In the aftermath of Toys “R” Us filing for bankruptcy protection in September, Mattel has reported a decline in gross sales during its third quarter of 2017. According to CEO Margo Georgiadis, the “disappointing” results were due in large part to the negative impact of the Toys “R” Us filing, tighter retail inventory management and underperforming brands. Fellow toymakers Hasbro and Jakks Pacific also reported that TRU’s troubles have had a negative impact on their quarterly revenues.

Mattel’s worldwide net sales declined by 13% to US$1.56 billion in Q3, while worldwide gross sales also fell by 13% to US$1.71 billion. In North America, meanwhile, net sales were down by 22% (US$885.8 million compared to US$1.13 billion in Q3 2016) and gross sales in the region decreased by 22% to US$933.2 million.

Following these results, the company announced its quarterly dividend will be suspended beginning in Q1 2018 in an effort to increase financial flexibility, strengthen the balance sheet and facilitate strategic investments. The suspension of the quarterly dividend–previously US$0.15 per share–is expected to result in US$50 million per quarter in additional liquidity.

Worldwide gross sales for Mattel’s Girls & Boys Brands declined by 9% to US$967 million compared to the same period in 2016. In North America, Mattel reported gross sales of US$459.6 million for Girls & Boys Brands (down 20%).

Worldwide gross sales for Barbie were down by 6% to US$329.6 million due to a shift in DVD entertainment strategies. Worldwide gross sales for Other Girls Brands, meanwhile, dropped by 40% (from US$161.6 million in Q3 2016 to US$96.3 million) driven by declines in Monster High and DC Super Hero Girls.

The Wheels category also saw a drop (worldwide gross sales were down 4% to US$270.3 million) caused by weakness in the Tyco RC vehicles. Entertainment, however, saw worldwide gross sales increase by 1% to US$270.8 million, with strong Cars sales offset by declines in Minecraft and WWE Wrestling licensed products.

Worldwide gross sales for Fisher-Price–which includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels brands–were down by 15% in Q3 2017 to US$561.6 million. The declines were primarily driven by soft demand for Thomas & Friends, as well as infant products. In North America, Fisher-Price gross sales fell by 21% to US$321.9 million.

American Girl, meanwhile, saw worldwide gross sales drop by 30% to US$88 million. Mattel attributed the decrease to lower licensing income and initial sales in 2016 through external distribution channels. North American gross sales also dropped (down 29% to US$88 million).

Q3 2017 saw worldwide gross sales for the Construction and Arts & Crafts category fall by 29% to US$84.6 million, due to softening demand for Mega Bloks and preschool products. The category also saw a 34% drop in North American gross sales (US$54.7 million compared to US$82.9 million in Q3 2016).

Mattel also saw weaknesses across its Barbie, Fisher-Price and American Girl brands in both Q1 and Q2.

Despite these declines, however, Mattel reports it has made strong progress in terms of its transformation plan. Earlier this year, the toymaker unveiled a five-pillar strategic plan that will see it make major strides in creating digital content, internet-connected toys and products that promote learning. The plan sees Mattel focus on building its Power Brands–which include Barbie, Fisher-Price and American Girl–into 360-degree connected systems of play and experience. To accelerate progress under the transformation plan, Mattel announced it will simplify its business and right-size cost structure with plans to eliminate at least US$650 million in net costs over the next two years.

Internationally, net sales in Europe showed little change compared to Q3 2016 (up 0% to US$355 million), while gross sales declined 1% to US$414.4 million. Net sales in Latin America were up 4% to US$193.9 million for the quarter while gross sales in the region grew 2% to US$216.7 million. And in Asia Pacific, net sales increased 1% to US$126.3 million while gross sales grew 2% to US$145.9 million.

The growth in Asia follow Mattel’s recent initiative to swing further into China with Babytree child-focused learning centers. The company also previously entered a joint venture with Shanghai-based investment company Fosun Group to introduce learning and play clubs for children across China.