720                      1,700

STOCKHOLDERS' EQUITY:
     Preferred stock                                                                       --                         --
     Common stock                                                                         150                        150
     Paid-in capital                                                                   62,878                     62,418
     Accumulated deficit                                                               (2,726)                    (5,679)
     Note receivable from employee shareholders, net of discount                       (1,413)                    (1,365)
     Foreign currency translation adjustment                                             (684)                    (1,309)
          Total stockholders' equity                                                   58,205                     54,215

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $           165,103        $            97,454



See notes to condensed consolidated financial statements.

</TABLE>


<PAGE>


Carson, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
For the Three and Six Months Ended June 30, 1997 and 1996
(In thousands, except per share data)

<TABLE>

                                       Three Months Ended June 30,     Six Months Ended June 30,
                                        1997          1996            1997            1996
                                                                                   (Restated)
                                                                                   (See note 6)


<S>                                     <C>              <C>         <C>          <C>      
NET SALES                               $ 30,234         $18,799     $48,166      $  36,591
COST OF GOODS SOLD                        13,996           8,135      21,876         16,118
GROSS PROFIT                              16,238          10,664      26,290         20,473

EXPENSES:
     Marketing and selling                 6,553           4,713      12,277          8,165
     General and administrative            4,418           3,389       7,147          6,530
                                          10,971           8,102      19,424         14,695

OPERATING INCOME                           5,267           2,562       6,866          5,778

INTEREST EXPENSE                          (1,511)         (1,826)     (2,115)        (3,673)
OTHER INCOME, net                            171              38         394            184

INCOME BEFORE INCOME TAXES                 3,927             774       5,145          2,289

PROVISION FOR INCOME TAXES                 1,661             466       2,197          1,215

NET INCOME                              $  2,266         $   308     $ 2,948      $   1,074

NET INCOME PER SHARE                    $   0.15         $  0.03     $  0.20      $    0.09

WEIGHTED AVERAGE COMMON
     SHARES OUTSTANDING                   14,984          11,871      14,984         11,871


See notes to condensed consolidated financial statements.

</TABLE>


<PAGE>

CARSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(IN THOUSANDS)

<TABLE>

                                                                      Six months ended June 30,
                                                                    1997             1996
                                                                                   (Restated)
                                                                                  (See note 6)
<S>                                                              <C>               <C>
OPERATING ACTIVITIES:
     Net income                                                  $    2,948        $   1,074
     Adjustments to reconcile net income to
        net cash used in operating activities:
               Depreciation and amortization                          1,570            1,185
               Other, net                                              (943)          (2,023)
               Minority interest in earnings of subsidiary              322               --
               Foreign currency translation adjustment                  625              (36)
               Changes in operating assets and liabilities,
                 net of acquisitions
                         Accounts receivable                         (6,634)          (3,377)
                         Inventories                                 (3,556)          (1,344)
                         Other current assets                          (454)             263
                         Accounts payable                            (1,928)           1,033
                         Income taxes payable                         2,281             (168)
                         Accrued expenses                            (1,021)             255
                              Total adjustments                      (9,738)          (4,212)
               Net cash used in operating activities                 (6,790)          (3,138)

INVESTING ACTIVITIES:
     Additions to property, plant and equipment                      (3,585)          (1,401)
     Acquisitions of business assets, net of cash acquired          (49,406)              --
               Net cash used in investing activities                (52,991)          (1,401)

FINANCING ACTIVITIES:
     Proceeds from long-term borrowings                              62,100            5,276
     Principal payments on long-term debt                            (1,412)            (500)
     Other, net                                                         (68)             138
     Proceeds from equity rights offering                             1,525               --
     Proceeds from sale of common stock                                  --              114
               Net cash provided by financing activities             62,145            5,028

NET INCREASE IN CASH AND CASH EQUIVALENTS                             2,364              489
CASH AND CASH EQUIVALENTS AND BEGINNING OF PERIOD                     4,191              378
CASH AND CASH EQUIVALENTS AT END OF PERIOD                       $    6,555        $     867





See notes to condensed consolidated financial statements.

