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(Reuters) - Chubby-faced American Girl dolls and the "descendants" of Dracula and Frankenstein's monster are helping Mattel Inc (MAT.O) boost sales to pre-teen girls as its iconic Barbie franchise shows signs of aging.
The No.1 toymaker reported that sales of American Girl dolls and accessories rose by a third to just over $100 million in the first quarter, helping it turn in stronger-than-expected earnings and boosting its shares to near a 15-year high.
Overall sales rose 7 percent, also beating market expectations. Mattel said on Wednesday that sales were also driven by demand for "Monster High," dolls depicting the "descendants" of famous horror story characters.
In contrast to soaring sales of American Girl products, sales of Mattel's flagship Barbie dolls were essentially flat in the quarter, after taking currency fluctuations into account.
"The American Girl segment provided the biggest surprise of the quarter," MKM partners analyst Eric Handler said in research note. Handler had expected the American Girl business -- which contributed 10 percent of total revenue -- to show revenue growth of 6 percent instead of the 32 percent Mattel reported.
The American Girl line was introduced in 1986 by a company bought by Mattel in 1998.
Mattel, also known for its Hot Wheels toys, also managed to raise prices globally and cut costs by starting to make products for local consumption in countries such as Brazil and India.
Local production helps the company get its products to stores more quickly and cuts down on import duties and shipping costs.
Mattel said selling, general and administrative (SG&A) costs as a percentage of net sales fell by 30 basis points to 37.1 percent in the first quarter.
For the full year, however, the company forecast SG&A spending to be higher than last year. Expenses for the year include investments in new franchises, emerging markets and additional American Girl stores.
The company also expects higher employee and benefit costs in the year, Chief Financial Officer Kevin Farr said on a post-earnings call with analysts.
Farr said he expects gross margins in the low-to-mid 50 percent range for the full year. Mattel reported first-quarter gross margins of 54.2 percent.
Net income rose to $38.5 million, or 11 cents per share, in the first quarter from $7.8 million, or 2 cents per share, a year earlier. Analysts on average were expecting a profit of 9 cents per share, according to Thomson Reuters I/B/E/S.
Smaller rival Hasbro Inc (HAS.O) is due to report quarterly results next week.
The first quarter is typically the least significant of the year in terms of sales for toy companies. They make more than a third of their annual revenue in the fourth quarter, which includes the all-important holiday selling season.
"This was another solid quarter for the company, albeit seasonally not important," said Stifel analyst Drew Crum, who maintained a "hold" rating on Mattel shares, citing valuation.
Mattel's sales rose 7 percent to $995.6 million, beating the average analyst estimate of $986.5 million.
Sales of Fisher-Price toys fell 7 percent.
Analysts such as Sean McGowan with Needham have tied some of the weakness in the Barbie brand to the rising popularity of other Mattel dolls, such as Monster High, which appeared on many hot toy lists in 2012.
Mattel shares were up 2.4 percent at $44.04 on the Nasdaq on Wednesday afternoon.
Additional reporting by Siddharth Cavale in Bangalore; Editing by Lisa Von Ahn, David Goodman and Ted Kerr