As American Girl turns 40, Mattel grapples with bringing dolls into a new era

The flagship American Girl Place at Rockefeller Heart in New York Metropolis feels frozen in time.

The air smells faintly of vanilla. Younger ladies dart between doll shows clutching miniature shirts and sequined footwear. Beneath glittering chandeliers, the model’s iconic purple containers line cabinets with museum-like precision. Blow dryers hum within the Doll Salon, and downstairs, pink-frosted cupcakes land on cafe tables earlier than dolls sitting upright of their miniature highchairs.

“It feels timeless,” stated Jamie Cygielman, international head of dolls for Mattel, the model’s dad or mum firm.

And but, behind the scenes, the enterprise of American Girl dolls shouldn’t be what it as soon as was.

As American Girl turns 40, the model is navigating extra fashionable challenges: digital competitors, shifting play patterns and an getting old, extra cost-conscious buyer base.

“The anniversary is at precarious second for American Girl and the entire doll trade,” stated Jaime Katz, an analyst who covers Mattel for Morningstar. “Children are extra digital in play, and the [American Girl] model has struggled.”

Round a decade in the past, at its peak, American Girl was recording greater than $600 million in annual gross sales. By 2023, annual gross sales had fallen to roughly $200 million — simply a third of prior ranges.

Whereas American Girl has shrunk again significantly from the mid-2010s, the model has extra just lately posted 5 consecutive quarters of gross sales progress — one of many few regular performers inside Mattel’s portfolio.

“Rising off a base that is down greater than 60% doesn’t suggest the model is again. It means it is stabilizing,” Katz advised CNBC.

Earlier this month, Mattel reported fourth-quarter gross sales of $1.77 billion, falling in need of Wall Road expectations after vacation demand got here in lighter than projected and heavier discounting weighed on margins. Earnings per share likewise fell brief, and Mattel issued a lower-than-expect revenue forecast for 2026.

Mattel shares have fallen roughly 19% for the reason that Feb. 10 report and are down about 20% over the previous yr. Citi and JPMorgan downgraded the inventory after the outcomes, too.

“Individuals are watching Mattel this yr … ready with baited breath, as a result of they’re spending a ton and it appears unlikely they are going to be bringing in large earnings,” Katz stated.

Even earlier than the Covid pandemic pressured American Girl to cut back its retail footprint from about 15 shops in 2019 to seven U.S. places in the present day, the model confronted mounting competitors from lower-priced options at big-box retailers like Goal’s “Our Era” line.

A conventional, 18-inch American Girl sometimes begins at $135, excluding equipment, which may value as a lot as $250 for a bunk mattress or $275 for a seashore cruiser.

The premium value as soon as signaled to many dad and mom a mark of high quality and status, stated Laura Tretter, co-host of the American Girl Ladies podcast. However in an inflation-conscious atmosphere, it is narrowed the client base, Katz stated.

“Mother and father are extra selective about discretionary spending proper now,” Katz stated. “That value level [for an American Girl doll] appears to be like steep to many households.”

Throughout the toy trade, corporations, together with opponents like Hasbro, are grappling with find out how to get children excited about their merchandise, notably amid uneven client spending and, just lately, commerce uncertainty.

“There are such a lot of extra issues in the present day that a child is likely to be enticed by to play with,” Cygielman advised CNBC. “There’s additionally extra competitors in the present day, and we noticed previously that tariffs could make an influence on the toy market, however we adapt.”

For a lot of children, play has migrated towards tablets, gaming subscriptions and short-form video.

“The definition of ‘toy’ has modified,” Katz stated. “A iPad or Nintendo Change competes immediately with a doll. There are merely extra claims on the identical discretionary greenback.”

General, Mattel’s doll and preschool classes have confronted regular declines for the final three quarters, even after the halo impact of 2023’s “Barbie” film. World dolls gross sales fell 7% within the newest quarter, whereas the toddler, toddler and preschool phase declined 17%.

Struggling gross sales for American Girl and Mattel’s Fisher Value model motivated activist investor Barington Capital in 2024 to push the corporate to streamline its portfolio and enhance returns, floating the potential of promoting off the manufacturers.

“American Girl shouldn’t be a large a part of Mattel’s general monetary profile,” Katz stated. “Nonetheless although, for traders, the query is not whether or not the model is beloved. It is whether or not it is strategically important. It was a drag on earnings.”

