The numbers: Mixed. Mammoth toymaker Mattel posted a quarterly profit of $78.3 million, or $0.21 per share, well below analyst expectations of $0.31 per share. Revenue edged up 1% from a year earlier to $1.17 billion. Mattel's quarter was mired by asset impairment charges; the company has yet to specify the amount of the charges, but they are presumably substantial given the disappointing net income numbers.
The takeaway: Down with Barbie. Up with American Girl. Mattel's slim revenue growth depends increasingly on the success of its American Girl brand, not its longtime sweetheart, Barbie. Barbie sales plunged another 12%, marking the fourth straight quarter drop, while American Girl sales jumped another 14% due to strong US and international growth. As we mentioned last quarter, Mattel hit a homerun with its American Girl dolls despite a weakening toy industry. American Girl now accounts for 40% of Mattel's growth, according to CEO Bryan Stockton.
What's interesting: Doll sales are growing fast, which has helped boost Mattel's American Girl. Doll sales jumped 11% in the US and 4% in Europe in May alone. But unlike with Barbie, Mattel has used American Doll to squeeze everything it can out of the craze, creating entire ecosystem of products that cater to the American Doll. American Doll owners spend an estimated $500 per doll on accessories, including furniture, clothing, movies and magazines. Kids can take their dolls into American doll stores for tea, or dinner, or a haircut (all for a price, of course). Those real-life interactive experiences are proving attractive in an era of child-oriented mobile devices and new technologies. And for the tech-savvy, American Girl is also dominating social media.