Focused on flawless, Toys “R” Us ready for stretch run

With the financial picture improving modestly at Toys “R” Us, CEO Dave Brandon said the company is ready to build on third quarter successes during the final days of the holiday season.

Total sales at Toys “R” Us were not impressive during the third quarter ended Oct. 31, but some of the weakness can be explained by the strong dollar and unfavorable trends in electronics categories. More noteworthy was the improving profitability picture at a company where new CEO Brandon is experiencing his first Christmas at the helm of the toy retailer and looking to execute a strategy launched in 2014 called “Fit for Growth.”

Since the inception of the strategy, the company has realized expense saving of $248 million and that showed up in third quarter operating results where the company reported a $31 million adjusted profit versus a prior year profit of $3 million. On a reported basis the company said its net loss was $167 million compared to a prior year loss of $213 million.

Sales growth proved challenging, with net sales declining by $128 million to $2.3 billion, but were essentially flat excluding the effect of currency exchange. Total same store sales increased 0.6%, due to 2.9% international comp growth offset by a 0.9% comp decline at U.S. stores.

“Our third quarter results demonstrate the continued progress we are making to position the company for growth,” Brandon said. “As we enter the final ten days of the holiday selling period, we are focused on the flawless execution of our plan to ensure customers have an enjoyable shopping experience and find the hottest toys in-stock, no matter how they choose to shop with us.”

Toys “R” Us operates 865 stores under the banners of Toys“R”Us and Babies“R”Us in the United States, Puerto Rico and Guam, and in more than 750 international stores and over 250 licensed stores in 38 foreign countries and jurisdictions.