The retailer also reported weak international sales, which dropped 1.6 per cent to $1.1 billion.
The retailer says the international decline was due to a 15.6 per cent decline in the entertainment category (which includes video game hardware and software). Excluding the Entertainment category, net sales increased slightly by 0.6 per cent.
Overall, net sales for the quarter, ended October 30th, 2010, were $2.7 billion, an increase of 1.9 per cent year-on-year.
The increase in sales was mainly due to new locations including Toys R Us Express stores, as well as comparable store net sales growth of 2.3 per cent in the US and a foreign currency translation benefit of $17 million.
The increases in revenue were partially offset, however, by a decline of 2.9 per cent in comparable store net sales in the International segment.
In the US, sales increased by 4.5 per cent to $1.6 billion, versus the prior year driven by new locations. Comparable store net sales growth for the quarter was 2.3 per cent.
Toys R Us Express pop-up locations increased by 452 in the US and other countries during the quarter. The company now has a total of 656 locations open worldwide for the holiday season - a large increase form its 91 locations last year.
The company’s nursery integration strategy continued with the conversion or relocation of 57 stores to either side-by-side or R Superstore formats and the opening of four new stores in the quarter.
More than 20 per cent of the company’s stores have now been integrated to offer both toy and nursery products.
Jerry Storch, chairman and CEO, Toys R Us, stated: “We are pleased with the progress we made during the third quarter in positioning the company for the holiday season and for the long term. We made important investments for our future during this quarter, including the opening of new stores and furthering the integration of existing stores around the world to include both toy and juvenile products.
"At the same time, we intensely focused on the implementation of our aggressive holiday strategy. This included the addition of approximately 45,000 seasonal employees to ensure service excellence, the doubling of our U.S. toy store base with more than 600 Toys R Us Express locations, and the ramping up of our inventory of hot and exclusive products.”
Storch added: “Now, as we enter the heart of the holiday shopping season, we remain committed to delivering great value to our customers, providing a differentiated shopping environment with unique merchandise offerings and ensuring we have the hot toys in stock when shoppers want them.”