Mattel Inc. MAT, + 3.43% reported a 9% increase in American Girl’s gross revenue in the fourth quarter, “the first quarter of year-over-year growth in four years,” Mattel CEO Ynon Kreiz said in the earnings call. according to a FactSet transcript. Kreiz said the increase is also notable as COVID-19 has caused a number of business disruptions, including the permanent closure of some stores and a sharp drop in tourists to American Girl’s flagship locations.
“These results are a significant achievement, especially in a quarter that represents more than 50% of the brand’s annual turnover, 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 strong for Mattel, with dolls up 13% and total Barbie outlets more than 30%. Kreiz noted in his earnings comments that an NPD analysis found Barbie Dreamhouse the best toy in the United States for the quarter and year. “We had labeled American Girl flexing growth as one of the key catalysts for our November 20 stock improvement,” UBS analysts wrote in a note. “Direct to consumer represented a staggering 75% of the brand’s sales.” UBS rates the purchase of Mattel shares with a price target of $ 21. American Girl had been stuck for years. But several groups of analysts now say that Mattel is ready to win. “Positioned to accelerate growth in 2021,” wrote MKM Partners. Analysts rate Mattel’s stock neutral with a price target of $ 21. “Overall, the Q4 results provided another point of proof that Mattel’s multi-year turnaround is still under way,” wrote Truist Securities in a note. Truist rates Mattel’s stock with a price target of $ 20. Plus: Disney Profits: Increased Disney + Subscriptions Leads to Surprise Profits Hasbro Inc. HAS, + 0.92% also reported better than expected earnings this week. “Hasbro’s fourth quarter results are a strong indicator of where 2021 is headed,” said James Zahn, senior editor at The Toy Insider. “We knew classic games and games brands and categories experienced record growth last year, but it‘s encouraging to know that brands like Star Wars and GI Joe are on the rise as consumer trends in entertainment consumption continue to evolve. ”. Shares of Hasbro fell 6.8% over the past year, while shares of Mattel were up 29%. The benchmark S&P 500 SPX index, + 0.47% has risen 16.4% in the last 12 months.