Mattel Inc.’s (MAT - Analyst Report) doll brand American Girl is all set to enter Canada through a partnership with Canada’s largest book, gift, and specialty retailer Indigo Books & Music Inc. Starting spring 2014, this Toronto-based retailer will showcase American Girl branded products in its Yorkdale Shopping Centre, Toronto, and Robson Street, Vancouver.
Mattel's Girls portfolio represents some best-selling doll brands in the world such as Barbie, American Girl, Monster High, and Disney Princess. Among these, the American Girl brand includes My American Girl, the historical collection, and Bitty Baby. American Girl products are sold directly through its catalog, proprietary retail stores and website whereas its children’s publication is sold to specific retailers.
American Girl has been offering age-appropriate dolls, experiences and books for almost 30 years. This product line has contributed substantially to Mattel’s revenues over the years. In its recently-concluded third quarter, American Girl Brands leaped 20% to $122.3 million, of which Historical Character products contributed 6%, 4% was due to higher sales of the 2013 Girl of the Year, Saige, while higher sales of My American Girl products contributed 3%.
We believe that the foray of this brand into the Canadian market will be an added benefit for Mattel in the upcoming quarters. Notably, Mattel’s international business is expanding at a rapid pace especially in Latin America, Eastern Europe and Asia. Mattel has witnessed positive revenue growth internationally in some of the recent quarters.
However, while Mattel normally takes the spotlight when it comes to girls’ toys, another toy company Hasbro Inc. (HAS - Analyst Report) , known for its boys’ products is also gaining traction in its girls’ brand. In Hasbro’s recently concluded third quarter, the Girls category surged 29.0% thanks to products such as The Furby and My Little Pony.
Mattel currently carries a Zacks Rank #2 (Buy).