American Girl sales grow for the first time in 4 years, a sign Mattel's turnaround is working

Published Wed, Feb 10 20212:33 PM EST

Key Points

The American Girl brand saw a 12% jump in sales during the holiday quarter.
This is the brand's first quarter of year-over-year growth in four years.
Mattel executives attributed this strong growth to its direct-to-consumer business.

Strong holiday sales of key brands like Barbie and Hot Wheels boosted Mattel 's latest results, but it's the 12% bump in fourth-quarter revenue at American Girl that shows the toy company is on the rebound. It was the first time in four years that the doll brand grew quarterly sales. In the fourth quarter of 2019, American Girl sales fell 20%, pulling down the entire doll category, which declined 6% year over year. This year, fourth-quarter sales of dolls rose 13% year over year. The growth was all the more impressive because it came at a time when the brand's flagship stores were seeing fewer shoppers and tourist sales dried up during the pandemic. In the spring when stores were first closed by coronavirus restrictions, Mattel put more emphasis on its e-commerce business and that effort is showing results. "The revamped plan to focus more on [direct-to-consumer] happened prior to the pandemic although Covid helped accelerate the consumer pivot," said Eric Handler, managing director of media and entertainment equity research at MKM Partners. "Ynon and the team deserve credit for not only turning the brand around but many parts of the business which had been lagging." When Ynon Kreiz took the helm in 2018, he was the fourth CEO in four years to take control of the company. At that time, Fisher-Price, Barbie and American Girl were struggling to connect with changing consumer tastes and Mattel was reeling from the recent bankruptcy of Toys R Us. Kreiz, who will celebrate his third year as CEO in April, has had a long-term vision for the toy company that is focused on using its own powerful brands to grow sales. To do this, Kreiz has built a film department within the company to produce more than a dozen features with major Hollywood studios. Already in the works are films featuring Barbie, Hot Wheels, Magic 8 Ball, Major Matt Mason and American Girl. The aim is to create fresh content with connected toy lines to fuel sales. There are no official release dates set for any of these films. But to get there, the company had to first cut cost