Toys R Us sales dip in Q1

Toys R Us Inc has reported results for its first quarter ended May 2nd, 2009.
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Operating earnings for the period increased to $21 million from $2 million in the same period of 2008. The net loss was $35 million, compared to $36 million year-on-year.

Net sales during the first quarter were $2.477 billion compared to $2.719 billion for fiscal 2008. In both domestic and international segments, comparable store net sales decreased by 5.4 per cent.

Nearly half of the decline was in the entertainment products category, driven by cyclic weakness of the video game business.

The company said its initiatives to reduce overall operating expenses achieved significant success, as SG&A expense for the quarter decreased by 12 per cent or $107 million.

Jerry Storch, chairman and CEO, Toys R Us. “Our first quarter results speak to the strengths of our business strategy and reflect our discipline as an organization in delivering results, protecting margin, and rigorously controlling expenses.

“We remain mindful of the uncertain economic environment and continue to be prudent in managing every aspect of our business. At the same time, we have aggressively pursued opportunities to grow market share and advance our specialist position in the toy and baby products categories.

“Our recent acquisitions of FAO Schwarz, along with,, and, add to our portfolio of family-friendly brands and differentiated product offerings.”

Storch added, “We continue to focus on improving the shopping experience for our customers by introducing exciting new merchandising concepts that deliver on quality, safety, value and convenience.”

Domestic operating earnings for the first quarter were $106 million compared to $102 million in the same period last year. Net sales for the segment $1.623 billion versus $1.711 billion in 2008.

The sales of consumables and traditional toy categories in the US were relatively strong, while video game systems and higher ticket juvenile items were weaker.

Internationally, the operating loss for the quarter was $21 million compared to $38 million in 2008. Net sales for the segment during the first quarter were $854 million versus $1.008 billion for 2008. Foreign currency translation decreased net sales by approximately $104 million.


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