News From Toyland: Not So Bad

Toys “R” Us (Paramus, N.J.), fresh from the glow of opening its new flagship store in New York's Times Square, has announced what passes for good news these days: Its third quarter loss narrowed to $44 million, despite the company's significant investment in store renovations. The retailer's pre-holiday store remodeling program went beyond its target expectations.

A month ago, the world's second-largest toy seller (behind Wal-Mart Stores) warned of lower quarterly profits due to weakening sales.

For the three months ended Nov. 3, 2001, Toys R Us, reported a sales decline (excluding revenues from its Japanese division) of 2 percent. U.S. same-store sales were down 9 percent, about a third of which the company attributed directly to the September 11 events. Same-store sales in the international division gained 7 percent for the quarter.

The company's Babies R Us business posted a 1 percent same-store sales gain for the third quarter, on top of a double-digit increase last year, and increased operating earnings by 19 percent. The Kids R Us business reported a 2 percent same-store sales decline.

Toys “R” Us chairman and ceo John Eyler said the company was “well-positioned to deliver positive results in the fourth quarter.”

The company said it renovated 433 stores, or more than 60 percent of its 703 U.S. outlets, topping a target of 415 it had planned to remodel in time for the holiday season.