Toys 'R Us (Paramus, N.J.), the nation's second-largest toy retailer, reported that strong holiday sales allowed it to mitigate an overall fourth-quarter sales slump and post a 6.8 percent earnings rise for the period ending Feb. 3, 2001.
The company's fourth-quarter sales fell nearly 5 percent from a year ago. But its same-store sales jumped 3.5 percent for the nine-week holiday sales period ended Dec. 30, 2000.
“Given the ongoing highly promotional conditions retailers are facing in the marketplace,” said president and ceo John Eyler, “we are particularly pleased with our performance in 2000. It demonstrates our customers'increasing recognition of Toys “R” Us'ability to meet their needs.” As a result of the better-than-anticipated results, Eyler indicated confidence in the company's plans for store-remodeling. An additional 250 stores are scheduled to be converted to the refined C-3 format this year. Going into the 2001 holiday selling season, the company expects that approximately 415 of its stores, or almost 60 percent of the U.S.A. toy division, will be operating in the refined format. The conversions are targeted towards the larger markets. Eyler acknowledged that the company expects to incur significant costs to enhance some of its stores, as well as train employees and strengthen its alliance with Amazon.com. But he expressed confidence that the reinvestment will deliver benefits. “I am even more excited now about Toys “R” Us'future growth prospects than when I joined the company just over a year ago,” he said.
Toys “R” Us was the nation's largest toy seller for several years, but has lost that spot to Wal-Mart. The company operates 1586 stores, including 710 U.S. and 492 international toy stores, 198 Kids “R” Us clothing stores, 148 Babies “R” Us stores and 38 Imaginarium stores selling educational toys. The Babies “R” Us division – selling infant/toddler apparel, furniture, and feeding supplies – had another strong year with double-digit comparable store sales increases. Operating earnings more than doubled in the 2000 fourth quarter and increased 59 percent for the full year. As a result, the company expects to open approximately 20 new Babies “R” Us stores in 2001. It had opened 16 new stores in fiscal 2000.
It was also announced that Eyler will assume the added title of chairman at the company's annual shareholders'meeting. Michael Goldstein, current chairman, will remain a director of the company and a director of the Toys “R” Us Children's Fund.