Mattel Inc. replaced Chairman and Chief Executive Officer Bryan Stockton after the toy company’s sales slump extended to five quarters and holiday-season earnings fell far below analysts’ estimates.
Christopher Sinclair, a member of Mattel’s board since 1996, is taking the CEO job on an interim basis, the El Segundo, California-based company said Monday in a statement. Stockton resigned immediately from the board. Sinclair, a former PepsiCo Inc. executive, was previously CEO of Caribiner International Inc. and Quality Food Inc.
Mattel has been struggling with sluggish sales of Barbie and East Aurora-based Fisher-Price products, hurt by kids spending more time playing on electronic devices. In another blow, the company is losing its license for Walt Disney Co.’s Frozen dolls to Hasbro Inc. in 2016.
“It’s sort of shocking, but not surprising,” said Jaime Katz, an analyst at Morningstar Inc. in Chicago. “The performance of the brand has been pretty dire.”
The shares tumbled as much 11 percent to $24.88 on Monday morning before paring their losses. The were trading at $26.72, down 4.7 percent, as of 9:54 a.m. in New York. The stock had dropped 9.4 percent this year through the end of last week.
Mattel was scheduled to report results on Jan. 30, making Stockton’s ouster look like a swift decision by the board, Katz said. Directors were probably getting pressured by investors to make a change and another lackluster quarter sealed Stockton’s fate, she said.
In a preliminary report of results, the company said earnings last quarter amounted to 52 cents, excluding some items. Analysts had projected 91 cents on average, according to data compiled by Bloomberg. Sales fell 6 percent to $1.99 billion in the period.
“Mattel is an exceptional company with a great future, but the board believes that it is the right time for new leadership to maximize its potential,” Sinclair said in the statement. “We will be working during the coming months to revitalize the business and to identify the right leadership for Mattel.”