Mattel’s American Girl brand turns 40, dolls enter a new era
The original six American Girl historical characters — Kirsten Larson, Samantha Parkington, Molly McIntire, Felicity Merriman, Addy Walker and Josefina Montoya — are displayed at the brand’s flagship store,
Luke Fountain
The flagship American Girl Place at Rockefeller Center in New York City feels frozen in time.
The air smells faintly of vanilla. Young girls dart between doll displays clutching miniature shirts and sequined shoes. Beneath glittering chandeliers, the brand’s iconic red boxes line shelves with museum-like precision. Blow dryers hum in the Doll Salon, and downstairs, pink-frosted cupcakes land on cafe tables before dolls sitting upright in their miniature highchairs.
“It feels timeless,” said Jamie Cygielman, global head of dolls for Mattel, the brand’s parent company.
And yet, behind the scenes, the business of American Girl dolls is not what it once was.
As American Girl turns 40, the brand is navigating more modern challenges: digital competition, shifting play patterns and an aging, more cost-conscious customer base.
“The anniversary is at precarious moment for American Girl and the whole doll industry,” said Jaime Katz, an analyst who covers Mattel for Morningstar. “Kids are more digital in play, and the [American Girl] brand has struggled.”
Around a decade ago, at its peak, American Girl was recording more than $600 million in annual sales. By 2023, annual sales had fallen to roughly $200 million — just a third of prior levels.
While American Girl has shrunk back considerably from the mid-2010s, the brand has more recently posted five consecutive quarters of sales growth — one of the few steady performers inside Mattel’s portfolio.
“Growing off a base that’s down more than 60% doesn’t mean the brand is back. It means it’s stabilizing,” Katz told CNBC.
Earlier this month, Mattel reported fourth-quarter sales of $1.77 billion, falling short of Wall Street expectations after holiday demand came in lighter than projected and heavier discounting weighed on margins. Earnings per share likewise fell short, and Mattel issued a lower-than-expect profit forecast for 2026.
Mattel shares have fallen roughly 19% since the Feb. 10 report and are down about 20% over the past year. Citi and JPMorgan downgraded the stock after the results, too.
“People are watching Mattel this year … waiting with baited breath, because they are spending a ton and it seems unlikely they will be bringing in big profits,” Katz said.
A doll gets her hair washed, brushed and curled at the American Girl Salon at the brand’s flagship store in Rockefeller Center.
Luke Fountain
Longstanding issues
Even before the Covid pandemic forced American Girl to reduce its retail footprint from about 15 stores in 2019 to seven U.S. locations today, the brand faced mounting competition from lower-priced alternatives at big-box retailers like Target’s “Our Generation” line.
A traditional, 18-inch American Girl typically starts at $135, excluding accessories, which can cost as much as $250 for a bunk bed or $275 for a beach cruiser.
The premium price once signaled to many parents a mark of quality and prestige, said Laura Tretter, co-host of the American Girl Women podcast. But in an inflation-conscious environment, it’s narrowed the customer base, Katz said.
“Parents are more selective about discretionary spending right now,” Katz said. “That price point [for an American Girl doll] looks steep to many households.”
Across the toy industry, companies, including competitors like Hasbro, are grappling with how to get kids interested in their products, particularly amid uneven consumer spending and, recently, trade uncertainty.
“There are so many more things today that a kid might be enticed by to play with,” Cygielman told CNBC. “There’s also more competition today, and we saw in the past that tariffs can make an impact on the toy market, but we adapt.”
For many kids, play has migrated toward tablets, gaming subscriptions and short-form video.
“The definition of ‘toy’ has changed,” Katz said. “A iPad or Nintendo Switch competes directly with a doll. There are simply more claims on the same discretionary dollar.”
Overall, Mattel’s doll and preschool categories have faced steady declines for the last three quarters, even after the halo effect of 2023’s “Barbie” movie. Global dolls sales fell 7% in the latest quarter, while the infant, toddler and preschool segment declined 17%.
Struggling sales for American Girl and Mattel’s Fisher Price brand motivated activist investor Barington Capital in 2024 to push the company to streamline its portfolio and improve returns, floating the possibility of selling off the brands.
“American Girl is not a huge part of Mattel’s overall financial profile,” Katz said. “Still though, for investors, the question isn’t…
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