</TABLE>


<PAGE>

                                 CARSON, INC
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  Basis of Presentation

    The accompanying  condensed  consolidated  interim  financial  statements of
Carson, Inc. (the "Company") presented herein have been prepared by the Company,
without  audit,  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in annual  financial  statements  prepared in accordance with generally
accepted  accounting  principles  have  been  omitted  from  these  consolidated
financial  statements  pursuant  to  applicable  rules  and  regulations  of the
Securities and Exchange Commission. These financial statements should be read in
conjunction  with the audited  Consolidated  Financial  Statements and the notes
thereto of the Company's 1996 Transition  Report on Form 10-K. In the opinion of
management,  the accompanying  unaudited financial statements contain all normal
recurring  adjustments  necessary  to  present  fairly the  Company's  financial
position,  results of operations and cash flows at the dates and for the periods
presented.  Interim results of operations are not necessarily  indicative of the
results to be expected for a full year.  Certain prior period  amounts have been
reclassified to conform with the current period presentation.

2.  Inventories

    Inventories are summarized as follows (in thousands):

                                                                 (Restated)
                                         June 30, 1997       December 31, 1996
                                        --------------  ----------------------
Raw materials                                   $9,130                  $7,017
Work-in-process                                  1,671                   1,236
Finished goods                                   5,271                   2,319
                                        --------------  ----------------------
                                               $16,072                 $10,572
                                        ==============  ======================



The June 30, 1997 and December 30, 1996 inventory  balances are net of valuation
allowances of $2.7 million and $181 thousand, respectively.


                                                         6

<PAGE>




3.   Acquisitions

         During March 1997, the Company entered into an Asset Purchase Agreement
with  Conopco,  Inc.  d/b/a  Chesebrough-Pond's  USA Co. in order to acquire the
rights to manufacture and market Cutex in the United States and Puerto Rico (the
"Cutex  acquisition").  Cutex is the leading brand of nail polish remover and is
also a line of nail  enamels.  The purchase  price  approximated  $41.4  million
including  amounts paid to  Chesebrough-Pond's  of $37.5  million and  inventory
acquired of $3.9 million.  In addition,  the Company incurred direct acquisition
fees and expenses of $1.4 million  including  allowances  for returned goods and
obsolete  inventory.  This acquisition has been accounted for under the purchase
method of accounting and the results of the operations have been included in the
condensed consolidated financial statements since the date of acquisition. Funds
were provided by additional  long-term debt and the transaction was completed on
April 30, 1997.

         During March 1997,  concurrent with the Cutex acquisition,  the Company
entered into an Asset Repurchase Agreement with Jean Philippe  Fragrances,  Inc.
On April 30, 1997, in connection  with the  termination  of a license  agreement
between Conopco, Inc. and Jean Philippe Fragrances,  Inc. by Carson as successor
in interest to Conopco,  Inc.,  Carson acquired  certain assets of Jean Philippe
Fragrances, Inc. used in the packaging,  distributing and selling of nail enamel
and nail care treatment  products,  nail care  implements and lipstick under the
trademark Cutex in the United States and Puerto Rico.

         The  following  unaudited pro forma  information  presents a summary of
consolidated  results of  operations of the Company and the results of the Cutex
acquisition  as if the  acquisition  had  occurred as of the  beginning  of each
period presented:

(Dollars in thousands except per share amounts)

                          Three Months Ended          Six Months Ended
                              June 30,                   June 30,

                            1997       1996        1997       1996
                          ---------- ----------  ---------  ---------
Net sales                    $31,391    $23,282    $53,372    $44,447
Net income                     2,288        478      3,030      1,266
Net income per share           $0.15      $0.04      $0.20      $0.11

         These  unaudited pro forma  results have been prepared for  comparative
purposes only and include certain adjustments,  such as an adjustment to cost of
goods   sold  per  a   manufacturing   agreement   between   the   Company   and
Chesebrough-Pond's USA Co., additional goodwill amortization, additional selling
expenses  related to an  agreement  between  the Company  and AM  Cosmetics  and
additional  interest expense on acquisition debt, among others.  These unaudited
pro forma results are not necessarily indicative of what the actual consolidated
results  of  operations  might  have been if the Cutex  acquisition  had been in
effect as of the  beginning of each period  presented,  or of future  results of
operations of the consolidated  Company. The pro forma six months ended June 30,
1996  reflects the change from last-in,  first-out  (LIFO) cost or market to the
lower of first-in, first-out (FIFO) cost or market.

         During April 1997, the Company  completed the  acquisition of the Let's
Jam product line. This acquisition adds one of the leading hair care maintenance
brands in the ethnic  retail market to the  Company's  portfolio of brands.  The
purchase  price was  approximately  $5.6  million  cash with funds  provided  by
additional  long-term  debt.  This  acquisition has been accounted for under the
purchase method of accounting.

