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Toys ‘R Us shrinks Q3 net loss with lower taxes, interest


Wayne, N.J. – Toys ‘R Us Inc. shrunk its net loss to $213 million in the third quarter of fiscal 2014 from $605 million in the year ago, helped by expense controls and a less intense promotional enviroment. The retailer, however, did not provide an outlook for its holiday performance.

Sales dipped 1.3% to $2.46 billion from $2.49 billion, due to the impact of foreign currency translation (excluding the effects of foreign currency translation, sales increased 0.4%. ). Domestic same-store sales fell 1%, primarily driven by declines in the entertainment, learning and baby product categories, partially offset by improvement in the core toy category.

“Our more disciplined approach to promotional offerings resulted in a 180 basis point gross margin improvement in our U.S. business, while at the same time providing fair pricing to our customers,” said Antonio Urcelay, CEO and chairman of the board of directors. “Through our highly-focused, efficient execution, we reduced SG&A costs for the quarter, and there are significant efforts underway to continue to improve our cost structure.”

Through refinancing, Toys ‘R Us says it has eliminated any significant debt from coming due until 2017. Looking ahead to the holiday season, the retailer said improvements made during the first three quarters of the year have positioned it to deliver an improved shopping experience, both in-store and online, but offered no specific details or projections.

Toys “R” Us operates 893 stores in the U.S. and nearly 1,000 international stores and licensed locations internationally.
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