It’s a pair of classic brands that are carrying Mattel. Hot Wheels and Barbie saw fourth quarter gains as the toymaker pulled through a challenging year that saw losses due to the collapse of Toys “R” Us in the U.S. and lackluster sales from other brands and divisions in the company. Mattel, which quietly went through another round of internal reorganization and staffing cuts last week, saw an after-hours stock rally after the late afternoon reveal of fourth quarter and full year numbers for 2018. The fourth quarter saw a surprise profit of $14.9 million ($0.04 per share) vs. a loss of $281 million (-$0.82 per share) in the fourth quarter of 2017. Full year net sales were $4.51 billion last year vs $4.88 billion in 2017; fourth quarter net sales were $1.52 billion vs $1.61 billion in 2017.

“Our fourth quarter results demonstrate meaningful progress in executing our strategy and significant improvement over last year,” says Ynon Kreiz, chairman and CEO. “We remain focused on advancing our strategy to restore profitability and regain top-line growth in the short-to-mid-term and are laying the groundwork to capture the full value of our IP in the mid-to-long-term. After three consecutive quarters of solid, disciplined execution, we are well on our way to becoming an IP-driven, high-performing toy company and creating long-term value for our shareholders. Among all the achievements in 2018, I would like to applaud our team for regaining the #1 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.”

For the year, both net and gross sales were down 8 percent. The company notes that this reflects a negative 6 percent impact from Toys “R” Us and another negative 2 percent impact from a slowdown in Chinese business. Gross margin improved across the board.

Sales for Mattel’s “power brands,” which include owned IP were down 3 percent for the year. Gross sales for Hot Wheels were up 7 percent for the year, 9 percent for the quarter. Barbie was up 14 percent for the year, 12 percent for the quarter. Gains in these two categories offset big declines for Fisher-Price and Thomas & Friends (down 13 percent for the year) and American Girl (down 28 percent for the year).

Barbie continues to do strong sales as the brand heads into its 60th year, as does Hot Wheels, driven in large part by the brand’s 50th Anniversary last year.

Sales across Mattel’s “toy box” mix of owned and licensed partner brands was less than stellar, down 16 percent for the year, 21 percent for the quarter. Owned brands, including construction products from MEGA Construx and MEGA Bloks were down 10 percent. Partner brands were down 23 percent for the year, 25 percent for the quarter. The company notes that lower-than-expected sales from products such as Disney•Pixar Cars was offset by initial sales of licensed product from Universal’s Jurassic World franchise.

Looking ahead to Toy Fair New York, this should be a year of change for Mattel as they move to better position themselves into the entertainment realm, much like Hasbro. Recent moves include the hiring of former Disney Channel exec Adam Bonnett to lead Mattel Television, while the newly-minted Mattel Films division has Hot Wheels and Barbie films in-development with Warner Bros. Pictures. New partnerships including Barbie x National Geographic, a collaboration with Korean pop stars BTS, and a foray into the live event space with Hot Wheels Monster Trucks Live should keep core brands moving.