     In addition,  Carson Holdings Ltd. acquired the assets of Seasilk in a cash
transaction for $605 thousand. This acquisition has been accounted for under the
purchase method of accounting.

4.  New Accounting Pronouncement

     The  Financial  Accounting  Standards  Board issued  Statement of Financial
Accounting  Standards  ("SFAS") No. 128,  "Earnings Per Share" in February 1997.
SFAS No. 128  replaces  the  presentation  of primary  earnings per share with a
presentation of basic earnings per share and requires dual presentation of basic
and diluted earnings per share on the
                                                         7

<PAGE>



     face  of the  income  statement  for  all  entities  with  complex  capital
structures. SFAS No. 128 is effective for both interim and annual periods ending
after  December 15, 1997. The Company  currently has a simple capital  structure
and therefore expects no material effect from the adoption of SFAS No. 128.

         In June 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 130,  "Reporting  Comprehensive  Income"
("SFAS No.  130") and  Statement  of  Financial  Accounting  Standards  No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS No.
131").  The  Company  will  adopt  SFAS No.  130 and 131 in 1998.  SFAS No.  130
establishes standards for reporting and displaying  comprehensive income and its
components   (revenues,   expenses,   gains  and   losses)  in  a  full  set  of
general-purpose financial statements. Management expects to report comprehensive
income for the effects of foreign  currency  translation  adjustments  which are
currently reported as a change in shareholders' equity. SFAS No. 131 establishes
standards for the way that public business  enterprises report information about
operating  segments  in annual  financial  statements  and  requires  that those
enterprises  report selected  information  about  operating  segments in interim
financial  reports issued to shareholders.  Management is currently  determining
the  effect,  if  any,  SFAS  No.  131  will  have  on the  annual  and  interim
consolidated financial statements of the Company.

5.  Credit Facility

         On April 30,  1997,  the Company  entered  into an Amended and Restated
Credit  Agreement  with Banque  Indosuez,  New York  Branch,  as agent,  and the
lenders named therein.  The Amended and Restated Credit  Agreement  replaced the
Company's existing $40 million senior credit facility with a $100 million senior
credit  facility  consisting  of $25  million in Term A loans  maturing in April
2002,  $50  million in Term B loans  maturing  in April 2004 and $25  million in
revolving loan commitments  maturing in April 2002. The proceeds of the new term
loans were used in part to finance the Cutex  acquisition.  In  connection  with
this refinancing, the Company incurred debt issuance costs of approximately $2.6
million, including $520 thousand paid to Morningside Capital Group, L.L.C.

6.  Change in Accounting Method

         During the second  quarter of 1997,  the Company  changed its method of
valuing  inventories  in the United States from the lower of last-in,  first-out
(LIFO) cost or market to the lower of first-in,  first-out (FIFO) cost or market
in order to provide  conformity among  subsidiaries due to recent  acquisitions.
The effect of this change has been  reflected in all periods  presented in these
financial  statements.  This change in valuing  inventories was made in order to
provide conformity among all of the Company's subsidiaries as well as to conform
with  general  industry  practices.  As a result of this  change  in  accounting
method,  cost of goods sold  increased  and net income  decreased  for the three
months ended March 31, 1996 by $177 thousand and $102 thousand, respectively. In
addition,  inventories  as of December  31,  1996  decreased  by $177  thousand,
retained earnings  decreased by $102 thousand and accrued income taxes decreased
by $75 thousand. The effect on all other periods presented was not significant.

7.  Year 2000 Computer Problem

         Many computer  applications were created with a two digit field for the
year in the date field,  and as a result,  such  applications may fail or create
erroneous  results by the year 2000 unless  corrective  measures are taken.  The
Company has  evaluated the extent of any problems and  corrective  measures have
been  taken to  ensure  that the  upcoming  change  of  century  will not have a
significant impact on future results of operations.

