Toys “R” Us narrows losses in Q1

Wayne, N.J. Toys “R” Us Inc., which recently purchased FAO Schwarz, posted a smaller first-quarter loss as expenses declined.

The company said Wednesday it lost $35 million in the quarter, compared with a $36 million loss a year earlier. Sales for the period ended May 2 fell 9% to $2.48 billion from $2.72 billion.

However, operating earnings increased to $21 million from $2 million, the company said.

Same-store sales dropped 5.4% for both the domestic and international divisions. Toys “R” Us blamed the results on softer demand for video games.

Total operating expenses declined to $869 million from $975 million.

Toys “R” Us agreed to buy FAO Schwarz for an undisclosed amount last month. It will operate FAO Schwarz's flagship store in New York City and a second store at Caesars Palace in Las Vegas. FAO Schwarz's Web site and catalog will continue to use the company's name.