Shares of Mattel (MAT - Get Report) were indicated higher on Friday after the struggling toymaker posted a narrower second-quarter loss amid higher sales and reduced costs, particularly from last year's closure of Toys 'R' Us stores which didn't affect operations in the latest period.

The El Segundo, Calif.-based company posted a net loss of $108 million, or 31 cents a share, vs. a loss of $241 million, or 70 cents a share, in the year-earlier quarter.

On an adjusted basis, the company lost 25 cents a share, vs. the loss of 40 cents expected by analysts polled by FactSet.

Sales came in at $860.1 million, a 2% increase from the year-ago quarter and higher than the $813 million expected by FactSet analysts.

"This quarter further demonstrates the continued momentum of our multi-year turnaround strategy," CEO Ynon Kreiz said in a statement.

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Mattel makes the famed Barbie doll along with Fisher-Price toys, Hot Wheels and the American Girl dolls. MGA's toy brands include LOL Surprise, Little Tikes and the Bratz dolls.

The company had been in merger discussions with California toy mogul and LOL doll creator Isaac Larian, though the talks ended last month after Mattel rejected a second merger offer with Larian's privately held MGA Entertainment.

Shares of Mattel were up 5.84% at $13.24 in early trading on the New York Stock Exchange.