                                                         8

<PAGE>



                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition

OVERVIEW

Forward Looking Statements

         This  report  on Form  10-Q as well as other  public  documents  of the
Company   contain   forward-looking   statements   which   involve   risks   and
uncertainties,  including (I) the Company's  plans to introduce new products and
product  enhancements,  (ii) the  Company's  plans to expand  its  international
operations in Africa,  Brazil,  and the Caribbean,  (iii) the Company's plans to
enter the ethnic cosmetics product  category,  (iv) the Company's plans to enter
the U.S.  professional  salon  market for  ethnic  hair care  products,  (v) the
Company's  plans  to  make  selective  acquisitions,   and  (vi)  the  Company's
marketing,  distribution and manufacturing expansion plans. The Company's actual
results  may differ  materially  from those  discussed  in such  forward-looking
statements.  When used herein and in the  Company's  future  filings,  the terms
"expects",  "plans",  "intends",  "estimates",  "projects",  or "anticipates" or
similar expressions are intended to identify forward-looking  statements (within
the meaning of Section 21E of the  Securities  Exchange Act of 1934,  as amended
(the "Exchange  Act")). In addition to risk factors that may be described in the
Company's filings with the Securities and Exchange Commission (the "Commission")
(including  this filing and the  Company's  prospectus  dated October 14, 1996),
actual   results   could  differ   materially   from  those   expressed  in  any
forward-looking  statements made by the Company.  Such risks,  uncertainties and
factors  include,  but are not  limited to,  foreign  business  risks,  industry
cyclicality,  fluctuations  in customer  demand and order pattern,  the seasonal
nature of the  business,  changes in  pricing,  the  identification  of suitable
acquisition   candidates,   changes  in  the  implementation  of  the  Company's
acquisition  plans,  and the  availability  of financing,  and general  economic
conditions,  as well as other risks  detailed in the Company's  filings with the
Securities and Exchange Commission. Additional risk factors include, but are not
limited to, the following:  (a) the Company's success in implementing its growth
strategy,  including  its success in obtaining  financing  where  required,  (b)
difficulties or delays in developing and introducing new products or the failure
of  consumers  to  accept  new  product  offerings,   (C)  changes  in  consumer
preferences,  including  reduced  consumer  demand  for  the  Company's  current
products,  (d) the  nature  and extent of future  competition  in the  Company's
principal   marketing  areas,  and  (e)  political,   economic  and  demographic
developments in the United States,  Africa,  Brazil,  the Caribbean,  Europe and
other countries where the Company now does or in the future may do business.

General
         The Company is a leading  manufacturer  and marketer in the U.S. retail
ethnic hair care market for African-Americans.  The Company currently sells over
70 different  products in the United States and in over 60 other countries under
five principal brand names. In the six months ended June 30, 1997, approximately
27.5% of the  Company's  net sales were  derived  from sales  within these other
countries.  The  majority  of the  Company's  net  sales are  derived  from four
categories  of the ethnic  health and beauty  aids  market:  hair  relaxers  and
texturizers (which  constituted  approximately 50% of the Company's net sales in
1996 and 1997), hair color, shaving products and hair care maintenance products.

        In July 1996, the Company's South African  subsidiary,  Carson Holdings,
Ltd.  ("Carson  South  Africa")  sold 25.0% of its  shares in an initial  public
offering on the  Johannesburg  Stock  Exchange.  As a result of the  issuance of
these  shares,  the Company  has  reflected  in its  consolidated  statement  of
operations for periods  subsequent to the share issuance a minority  interest in
subsidiary earnings. The amount of the charge reflected in this line item equals
Carson South  Africa's net income for the  applicable  period  multiplied by the
percentage of the Carson South Africa shares which are not  indirectly  owned by
the Company. In conjunction with the South African initial public offering,  the
Company's  U.S.  subsidiary,  Carson  Products  entered into an amendment to its
license  agreement with Carson South Africa,  which provides that  commencing on
April 1, 1998,  Carson South Africa will pay to Carson Products a royalty in the
amount  of 3.0% of the net sales of all  licensed  products.  The  amount of the
royalty  increases  to 3.5% on April 1, 1999 and 4.0% on April 1, 2000 until the
termination of the agreement. The initial term of the agreement expires on April
1,  1999;  however,  the  agreement  continues  indefinitely   thereafter  until
terminated by either party upon 12 months written notice.

        With the exception of sales in South Africa, Botswana,  Lesotho, Namibia
and Swaziland, which are denominated in South African Rand, all of the Company's
sales are  recorded in U.S.  Dollars.  The Company does not view the exposure to
Rand  exchange  rate  fluctuations  as  significant  because  the South  African
subsidiary  incurs  all of its  costs in Rand.  Assets  and  liabilities  of the
Company's  South African  operations are translated for  consolidation  purposes
from South  African Rand into U.S.  Dollars at the rate of currency  exchange at
the end of the fiscal  period.  Revenues and expenses are  translated at average
monthly prevailing exchange rates. Resulting translation differences are

                                                         9

<PAGE>



recognized as a component of stockholders' equity.

