No gifts for Toys 'R' Us this holiday
Santa did not bring any gifts this past holiday season for Toys "R" Us, as the toy retailer reported a drop in same store sales.
Toys “R” Us said same store sales in the United States fell 5%. The company said gross margins, however, improved, especially in the U.S., after the company was more "disciplined" in its promotional offers and more "rational" in its pricing strategy.
Antonio Urcelay, chairman of the board of directors and CEO at Toys “R” Us Inc., said: “I am pleased with our year-to-date performance and the actions we have taken to strengthen and transform the company. These results reflect the successful execution of our strategic plan to rationalize promotions, slow sales decline, and improve margin for fiscal 2014. I am proud of the team’s hard work and high level of focus on our key initiatives so far this year and throughout the competitive holiday season.”
Overseas, holiday sales rose 1.2%, with margins staying flat compared to the year-earlier level.
In the third quarter ended Nov. 1, the company reported that net sales declined 1.3% to $2.5 billion, but excluding the effects of foreign currency translation sales increased 0.4%. A domestic same store sales decrease of 1% was offset by an international comp increase of 1%.
The company recently refinanced $1.4 billion of near-term debt maturities, $1 billion of which matured in 2016. As a result, the company has no significant debt coming due until 2017. The company ended the quarter with $1.4 billion of liquidity, consisting of $406 million in cash and equivalents and another $1 billion of unused availability under lines of credit.
Toys “R” Us operates 893 stores in the U.S. and nearly 1,000 international stores and licensed locations internationally.