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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.

Hasbro’s results were in contrast to those of rival Mattel Inc, which on Thursday reported a surprise profit on strong sales of its revamped line of Barbie dolls.

Mattel’s shares rose 20 per cent, while those of Hasbro were down 5 per cent by late morning.

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While every major U.S. toy maker scrambled to find new avenues to sell toys after the sudden liquidation of the world’s largest toy retailer, Hasbro’s reliance on toys based on movie franchises compounded its struggles.

“Hasbro is very reliant on entertainment for success and their Disney licenses – Frozen, Star Wars and Marvel. In nonmovie, nonentertainment years, those brands are not going to sell as well,” said Jackie Breyer, editorial director at trade magazine the Toy Book.

The lack of Disney princess movies last year, for which Hasbro holds key licenses, also drove more preteens to Barbie dolls in the holiday season, allowing Mattel to take market share away from Hasbro in the dolls category.

Barbie added about $134 million to Mattel’s sales in 2018 in the absence of direct competition from Hasbro’s Disney Princess dolls, Jefferies analyst Stephanie Wissink said.

Hasbro’s sales in Europe also took a hit from the bankruptcies of several specialty toy retailers and reduced spending in the United Kingdom ahead of Britain’s impending exit from the European Union.

Lower inventory levels at European retailers was nearly as impactful as Toys “R” Us’ liquidation to Hasbro’s overall business, Chief Financial officer Deborah Thomas said, adding that the toy and games market in Europe was also shrinking.

BETTING ON DISNEY

Hasbro said it expects to return to revenue and profit growth in 2019, banking on a slew of new big budget Disney movie releases including “Captain Marvel,” “Avengers: End Game” and “Star Wars: Episode IX.”

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A sequel to “Frozen” is also expected around Thanksgiving, which Hasbro says will boost sales through 2020, which Breyer says could crimp Barbie sales during the holidays.

The company’s net revenue fell to $1.39 billion in the fourth quarter ended Dec. 30, while analysts were expecting $1.52 billion, according to IBES data from Refinitiv.

Excluding certain items, the company earned $1.33 per share, below the average analyst estimate of $1.67 per share.

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