        In June  1996,  the  Company  made an  investment  of  $3.0  million  in
Morningside AM Acquisition Corp. ("AM Acquisition"), the parent of AM Cosmetics,
Inc.  ("AM  Cosmetics")  a  leading  low-cost  manufacturer  of  cosmetics.  The
investment  was made  through the  purchase of $3.0  million of 12%  cumulative,
payment-in-kind  preferred  stock.  The  Company's  consolidated  statements  of
operations for periods  subsequent to June 1996 include the dividend income from
this  investment,  although  dividends  are  anticipated  to be paid through the
issuance of additional  preferred  stock.  Therefore,  it is anticipated that no
cash will be generated  from this  investment in the near future.  In connection
with the  investment,  the Company  entered into a management  agreement and has
entered into certain related sales agreements and manufacturing  agreements with
AM Cosmetics.  Pursuant to the  agreement,  AM  Acquisition  agreed on behalf of
itself and AM  Cosmetics,  that for a period of five years  beginning on July 1,
1996,  (I) AM Cosmetics  will not  "contract  manufacture"  for any other ethnic
cosmetics  line,  (ii) AM Cosmetics  will agree to produce a cosmetics  line for
Carson Products,  as designed and directed by Carson Products,  at AM Cosmetics'
cost plus a maximum 25% markup, and (iii) AM Cosmetics will agree to provide the
necessary  research and  development  for  formulations  for the ethnic cosmetic
product  line(s) as determined  by Carson  Products,  at no  additional  cost to
Carson Products.

Results of Operations

Quarter  Ended June 30, 1997 Compared to Quarter Ended June 30, 1996

Net Sales.  Consolidated  net sales for the quarter ended June 30, 1997 of $30.2
million increased 60.8% over the same quarter in 1996. This increase in sales is
primarily a result of strong  gains in core hair care  products,  sales of which
rose 32.5%,  augmented by  incremental  net sales related to the Cutex and Let's
Jam acquisitions of $4.8 million and $539 thousand,  respectively. The Company's
domestic core business generated a sales increase of 25.6% for the quarter ended
June  30,  1997  compared  to the same  quarter  in  1996.  International  sales
including  South Africa  increased by 52.9% for the quarter ended June 30, 1997.
Carson South Africa continued to demonstrate  strong results with an increase in
net sales of 121.4% to $4.8 million in the quarter ended June 30, 1997 from $2.2
million in the quarter ended June 30, 1996.

     Gross Profit.  Gross profit increased to $16.2 million in the quarter ended
June 30,  1997 from $10.7  million in the  quarter  ended June 30,  1996.  Gross
profit margin  decreased to 53.7% from 56.7% for the quarter ended June 30, 1997
compared to the same  quarter in 1996.  The decline in gross margin is primarily
related to certain  inefficiencies in the manufacturing  process, due in part to
higher  production  volumes.   The  Company  is  currently  enhancing  material
management  processes.  Certain  low  volume  maintenance  products  are  being
outsourced to contract  packagers,  freeing the  resources of the  manufacturing
plant to concentrate on certain high volume relaxer and hair color products.


     Marketing and Selling Expenses. Marketing and selling expenses increased to
$6.6 million in the quarter ended June 30, 1997 from $4.7 million in the quarter
ended June 30, 1996, an increase of 39.0%.  As a percentage of net sales,  these
expenses  decreased to 21.7% from 25.1% during this period  caused  primarily by
the fact that the Company was in the  process of changing  advertising  agencies
early in 1996, and had ceased most advertising during this period while awaiting
new creative material.

General  and  Administrative  Expenses.   General  and  administrative  expenses
increased to $4.4  million in the quarter  ended June 30, 1997 from $3.4 million
in the quarter ended June 30, 1996, an increase of 30.4%. As a percentage of net
sales, general and administrative  expenses decreased to 14.6% from 18.0% during
this  period.  Contributing  to this  decrease  was the  incremental  net  sales
associated  with the Cutex and Let's Jam  acquisitions  during the quarter ended
June 30, 1997. Additionally,  the prior year second quarter contained a one time
incentive  compensation  charge of $800  thousand,  without  which  general  and
administrative  expenses in that quarter as a percentage of net sales would have
been 13.8%.

Operating Income and EBITDA. As a result of the above changes,  operating income
increased to $5.3  million in the quarter  ended June 30, 1997 from $2.6 million
in the quarter ended June 30, 1996.  EBITDA  increased to $6.3 million from $3.2
million  during this period.  EBITDA is  calculated  by adding  earnings  before
interest, income taxes,

                                                        10

<PAGE>



depreciation and amortization expense.

