TRUmarket
Consumer Products

Toys ‘R’ Us sees Q4 sales grow, overall profit decline

New store openings and a growing e-commerce segment helped New Jersey-based toy retailer Toys 'R' Us boost its Q4 revenues by 2% to US$6 billion. Yet despite strong quarterly sales, net income dropped to US$330 million compared to US$387 million in the prior year, the difference being driven completely by increased income taxes in 2010.
March 7, 2011

New store openings and a growing e-commerce segment helped New Jersey-based toy retailer Toys ‘R’ Us boost its Q4 revenues by 2% to US$6 billion.

Earnings before income taxes for the quarter were US$565 million, which was unchanged compared to fiscal 2009. Yet despite strong quarterly sales, net income dropped to US$330 million compared to US$387 million in the prior year, the difference being driven completely by increased income taxes in 2010.

Stateside operations saw revenues of US$3.7 billion for the quarter, a 4.6% increase propelled by new locations including the Toys ‘R’ Us Express stores. The strongest domestic performances came in the Learning and Core Toy categories, which both grew 7.8%, partially offset by a 3.1% decline in the Entertainment category, which encompasses video game hardware and software. Within the International segment, the Entertainment category experienced a 15.5% decline during the quarter.

Full-year results indicate net sales of US$13.9 billion, an increase of 2.2% compared to the prior year, again driven by new locations and Superstore formats as well as a foreign currency translation benefit of US$93 million. However, increased interest expenses largely from debt refinanced in fiscal 2009 contributed to a reduction in yearly profits. The gains were also partially offset by a decline of 3.1% in comparable store net sales in the International segment. Overall, the Core Toy and Juvenile categories were the strongest categories for the year, generating net sales growth of 6.2% and 3.3%, respectively. The Entertainment category was the weakest, declining by 9.6%.

About The Author
Wendy is Kidscreen’s Associate Editor. When she’s not sourcing material for the brand's daily email newsletter, she’s researching, writing and connecting with others about the newest trends in digital media. Contact Wendy at wgoldman@brunico.com.

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