Toys ‘R’ Us continues to narrow loss

Things are looking up for Toys “R” Us.



The nation’s largest specialty toy retailer posted a 20% increase in operating profit and reduced its net loss for the second-quarter amid reduced costs, including the expense of running its now-shuttered Times Square flagship.



In addition, the retailer announced it successfully reached an agreement to refinance all of its 2017 notes and a portion of its 2018 maturities.



For the period ended July 30, Toys “R” Us’ net loss narrowed to $95 million from $99 million in the year-ago period. Operating earnings increased to $18 million in the quarter, up from $15 million last year.



Same-stores sales increased by 0.5%. International grew by 1.2%, driven by strength in the Canada and Asia Pacific markets. Domestic same store sales were flat with improvements in the seasonal and core toy categories, offset by decreases in the entertainment and baby categories. Domestic e-commerce sales were up 15%.



Consolidated net sales totaled $2.28 billion, down $11 million compared to the prior year. The company said the decrease was mainly attributable to domestic store closures, which included the chain’s last FAO Schwarz store and its Times Square flagship.



“We are pleased with our successful refinancing activities which will further strengthen the company's financial foundation. This will enable us to continue to execute on our operational turnaround and compete in what continues to be a challenging retail environment," said Dave Brandon, chairman and CEO, Toys "R" Us. "As we enter the critical holiday season, we are focused on creating a world class shopping experience and ensuring that we consistently deliver the products our customers want, regardless of when and how they want to shop with us."



At the end of the second quarter, the company operated 875 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, 765 international stores and over 245 licensed stores in 37 countries.