Despite Q4 2014 sales declining by 1.8% (US$96 million) to US$5 billion, Toys ‘R’ Us is reporting an overall sales increase of 0.5% (US$61 million) to US$12.4 billion for its full fiscal year.

Q4 domestic sales dipped 4.5% as a result of drops in sales of entertainment, learning and seasonal items, while international sales in the same period were up 2.2% with gains in core toy, learning and seasonal categories.

For fiscal 2014, the international market played a key role in the sales increase, thanks to the addition of new stores and a 1.8% bump in comparable store sales driven by the performance of core toy, seasonal and learning categories. Domestically, the retailer saw its 2014 comparable store sales decline by 1%, largely due to softer sales in entertainment, learning and seasonal categories.

Operating earnings were US$191 million, compared to an operating loss of US$350 million in the prior year, which included a US$378 million goodwill impairment charge. The company’s overall net loss was US$292 million, compared to $1,039 million in the prior year, an improvement of US$747 million.  

The Wayne, New Jersey-based company has identified areas where it can further tighten its belt between US$100 million and US$175 million over the next two years to increase profit margins, according to chairman and CEO Antonio Urcelay.

Going forward, he says Toys ‘R’ Us will focus on “right-sizing” the company’s cost structure and “creating operational efficiencies” across its business worldwide.

Toys ‘R’ Us has more than 1,830 stores in 36 countries/jurisdictions and employs more than  70,000 people worldwide.

In related news, long-time Canadian retail executive Reg McLay was recently hired as SVP of its Babies ‘R’ Us business.