Softness in electronics hits Toys ‘R’ Us in Q3

Toys "R" Us Inc.’s sales fell in the third quarter amid weakness in the electronics and entertainment category.



The company reported a loss of $156 million for the October quarter, compared with a loss of $167 million in the year-ago period. The latest period included a net gain of $45 million related to the sale of its FAO Schwarz brand.



Revenue fell 2.3% to $2.28 billion, from $2.33 billion in the year-ago period.



Same-store sales fell 2.1%. Same-store U.S. sales fell 1.9% in the U.S. and dropped 2.5% abroad as decreases in the number of transactions offset increases in average basket size.



Gross margin rose 0.3 percentage point to 36%.



Toys “R” Us noted that it recently refinanced all of its 2017 debt and a significant portion of its 2018 maturities.



"While many of our toy categories performed well, we experienced weak market conditions in the electronics and entertainment category and our baby business had a disappointing quarter," said Dave Brandon, chairman and CEO, Toy “R” Us.



Brandon reaffirmed his commitment to upgrade the Toys “R” Us experience, both online and in store.



"To be a successful specialty retailer, we must bring our stores to life and provide a world-class shopping experience for our customers,” he said. “Our results this quarter are a reminder that we still have a lot of work to do in all aspects of our operations -- both brick-and-mortar stores and our webstore,” he said. “However, our commitment to achieving our growth objectives is stronger than ever.”