Toys R Us sees profit despite sales fall
International business boosts performance
Toys R Us has reported a second quarter profit despite continuing problems in its core US toys business.
The company, which is considering a sale of the toys business and a spin-off of its more successful Babies R Us operation, reported earning of $61m, compared to a loss of $11m in the same quarter a year ago. It was helped by a $200m tax reversal and also saw a better performance in its international stores.
Total sales for the second quarter were $2bn, down 3.9 per cent from $2.1bn for the second quarter of 2003. For the six months to July 31 sales were $4.1bn, down 3.2 per cent from last year.
In the US toy division, same store sales fell by 7.7 per cent in the second quarter, while in the international division, same store sales in local currencies were up 1.7 per cent during the second quarter. Babies R Us saw a 5.8 per cent increase in total sales to $454m, with a 1.8 per cent increase in same store sales
John Eyler, chairman and chief executive officer, said: “Although the US toy stores had a very challenging second quarter, we were pleased with the operating performance of our International business, Toysrus.com, and Babies R Us.”
He added: “Everyone throughout our global toy organisation is focused on maximizing our performance during the holiday season, our peak period for cash generation.
“Our plans for all of our stores are in place, and the steps we are taking to clear selected older inventory will further improve the appearance of our stores and allow us to provide an even better showcase for offering the widest assortment of toys available to our guests in each and every Toys R Us store as well as on Toysrus.com.”
