As China's economic growth declines, some analysts say Beijing may have to spend more on infrastructure, adding to concerns about high debts.China Economyread more
U.S. President Donald Trump said Tuesday that Washington and Beijing have a long way to go on trade, adding that America could place tariffs on an additional $325 billion...Asia Marketsread more
"The charts, as interpreted by Carley Garner, suggest that the upside in the stock market has gotten more limited," Jim Cramer says.Mad Money with Jim Cramerread more
John Paul Stevens, who served on the Supreme Court for nearly 35 years and became its leading liberal, has died.Politicsread more
The largest U.S. banks are scrutinizing members of the Federal Reserve for any insight into how the central bank will tinker interest rates.Banksread more
The U.S. and China restarted their trade talks, but signs are showing a comprehensive deal could be a long way off, if it happens at all.Marketsread more
The WTO ruling recognized that the United States had proved that China used state-owned enterprises to subsidize and distort its economy. But the U.S. must accept Chinese...World Economyread more
Facebook's cryptocurrency project has already been met with skepticism from policymakers around the world.Technologyread more
Stone, 66, a notorious Republican political operative who has described himself as a "dirty trickster," had previously been dressed down by the judge for his public remarks...Politicsread more
Delta is gathering more data from customers than ever in hopes of avoiding customer service problems and increasing customer satisfaction, its CFO says.At Workread more
The Biden team's second-quarter Federal Election Commission filing shows that the campaign wrote a check of just over $5,300 on June 28 to Sheehan Associates for "strategic...2020 Electionsread more
On Friday shares of Mattel continued to soar after a strong earnings beat on Thursday, while shares of rival Hasbro sank, the result of a poor earnings showing before the bell. But there is more going on than these stock moves show.
It was clear heading into the holiday season that the toy industry was going to take a hit. The bankruptcy and subsequent closure of Toys R Us meant Hasbro, Mattel and other toymakers had far fewer shelves on which to place their inventory than in years prior.
While a number of retailers, including Target, Walmart and even drugstores, expanded their toy sections this past holiday season, it wasn't enough to offset the hole left by Toys R Us' departure from the market.
Industry-wide sales of toys fell 2 percent in 2018, according to market researcher NPD Group.
Investors rallied behind Mattel on Thursday after the company exceeded analyst expectations during the fourth quarter. Shares spiked as much as 27 percent on Friday before retreating slightly. The stock is down nearly 6 percent over the past year, putting its market value at $4.3 billion. Analysts expressed renewed confidence in the company, which has been in the midst of a multiyear turnaround.
"Mattel's Q4 results were materially better relative to expectations, in our opinion, and hence we came away from this update incrementally more upbeat on business fundamentals," Drew Crum, analyst at Stifel, wrote in a research note Thursday.
Investors and analysts were less confident about Hasbro, however. The company posted weaker-than-expected profits and continued to blame Toys R Us for its sales woes.
"We are surprised with the severity of the miss, but take some solace that retail inventory levels have significantly declined, which should allow Hasbro to start 2019 with a relatively clean channel and a more efficient cost structure," Eric Handler, analyst at MKM Partners, wrote in a research note Friday.
Hasbro shares were down 4.9 percent Friday after falling as much as 10 percent before the opening bell. Hasbro's stock is down nearly 11 percent over the past year, bringing its market value to $11.4 billion.
"If you took the logo off the top, Hasbro's earnings read like a company that was restructuring and Mattel read like a growth company," said Gerrick Johnson, analyst at BMO Capital Markets.
While Mattel has won this round, in terms of gaining favor with investors, it didn't escape the fourth quarter completely unscathed from the loss of Toys R Us. The company's revenue fell 5.4 percent to $1.52 billion. It did outpace analysts' estimates of $1.44 billion, according to Refinitiv.
The company said Toys R Us' liquidation had a negative 8 percent impact on sales during the fourth quarter.
Sales of Barbie and Hot Wheels excelled during the quarter, but American Girl doll sales continued to slump and Fisher-Price and Thomas the Tank Engine toys, which were sold in Babies R Us locations, also fell significantly.
For Hasbro, Toys R Us had a bigger impact. Revenue fell 13 percent to $1.39 billion in the quarter from $1.6 billion a year earlier. Analysts had forecast revenue of $1.52 billion.
Hasbro brands such as Nerf and My Little Pony relied heavily on shelf space in Toys R Us and the company was unable to recapture those lost sales from other retail sites.
"For Hasbro, in addition to losing hundreds of millions of dollars of revenue from Toys R Us, the liquidation of an additional hundreds of millions of dollars of their retail inventory sold into the market at large discounts was more impactful to 2018 than we and industry experts estimated," Hasbro CEO Brian Goldner said during an earnings conference call Friday.
Before its bankruptcy filing, Toys R Us was Hasbro's third-largest customer in the U.S. and its second-largest customer in Europe and Asia, Goldner said.
"It looks like Mattel sort of held share and that Hasbro lost share," said Jaime Katz, analyst at Morningstar.
Under CEO Ynon Kreiz, Mattel has embraced a two-step strategy. To start, Kreiz has worked to cut $650 million in costs, a combination of laying off 2,200 workers and shuttering its New York office.
"Exiting 2018, we achieved $521 million of run rate cost savings. We now expect to exceed our overall cost savings target of $650 million exiting 2019," Kreiz said on an earnings call Thursday.
Kreiz has also hoped to revive sales by creating a film department to bring its iconic toy properties to the big screen. In January, the company announced it had tapped Margot Robbie ( "Suicide Squad," "I, Tonya") to play Barbie and revealed it would produce a live-action Hot Wheels film.
Analysts expect these films will hit theaters in 2020 or 2021 and sales of tie-in toys will help boost Mattel sales. Kreiz declined to give more information about how the company plans to revitalize the American Girl and Fisher-Price brands, but promised more clarity ahead of New York Toy Fair next week.
For Hasbro, 2019 is a big year for toys based on films. The company will sell products from movies such as "Star Wars: Episode IX," "Captain Marvel," "Avengers: Endgame" and "Frozen 2" throughout the year. In the past, "Star Wars" toys alone have brought in more than $500 million in sales during the quarter in which they were sold.
"We're also seeing the opening of a new theme park land of Galaxy's Edge, which is both in Anaheim and in Orlando, and we get to the end of the movie 'Star Wars: Episode IX,' which debuts in theaters in December, and that impact from the film and all of our efforts will reach across both 2019 and 2020," Goldner said. "So we're really excited about a full-year effort."