Mattel will evaluate its business and move with a "heightened sense of urgency," interim CEO Christopher Sinclair said, as the maker of Barbie dolls posted its fifth straight fall in worldwide quarterly sales.
Shares of the company, which also makes Fisher-Price preschool toys and Hot Wheels toy cars, fell 3 percent in premarket trading.
Mattel appointed Sinclair, a former PepsiCo executive, its chairman and interim CEO on Monday, removing Brian Stockton after worldwide sales fell in the all-important holiday quarter ended Dec. 31.
Mattel has been struggling to arrest the fall in its sales under Stockton's leadership.
Barbie sales have been falling for the past two years as young girls increasingly favor electronic toys, tablets and toys based on popular films.
Stockton was appointed CEO in 2012 and chairman in 2013.
Industry-wide toy sales in the United States rose 4 percent in 2014, according to consumer research firm NPD Group.
Hasbro's sales have been growing as the company's My Little Pony toys, "Hunger Games" inspired Nerf Rebelle bow and arrow toys, and other movie franchise-based toys have found favor with young customers. Hasbro will report its results on Feb. 9.
Jakks is expected to report strong holiday sales, helped by its dolls based on Walt Disney's blockbuster animation movie "Frozen."
Denmark's privately held Lego Group dethroned Mattel as the world's largest toymaker by sales in the first half of last year as the success of "Lego Movie' boosted demand for the Danish company's toys. Lego is yet to report full-year sales.
Worldwide sales of Barbie fell 12 percent in the fourth quarter, while those of Fisher-Price toys declined 11 percent.
Mattel's international sales fell 5 percent, hurt by a strong dollar.
After hitting a six-and-a-half-month low in May, the dollar has surged about 20 percent against a basket of major currencies.
Mattel's net income plunged nearly 60 percent to $149.9 million, or 44 cents per share.
Excluding items, Mattel earned 52 cents per share, lower than the average analyst estimate of 92 cents, according to Thomson Reuters I/B/E/S.
Worldwide sales fell about 6 percent to $1.99 billion.
Mattel's shares were trading at $26.05 before the bell.