Toys "R" Us Inc.'s fiscal first-quarter loss widened as the toy
retailer's same-store sales decreased and margins narrowed.
Antonio Urcelay, interim Chief Executive, said soft sales were
partially impacted by global economic challenges and prolonged cool
weather conditions around the world, which was similar to what
other retailers have faced. The continued weakness in the
electronics and entertainment category also hurt revenue, he
said.
Toys "R" Us was purchased in 2005 by Vornado Realty Trust (VNO)
and private-equity firms Bain Capital and Kohlberg Kravis Roberts
& Co. (KKR) for $6.6 billion. The retailer dropped plans for an
initial public offering earlier this year after almost three years
of withering sales and heightened competition from online players.
The company in February announced that former CEO Jerry Storch
would step down.
For the quarter ended May 4, Toys "R" Us reported a loss of $111
million, compared with a year-earlier loss of $60 million. Net
sales slipped 7.8% to $2.4 billion.
Same-store sales declined 8.4% domestically and fell 5.8%
internationally. Overall, the decrease was mainly due to lower
sales in the company's juvenile, seasonal and entertainment
categories.
Gross margin narrowed to 37.4% from 38.2%, primarily because of
margin rate declines in certain categories.
The latest period included a foreign currency translation impact
of $67 million.
Write to Debbie Cai at debbie.cai@dowjones.com
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