Sales for the six months ended February 29th 2012 were £44.25 million, compared to £58.1 million in 2011.
Profit before tax was reported to be £5.57 million for the period, while in the same period of 2011, it was £6.64 million.
The firm said it has a number of "exciting new lines" being released in the autumn selling period.
Richard King, executive chairman, commented: "Around 60 per cent of group sales derive from own-developed and branded products and this has helped Character to maintain its position as one of the UK’s leading toy companies.
"The group’s key brands have generally held up well when compared to the market as a whole, with the first of this season’s introductions Deadly 60 getting off to a flying start at retail.
"We are very proud of and excited by our new product introductions for this calendar year.
"There is no disguising the fact that the retail trade is, with few exceptions, finding it difficult to work its way through the current trading climate.
"Character’s sales for this financial year will be more dependent than ever before on the timing of the order intake from our major customers in July and August. We believe, however, that our sales for the calendar year as a whole will benefit from the exciting new range introductions and, together with the continued solid sales of our existing brands should provide the Group with a very satisfactory result both for this Christmas and the next financial year."