Mattel Inc., the world’s biggest toymaker, agreed Monday to buy American Girl dollmaker Pleasant Co. for $700 million, giving it a new line of dolls to add to its best-selling Barbie.
Mattel, whose toys include Fisher-Price and Hot Wheels, also said second-quarter profits will be less than expected. It’s the second consecutive quarter earnings have been hurt as its biggest customer, Toys “R” Us Inc., pares inventory.
Mattel Chairman Jill Barad hopes that American Girl dolls, which sell for about $80, can help as sales and profits from Barbie falter.
She plans to market the dolls, which sell mostly in the U.S., around the world, along with software, books and dresses.
“It enables Mattel to capture girls for a longer time,” said Merrill Lynch & Co. analyst Hayley Kissel, who rates Mattel near-term “accumulate.” “When they move up past Barbie, this is the next step.”
Mattel shares fell 56 cents, to $38.06, in trading of 1.9 million, more than the three-month daily average of 1.5 million. El Segundo-based Mattel said it expects earnings of about 20 cents a share for the second quarter, less than the 25-cent average estimate of analysts polled by First Call Corp.
