Shares of the Pawtucket, Rhode Island-based Hasbro have dipped nearly double digits in pre-market after a big miss on earnings while the El Segundo, California-headquartered Mattel are set to open at their highest level since November after crushing estimates.
One of the key differentiators between the two disparate results was who was best able to adapt sans Geoffrey the Giraffe.
"2018 was a very disruptive year, driven by the bankruptcy and liquidation of Toys R Us across most of the world and a rapidly shifting consumer and retail landscape," Hasbro CEO Brian Goldner explained.
He noted that while the company worked to diversify its retail base, it was not able to generate the same sales without this key partner.
"We were not, however, able to recapture as much of the Toys R Us business during the holiday period as we anticipated as the effect of its liquidated inventory in the market was more impactful than we and industry experts expected," Goldner added.
He attempted to assuage concern over the result in the typically profitable fourth quarter by noting that it is a "finite" and "unprecedented" event and should be moved past.
However, it is a curious explanation given its chief rival was able to easily mitigate the impact in the fourth quarter through strong performance in key products even if they were found on Walmart (WMT) , Target (TGT) , or Kohl's (KSS) shelves.
Upon the news of Toys R Us' final capitulation in 2018, both toy manufacturers laid off thousands of workers to deal with the impact of lost shelf space from the over 700 Toys R Us location closures. Through that lens, both were unquestionably hurt by the debt-driven destruction of the toy-seller.
Mattel announced that it would cut an astonishing 22% of its workforce on the news in July, for example.
Yet, as the dust has settled it becomes clear that product is king as Mattel's major offerings hold the consumer attention regardless of retailer.
"In terms of brand highlights, 2018 was a great year for Barbie, which sustained growth and continued momentum globally. Barbie worldwide gross sales were up 15% both for the quarter and the full year in constant currency," CEO Ynon Kreiz told investors on the conference call late Thursday. "Barbie was the number one global fashion doll property in 2018 according to NPD. We look forward to celebrating her 60th anniversary throughout 2019 with a number of exciting product launches and events."
The strength of Barbie should only continue after the company brings her to the silver screen with a Warner Brothers produced live action movie starring Margot Robbie.
In another analogue, the lack of silver screen exposure was a definitive drawback for Hasbro.
The brand's reliance on film franchises like Star Wars, Frozen, and Marvel merchandise were left without a release in the fourth quarter, drawing attention again to the brands contingent nature.
To be sure, that could be a catalyst in 2019 as Disney (DIS) has lined up new releases for all three franchises later this year.
To further assuage concerns, Hasbro CFO Deborah Thomas announced an increase in the quarterly dividend to a hefty 8%.
At least in pre-market, the shadow of Geoffrey the Giraffe appears to be looming larger than that hope as the stock sustains its post earnings slump.