Struggling toy maker Mattel Inc. said Bryan Stockton had resigned as chief executive and chairman amid disappointing preliminary fourth-quarter results.
The El Segundo company said Monday that Christopher Sinclair, who has served as a board member since 1996, was immediately taking over as chairman and interim CEO.
“The board believes that it is the right time for new leadership to maximize its potential,” Sinclair said in a statement.
Sinclair said Mattel will work to “revitalize” its business and also to find the right leadership in coming months.
The toy company has been struggling to connect with parents and children over the past year. Its classic mainstays such as Barbie and the Fisher-Price line of infant and toddler toys are struggling, resulting in four straight quarters of revenue declines. Last September, Mattel lost its long-held title as the world's biggest toy company to Danish rival Lego.
Analysts said big toy companies such as Mattel and Hasbro have had to work hard to keep up with changing consumer tastes. Parents are spending less money on traditional playthings and shelling out more on gadgets such as smartphones and tablet computers.
“Physical toys are just maintaining a much shorter lifespan than ever before,” said Jason Moser, an analyst at the Motley Fool. “One of the biggest challenges is figuring out how to combat that.”
Stockton acknowledged in an interview in November that the company needed a strategic revamp, but he said he was optimistic about the holiday season.
“This is a challenging business,” he said at the time. "It changes so much, and because of rapid change you can have a season that's not what you would like. What we want to do is try to make sure we don't go through that again."
Some observers noted that Mattel has also been plagued with an excess of structure and bureaucracy that can stifle creativity.
“When you have companies that have been around for a long time, they are sort of used to doing things the old-school way,” Moser said. “The environment can tend to be more micromanaged even when they are trying to make the process better by eliminating meetings.”
Stockton joined Mattel in 2000 as executive vice president of business planning and development and took over as CEO in 2012 after longtime chief executive Robert Eckert stepped down.
Observers have said that Mattel suffers from a lack of innovation in an industry that thrives on churning out the next hot doll or gadget. Going into the holiday season, analysts had predicted that the company may be hampered by a lack of toys with buzz – a big problem at a time when parents are splurging on gifts for their children.
The toy company also suffered a blow when it lost the doll licenses to Disney's hit “Frozen” and princess properties. Rival Hasbro won the licenses starting in 2016.
The company said its preliminary fourth-quarter net income was $149.9 million, or 44 cents a share. Analysts had predicted earnings of 91 cents a share, according to FactSet.