TRU cuts more costs in Q3, sales flat

Toy retail giant Toys"R"Us followed up its encouraging Q2 with 11% in sales and admin cost-cutting measures to boost EDITBA by US$31 million.
December 16, 2015

Fort Wayne, New Jersey-based toy retailer Toys”R”Us followed up its encouraging Q2 with 11% in sales and admin cost-cutting measures to boost EDITBA by US$31 million.

Overall net sales of US$2.331 million were relatively flat, decreasing by US$128 million, driven by international sales and partially offset by a decline in domestic sales. Net sales also benefited from the opening of new stores internationally, which were offset by domestic closures.

Looking at TRU’s five main product segments on the domestic front, two are up slightly; learning (19.6% to 20.4%) and seasonal (9.1% to 9.4 %); two are down: entertainment (6.8% to 6.5%) and baby (47.9% to 47.1%); and core toys was flat at 15.8%.

When you look at the same categories internationally, a similar picture emerges - two saw minor increases: learning (29.1% to 31.2 %) and baby (24.7% to 25%); while core toys (23.5% to 22.2%), entertainment (7.1% to 6.3%) and seasonal (14.7% to 14.5%) are down slightly.

Despite the stagnant sales, TRU is making progress in other areas as it has managed to reduce its costs significantly since it introduced its transformation strategy in 2014. Since then it has realized US$248 million or 76% of the US$325 million target. TRU expects to achieve the balance by the end of fiscal 2016.

Earlier this year, TRU updated its transformation strategy, placing emphasis on transforming customer experience in-store and online, optimizing the company’s US$1.2 billion e-commerce business, international growth (particularly in China and Southeast Asia) and restructuring the company’s operations.

In June, TRU chairman and CEO Antonio Urcelay retired and was replaced by David Brandon, the former head of Domino’s Pizza.

Brandon notes TRU’s Q3 results strongly reflect the company’s fit for growth initiative. He also says as TRU enters the holiday homestretch, it is focused on making sure shoppers have an enjoyable experience in-store and that all the hottest toys are in-stock.

About The Author
Patrick Callan is a senior writer at Kidscreen. He reports on the licensing and consumer products side of the global children's entertainment industry via daily news coverage and in-depth features. Contact Patrick at



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