(Bloomberg) -- Mattel Inc. shares rose in extended trading after the toymaker reported a smaller-than-expected first-quarter loss, benefiting from fast sales of its Hot Wheels miniature cars and lower costs.

Shares of the El Segundo, California-based company rose as much as 5.3% to $19.74 after the results were announced. Rival Hasbro Inc. reports its financial results on Wednesday before markets open. 

Mattel’s quarterly loss shrank to 5 cents a share, excluding some items, from 24 cents a year ago, according to a statement Tuesday. Analysts had expected a loss of 12 cents, the average of estimates compiled by Bloomberg.

First-quarter revenue was sluggish, falling less than 1% to $809.5 million and coming up short of Wall Street projections. But the Hot Wheels segment registered growth of 5%, nearly countering declines in dolls, toddler toys, games and action figures.

Management is sticking with its forecast for improved profitability in 2024, despite projecting flat sales of $5.44 billion. The company has reduced costs, and stores are clearing previously bloated toy inventories.

“This year is all about profitability,” Chief Executive Officer Ynon Kreiz said in an interview Tuesday. Inventories are down by a third from last year, which helped boost profit margins, he said.

The maker of Barbie dolls and the Uno card game reiterated its forecast for $60 million worth of cost savings in 2024 and higher full-year earnings. The toy industry is grappling with slow sales after frenzied demand during pandemic.

Mattel’s Hot Wheels cars are bucking that trend, with Kreiz expecting 2024 to be the seventh straight year of record sales for the brand. The animated series Hot Wheels Let’s Race, which debuted on Netflix in March, helped boost sales in the first quarter, Kreiz said. 

Kreiz has sought to diversify Mattel’s revenue in recent years by developing films and TV series based on the company’s toy brands. Barbie, released last year, became the most successful movie of 2023 with $1.4 billion at the box office. Mattel is also producing a Hot Wheels picture in partnership with J.J. Abrams and more than a dozen other movies.  

(Updates with shares in second paragraph.)

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