Interest  Expense.  Interest  expense  decreased  to $1.5 million in the quarter
ended June 30, 1997 from $1.8 million in the quarter  ended June 30,  1996.  The
decreased  interest  expense  is a result  of the use of the  proceeds  from the
Company's  initial  public  offering to retire  certain debt,  offset in part by
interest on the additional borrowings used to finance the Cutex acquisition.

Other Income.  Other income  increased  primarily as a result of the  management
contract  entered  into in June 1996 with AM  Cosmetics.  Under the terms of the
investment  and  the  management  agreement,  the  Company  is  entitled  to 12%
paid-in-kind  dividend on its $3.0  million  preferred  stock  investment  and a
minimum annual management fee of $0.5 million. Other income includes the effects
of these transactions in the quarter ended June 30, 1997.

Provision for Taxes. The provision for taxes increased to $1.7 million from $466
thousand  during this period.  The  effective tax rate was 42.3% for the quarter
ended June 30, 1997 compared to 60.2% for the quarter  ended June 30, 1996.  The
higher   effective   rate  for  the  1996  period  is   primarily  a  result  of
non-deductible goodwill.

Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996

     Net Sales.  Consolidated  net sales increased 31.6% to $48.2 million in the
six months ended June 30, 1997 from $36.6  million in the  comparable  period in
1996.  This increase in sales is primarily a result of a strong  performance  by
core hair care products, sales of which rose 17.1%, augmented by incremental net
sales related to the Cutex and Let's Jam  acquisitions  of $4.8 million and $539
thousand,  respectively.  The Company's domestic core business generated a sales
increase of 3.6% for the first six months of 1997. International sales including
South Africa  increased by 64.7% for the six months ended June 30, 1997.  Carson
South Africa  continued to  demonstrate  strong  results with an increase in net
sales of 100.4% to $7.4  million in the six months ended June 30, 1997 from $3.7
million in the six months ended June 30, 1996.

     Gross  Profit.  Gross profit  increased to $26.3  million in the six months
ended June 30, 1997 from $20.5  million (as  restated)  in the six months  ended
June 30, 1996.  Gross profit margin  decreased to 54.6% from 55.9% (as restated)
for the six months ended June 30, 1997 compared to the same period in 1996.  The
decline in gross margin is primarily  related to certain  inefficiencies  in the
manufacturing  process, due in part to higher production volumes. The Company is
currently   enhancing  material   management   processes.   Certain  low  volume
maintenance  products are being  outsourced to contract  packagers,  freeing the
resources  of the  manufacturing  plant to  concentrate  on certain  high volume
relaxer and hair color products.

     Marketing and Selling Expenses. Marketing and selling expenses increased to
$12.3 million in the six months ended June 30, 1997 from $8.2 million in the six
months ended June 30, 1996, an increase of 50.4%.  As a percentage of net sales,
these expenses  increased to 25.5% from 22.3% during this period  primarily as a
result of a $5.1 million  increase in  expenditures in the six months ended June
30, 1997 compared to the same period in 1996,  caused primarily by the fact that
the Company was in the process of changing  advertising  agencies early in 1996,
and had ceased most  advertising  during this period while awaiting new creative
material.

General  and  Administrative  Expenses.   General  and  administrative  expenses
increased  to $7.1  million  in the six  months  ended  June 30,  1997 from $6.5
million  in the six  months  ended  June 30,  1996,  a  increase  of 9.4%.  As a
percentage of net sales, general and administrative  expenses decreased to 14.8%
from 17.8% during this period. Contributing to this decrease was the incremental
net sales  associated with the Cutex and Let's Jam  acquisitions  during the six
months ended June 30, 1997.  Additionally,  the prior year  contained a one time
incentive  compensation  charge of $800  thousand,  without  which  general  and
administrative  expenses in that  six-month  period as a percentage of net sales
would have been 15.7%.

Operating Income and EBITDA. As a result of the above changes,  operating income
increased  to $6.9  million  in the six  months  ended  June 30,  1997 from $5.8
million in the six months ended June 30, 1996.  EBITDA increased to $8.4 million
from $7.0 million  during this period.  EBITDA is calculated by adding  earnings
before interest, income taxes, depreciation and amortization expense.

Interest  Expense.  Interest expense decreased to $2.1 million in the six months
ended June 30, 1997 from $3.7 million in the six months ended June 30, 1996. The
decreased  interest  expense  is a result  of the use of the  proceeds  from the
Company's  initial  public  offering to retire  certain debt,  offset in part by
interest on the additional borrowings used

                                                        11

<PAGE>



to finance the Cutex acquisition.

