Troubles mount at Toys ‘R’ Us
The third quarter brought no relief to the nation's largest toy store retailer.
Toys "R" Us' loss rose to $624 million for the period ended Oct. 28, up from $160 million in the year-ago period.
Revenue fell 7.5% to $2.1 billion. Total same store sales decreased 4.4%, driven by a 7.0% decline domestically. Same-store sales at international stores rose 0.4%, as a result of growth in Asia.
Toys "R" Us, which filed for bankruptcy in September, released its quarterly metrics amid a report that it is preparing to close 100 or more stores. Chairman and CEO Dave Brandon called the results "disappointing"
"They not only reflect the broad competitive trends across retail, they demonstrate the continued challenges we face in both the baby and learning categories," he stated. "Though we continue to see growth in our core toy category, we recognize the need for change in order to better meet customers' ever evolving shopping preferences."
Toys "R Us" recorded $334 million of net items related to its bankruptcy proceeding during the third quarter. Gross margin dollars fell by $113 million, to $644 million. U.S. profit margins declined, due to fewer vendor allowances as a result of the bankruptcy filing, and an increase in promotions and price cuts.
"The financial restructuring process that we kicked off in mid-September was a critical first step, allowing us to restructure our balance sheet and make the necessary investments in the right initiatives needed to reinvent our business and deliver on our commitment to be 'champions of play' for kids everywhere and a trusted resource and friend for parents around the world," Brandon said. "This process won't happen overnight but I am confident the steps we are taking will meaningfully improve the customer experience."
At the end of the quarter, the company sold merchandise in 881 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in 840 international stores and over 265 licensed stores in 38 countries and jurisdictions.
Toys "R" Us' loss rose to $624 million for the period ended Oct. 28, up from $160 million in the year-ago period.
Revenue fell 7.5% to $2.1 billion. Total same store sales decreased 4.4%, driven by a 7.0% decline domestically. Same-store sales at international stores rose 0.4%, as a result of growth in Asia.
Toys "R" Us, which filed for bankruptcy in September, released its quarterly metrics amid a report that it is preparing to close 100 or more stores. Chairman and CEO Dave Brandon called the results "disappointing"
"They not only reflect the broad competitive trends across retail, they demonstrate the continued challenges we face in both the baby and learning categories," he stated. "Though we continue to see growth in our core toy category, we recognize the need for change in order to better meet customers' ever evolving shopping preferences."
Toys "R Us" recorded $334 million of net items related to its bankruptcy proceeding during the third quarter. Gross margin dollars fell by $113 million, to $644 million. U.S. profit margins declined, due to fewer vendor allowances as a result of the bankruptcy filing, and an increase in promotions and price cuts.
"The financial restructuring process that we kicked off in mid-September was a critical first step, allowing us to restructure our balance sheet and make the necessary investments in the right initiatives needed to reinvent our business and deliver on our commitment to be 'champions of play' for kids everywhere and a trusted resource and friend for parents around the world," Brandon said. "This process won't happen overnight but I am confident the steps we are taking will meaningfully improve the customer experience."
At the end of the quarter, the company sold merchandise in 881 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in 840 international stores and over 265 licensed stores in 38 countries and jurisdictions.