Contained in the Rockefeller Heart retailer, these trade headwinds really feel distant.

On a current go to, Lisa Kandoski stood gazing at Molly McIntire — the World Struggle II-era heroine adorned with spherical wire-rimmed glasses, a navy argyle sweater and braids tied in purple ribbons — identical to the doll Kandoski stated her grandmother put below the Christmas tree in 1990.

“It isn’t simply a doll,” Kandoski, now 40, advised CNBC, her eyes misty. “I kind of realized the influence Molly had on me as a child. She taught me that you possibly can be courageous even when the world was scary, that you possibly can ‘do your half’ even once you have been small. She formed who I’m.”

That emotional alchemy has outlined American Girl because it disrupted the doll trade in 1986. On the time, the market was dominated by both style dolls mirroring maturity or child dolls to rehearse motherhood.

The unique six American Girl characters — Samantha, Kirsten, Molly, Felicity, Addy and Josefina — got here with books tackling topics not often taught to younger children like youngster labor or racism, and all dolls handled girlhood itself as a formative stage.

“American Girl stays a ethical compass for many people,” stated Tretter of the American Girl Ladies podcast. “I really like that ladies in the present day are nonetheless getting optimistic messages about inclusivity, friendship and going by troublesome adjustments.”

Over time, American Girl expanded into publishing, movie and vacation spot retail whereas diversifying its characters, like with the 2026 “Girl of the 12 months,” Raquel Reyes, a biracial DJ and animal rescuer who helps run her household’s Kansas Metropolis paleta store.

The model’s whimsical seriousness grew to become a differentiator and fostered generational loyalty, stated Justine Orlovsky-Schnitzler, a folklorist and creator of “An American Girl Anthology: Discovering Ourselves within the Nice Firm Universe.”

Look no additional than the Doll Hospital the place white-coated “docs” triage sufferers, match wheelchairs, carry out eye exams, and apply miniature casts for doll house owners of all ages.

“That is why individuals return,” Orlovsky-Schnitzler stated. “You are not simply shopping for plastic and cloth. You are revisiting a model of your self.”

And despite the fact that the dolls stay preserved in childhood innocence, their authentic house owners, now grown up, preserve returning to American Girl by podcasts, memes, cosplay and fan fiction.

Some go their dolls right down to their youngsters. Others purchase new ones for themselves.

“There’s one thing highly effective about handing your daughter the doll you as soon as slept beside,” Orlovsky-Schnitzler stated. “It is also simply as comforting to return to the times of your youth with your personal doll.”

Mattel is battling to transform that nostalgia into broader gross sales progress.

So‑referred to as “kidult” customers — adults who purchase toys for themselves — have develop into a coveted demographic. By late 2024, spending on toys for adults 18 and older had surpassed that for kids ages 3 to five, in line with market analysis agency Circana. That cohort continued to drive trade progress in 2025.

Mattel has more and more sought to monetize its mental property by publishing, collectibles, leisure and digital platforms. In interviews and on calls with traders, Mattel CEO Ynon Kreiz has stated that cell video games and interactive platforms are notably promising areas.

Nevertheless, “nostalgia should translate into sturdy income and gross sales progress,” Katz stated. Lean too closely into grownup collectors, and a model dangers “getting old alongside its authentic viewers.” Pivot too aggressively towards digital tendencies, and it “dangers diluting what made it distinctive.”

Rivals have been doing the identical. As an example, Lego continues to launch extra brick constructing units aimed toward adults like flowers, artwork and collectables based mostly on millennial popular culture favorites such because the Nineties TV hit “Buddies.”

For American Girl, its fortieth anniversary presents a pure inflection level to strike a stability between child and grownup followers, Cygielman stated.

American Girl is releasing modernized variations of its authentic six characters and publishing its first ebook for adults, centered on Samantha Parkington and set throughout her maturity within the Nineteen Twenties.

On the identical time, the model is working to maintain the following technology engaged by up to date “Girl of the 12 months” storylines and investments in digital platforms, together with YouTube, TikTok and “American Girl World” on Roblox.

“Nostalgia is an entry level, not the endgame,” Cygielman stated. “The query is how we prolong that emotional fairness into new platforms and new audiences.”