Other Income.  Other income  increased  primarily as a result of the  management
contract  entered  into in June 1996 with AM  Cosmetics.  Under the terms of the
investment  and the  management  agreement,  the  Company is  entitled  to a 12%
paid-in-kind  dividend on its $3.0  million  preferred  stock  investment  in AM
Cosmetics.  In  addition,  as a result of the  management  contract, the Company
receives a minimum annual management fee of $0.5 million.  Other income includes
the effects of these transactions in the six months ended June 30, 1997.

Provision for Taxes. The provision for taxes increased to $2.2 million from $1.2
million during this period.  The effective tax rate was 42.7% for the six months
ended June 30, 1997  compared to 53.0% for the six months  ended June 30,  1996.
The  higher  effective  rate for the  1996  period  is  primarily  a  result  of
non-deductible goodwill.

Liquidity and Capital Resources

     The Company  completed the offering (the "Offering") of 4,818,500 shares of
Class A common  stock on the New York Stock  Exchange  on October  18, 1996 at a
price of $14 per share. Of these shares  3,113,000 were sold by the Company with
the balance sold by selling stockholders,  none of which included any members of
management or the principal investors.  The Company used the net proceeds of the
Offering to repay certain indebtedness.

     In  conjunction  with the Offering,  the Company  refinanced  the remaining
portion of its Senior Bank Credit  Facility with  borrowings  under a New Senior
Bank Facility pursuant to a credit agreement dated as of October 18, 1996, which
included (I) a $15.0  million term loan A, (ii) a $10.0  million term loan B and
(iii)  a  $15.0  million   revolving  credit   facility,   which  provides  more
availability  than the current  facility.  The term loan A and revolving  credit
facility bore interest at the applicable prime rate plus 0.5% or LIBOR rate plus
2.0% and had a final maturity of six years. The term loan B bore interest at the
applicable prime rate plus 1.0% or LIBOR rate plus 2.5% and had a final maturity
of seven years.

     On April 30, 1997, the Company  entered into an Amended and Restated Credit
Agreement with Banque Indosuez, New York Branch, as agent, and the lenders named
therein.  The Amended and  Restated  Credit  Agreement  replaced  the  Company's
existing $40 million  senior credit  facility with a $100 million  senior credit
facility  consisting of $25 million in Term A loans, $50 million in Term B loans
and $25 million in  revolving  loan  commitments.  The  proceeds of the new term
loans were used to finance the Cutex acquisition.  The term loan A and revolving
credit  facility  bear interest at the lower of the  applicable  prime rate plus
0.5% or LIBOR rate plus 2.0% and have a final  maturity date of April 2002.  The
term loan B bears interest at the lower of the  applicable  prime rate plus 1.0%
or  LIBOR  rate  plus  2.5% and has a final  maturity  date of  April  2004.  In
connection with this  refinancing,  the Company  incurred debt issuance costs of
approximately $2.6 million,  including $520 thousand paid to Morningside Capital
Group, L.L.C.

     In the six months ended June 30, 1997, net cash flow used in operations was
$6.8 million largely as a result of a $3.6 million increase in inventory, a $6.6
million  increase in accounts  receivable,  a $1.9 million  decrease in accounts
payable and $1.0 million decrease in accrued  expenses.  These uses of cash were
offset in part by net income of $2.9 million and  depreciation  and amortization
of $1.6 million.

     Net cash used in  investing  activities  for the six months  ended June 30,
1997  totaled  $53.0  million  which  consisted   primarily  of  cash  paid  for
acquisitions  of  business  assets of $49.4  million  and  capital  expenditures
necessary to maintain the Company's facilities in modern condition.

     Net cash provided from  financing  activities for the six months ended June
30, 1997 totaled  $62.1 million  primarily as a result of additional  borrowings
related to acquisitions.  Additionally,  the Company's South African  subsidiary
completed an equity rights offering which generated $1.5 million of cash, net of
$4.2 million which was invested indirectly by the Company.

     Effective February 1, 1997, the Company's South African subsidiary,  Carson
Holdings  Ltd.,  acquired  the assets of Nu-Me in a  transaction  involving  the
issuance of 500,000 shares of Carson Holdings Ltd. stock in a transaction valued
at approximately $767,000. In addition,  Carson Holdings Ltd acquired the assets
of Restore  Plus and Seasilk in cash  transactions  for $112  thousand  and $605
thousand,  respectively. These acquisitions are accounted for under the purchase
method of accounting.

