TRU
Consumer Products

Toys “R” Us refinances debt amid Q1 earnings rise

TRU will refinance roughly half of its US$850 million in debt, signalling a continued positive direction for the retailer.
June 14, 2016

With estimated first-quarter 2016 earnings expected to rise 13% to the tune of US$79 million, Toys “R” Us has announced plans to refinance roughly half of its US$850 million debt, which is scheduled to mature in 2017 and 2018.

The New Jersey-based retailer will trade up to 89% of its existing notes for newly issued ones that will mature in five years. A third party has also agreed to purchase up to US$50 million of new debt, subject to the success of the exchange offer.

The refinancing agreement has propelled the company to release a preliminary financial report for the period ended April 30, which saw same-store sales grow 0.9% over Q1 2015. Sales for the first quarter are estimated to be US$2.32 billion, essentially flat over last year’s period.

Adjusted EBITDA for the last 12-month period ended April 30 is estimated to be US$809 million, compared to fiscal 2015 adjusted EBITDA of US$800 million.

The initial earnings report, coupled with the refinancing pact, indicate more opportune times for the toy retailer, whose struggles to turn the company around have been well-documented. Despite flat sales in Q3, TRU managed to trim sales and administration costs, which is one of the key goals of its ongoing transformation strategy.

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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