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Mattel Inc. MAT, -2.06% reported a 9% increase in American Girl gross billings in the fourth quarter, “the first quarter of year-over-year growth in four years,” said Mattel Chief Executive Ynon Kreiz on the earnings call, according to a FactSet transcript.
Kreiz said the increase is notable since COVID-19 has caused a number of business disruptions, including permanent closure of some stores and a sharp drop in tourists to American Girl flagship locations.
“These results are a significant achievement, especially in a quarter that represents more than 50% of the brand’s full-year billings, which speaks to the successful progress of the turnaround of this iconic franchise as it continues to gain momentum,” he continued.
See: COVID-19 drove 16% growth in toy sales last year
Overall, the doll category was a strong one for Mattel, with dolls up 13%, and Barbie point-of-sales total up more than 30%.
Kreiz noted in his earnings call remarks that an NPD analysis found the Barbie Dreamhouse the top toy in the U.S. for the quarter and the year.
“We had tagged American Girl inflecting to growth as one of the key catalysts for our Nov’20 upgrade of the stock,” wrote UBS analysts in a note. “Direct to consumer represented an astonishing 75% of sales for the brand.”
UBS rates Mattel shares buy with a $21 price target.
American Girl had been stuck in a rut for years. But a number of analyst groups now say Mattel is poised for gains.
“Positioned for accelerating growth in 2021,” wrote MKM Partners. Analysts rate Mattel stock neutral with a $21 price target.
“Overall, 4Q results provided yet another proof point that Mattel’s multi-year
turnaround remains on track,” wrote Truist Securities in a note. Truist rates Mattel stock hold with a $20 price target.
Also: Disney earnings: Surge in Disney+ subscriptions leads to surprise profit
Hasbro Inc. HAS, -1.78% also reported better-than-expected earnings this week.
“Hasbro’s Q4 results are a solid indicator of where 2021 is heading,” said James Zahn, senior editor of The Toy Insider.
“We knew that gaming and classic play categories and brands experienced record growth last year, but it’s encouraging to hear that brands such as Star Wars and G.I. Joe are on an upswing as consumer trends in entertainment consumption continue to evolve.”
Hasbro stock is down 9.4% over the past year while Mattel shares have jumped 26.6%.
The benchmark S&P 500 index SPX, +0.17% is up 16.6% over the past 12 months.