     During March 1997,  the Company  entered into an Asset  Purchase  Agreement
with Conopco, Inc. d/b/a
                                                        12

<PAGE>



Chesebrough-Pond's  USA Co. in order to acquire  the rights to  manufacture  and
market  Cutex in the  United  States  (the  "Cutex  acquisition").  Cutex is the
leading  brand of nail polish  remover and is also a line of nail  enamels.  The
purchase   price   approximated   $41.4  million   including   amounts  paid  to
Chesebrough-Pond's of $37.5 million,  inventory acquired from Chesebrough-Pond's
of $600 thousand and inventory acquired from Jean Phillipe  Fragrances,  Inc. of
$3.3 million.  In addition,  the Company incurred other direct  acquisition fees
and  expenses  of $1.4  million  including  allowances  for  returned  goods and
obsolete inventory.  This acquisition is accounted for under the purchase method
of  accounting.  Funds  were  provided  by  additional  long-term  debt  and the
transaction was completed on April 30, 1997.

     During March 1997, the Company entered into an Asset  Repurchase  Agreement
with Jean  Philippe  Fragrances,  Inc.  Immediately  upon  execution of the Jean
Philippe Repurchase agreement on April 30, 1997, the license agreement with Jean
Philippe Fragrances,  Inc. was terminated.  On April 30, 1997 in connection with
the termination of the license agreement between Conopco, Inc. and Jean Philippe
Fragrances,  Inc. by Carson as  successor in interest to Conopco,  Inc.,  Carson
acquired certain assets of Jean Philippe Fragrances, Inc. used in the packaging,
distributing and selling of nail enamel and nail care treatment  products,  nail
care  implements and lipstick under the trademark Cutex in the United States and
Puerto Rico.

     During April 1997, the Company  completed the  acquisition of the Let's Jam
product line.  This  acquisition  adds one of the leading hair care  maintenance
brands in the ethnic  retail market to the  Company's  portfolio of brands.  The
purchase  price was  approximately  $5.6  million  cash with funds  provided  by
additional  long-term debt. This acquisition is accounted for under the purchase
method of accounting.

     Carson South Africa  consummated a rights offering of additional  shares of
its common  stock to its  existing  shareholders  in June 1997 in order to raise
capital to fund the  physical  expansion of the  Midrand,  South  Africa  plant,
complete the factory in Accra,  Ghana,  accelerate  the  development of recently
acquired  brands and provide  additional  working  capital.  The rights offering
raised  approximately R 25.9 million  (approximately $5.7 million).  The Company
participated in the rights offering by subscribing for additional  shares in the
amount of R 18.7 million  (approximately  $4.2  million),  and will not have its
percentage ownership diluted.

     The Company  believes that cash flow from  operating  activities,  existing
cash balances and  available  borrowings  under its Amended and Restated  Credit
Agreement  will be  sufficient  to fund working  capital  requirements,  capital
expenditures and debt service requirements in the foreseeable future.






                                                        13

<PAGE>




                                                   CARSON, INC.

                                            PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     The Company is party to lawsuits  incidental  to its  business.  Management
believes that the ultimate  resolution of these matters will not have a material
adverse  impact on the business or financial  condition  and  operations  of the
Company.

Item 2.  Changes in Securities

     None

Item 3.  Defaults upon Senior Securities

     None

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

     None.

Item 5.  Other Information

     None

Item 6.  Exhibits and Reports on Form 8-K

(a)    Exhibits --

     18                  Letter re change in accounting principle
     27                  Financial data schedule.


(b)    Reports on Form 8-K --

     On May 15,  1997,  the  Company  filed a  Current  Report on Form 8-K which
included the Asset Purchase Agreement and Manufacturing  Agreement with Conopco,
Inc. d/b/a  Chesebrough-Pond's  USA Co and the Asset  Repurchase  Agreement with
Jean Philippe Fragrances, Inc.

     On  July  14,  1997,  the  Company  filed  and  amended  Form  8-K/A  which
incorporated   the  audited   financial   statements  of  the  Cutex  Brands  of
Chesebrough-Pond's  USA Co. A  subsequent  amendment  was filed on July 16, 1997
which contained a correction of a typographical error included in the Form 8-K/A
filed on July 14, 1997.



                                                        14

<PAGE>



                                                    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, thereunto duly authorized.

CARSON, INC.



                                                         Date: August 14, 1997
Roy Keith
Chairman and Chief Executive Officer



                                                          Date: August 14, 1997
Robert W. Pierce
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)