Mattel's shares rose 20 percent, while those of Hasbro were down 5 percent by late morning.
The company's net revenue fell to $1.39 billion in the fourth quarter ended December 30, while analysts were expecting $1.52 billion, according to IBES data from Refinitiv.
Barbie ended the year with its highest gross sales in five years, Mattel said, highlighting the company's success in diversifying the traditionally blonde doll by giving it different skin tones and dressing it in attires ranging from hijabs to space suits. For North America, Q4 net sales fell 6% to US$708 million versus a year ago, driven primarily by Toys "R" Us liquidations.
Overall the lower revenues for this quarter reflect lost Toys "R" Us revenues throughout 2018 in the United States, Europe and Asia Pacific, as well as a more meaningful impact than expected from the liquidation of the retailer's inventory into these markets. Worldwide net sales, meanwhile, rose 2% to US$658 million, largely due to a slowdown in Mattel's China business. Meanwhile, Hot Wheels' gross sales for the quarter increased by 9% and 12% in constant currency, compared to the year before.
"2018 was a very disruptive year, driven by the bankruptcy and liquidation of Toys "R" USA across most of the world and a rapidly shifting consumer and retail landscape", said Brian Goldner, Hasbro's CEO in a statement. The gains were partially offset by sales for Fisher-Price and Thomas & Friends, which dropped 17% to US$352 million.
"Restoring profitability for the company this year has been the core focus", chief executive Ynon Kreiz told Reuters, adding that he expects Mattel to exceed its cost-saving target.
Hasbro Inc missed estimates for quarterly profit on Friday as the toy maker struggled with the collapse of Toys "R" Us and falling European demand, in a year without a major Disney princess or a Star Wars film to bolster sales. Among all the achievements in 2018, I would like to applaud our team for regaining the number one toy company position globally in a year full of challenges and headwinds. "This is a great moment to celebrate, before we go back and continue the hard work of implementing our multi-year turnaround".