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Toys ‘R’ Us sales shoot up 15.2%, while Q4 net earnings skyrocket 40.1%

It looks like reports of its demise may be greatly exaggerated as net earnings for Wayne, New Jersey-based toy retailer Toys 'R' Us increased by 40.1% in Q4 2006. The company reached US$199 million for the quarter compared to net earnings of US$142 million for the fourth quarter of 2005. Q4 sales at the largest toy chain in the US were also up substantially, increasing 15.8% to US$5.6 billion from US$4.9 billion in Q4 2005.
April 26, 2007

It looks like reports of its demise may be greatly exaggerated as net earnings for Wayne, New Jersey-based toy retailer Toys ‘R’ Us increased by 40.1% in Q4 2006. The company reached US$199 million for the quarter compared to net earnings of US$142 million for the fourth quarter of 2005. Q4 sales at the largest toy chain in the US were also up substantially, increasing 15.8% to US$5.6 billion from US$4.9 billion in Q4 2005. Year-end sales numbers also shot up 15.2% to US$13 billion. Finally, the fiscal year-end numbers show an impressive turnaround, with the company reporting net earnings of US$85 million, compared to a net loss of US$384 million for the previous year.

Chairman and CEO Jerry Storch says he was pleased with the company’s efforts to improve the shopping experience for customers with a better merch selection, service and cleaner, more comfortable stores. Also driving the increase was the consolidation of the company’s Japanese holdings and the opening of 48 new stores in the Babies ‘R’ Us and International divisions. These increases were partially offset by the closure of 85 US domestic stores.

Operating earnings for the fourth quarter of fiscal 2006 rose 53.1% to US$571 million compared to US$373 million for the fourth quarter of fiscal 2005. For the full fiscal year, operating earnings were US$649 million compared to an operating loss for the previous year.

About The Author
Gary Rusak is a freelance writer based in Toronto. He has covered the kids entertainment industry for the last decade with a special interest in licensing, retail and consumer products. You can reach him at garyrusak@gmail.com

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