TRU plays up positives of otherwise lackluster Q4
WAYNE, N.J. — The decision to open fewer Express stores during the 2011 holiday selling season, along with a decline in comparable-store sales both in the United States and internationally, contributed to Toys“R”Us's fourth-quarter net sales decline of $47 million to $5.9 billion. On a positive note, the company's new ventures in Greater China and Southeast Asia have offset the sales decline.
Toys"R"Us said its strongest performing categories continue to be learning and core toys, while the entertainment category (which includes electronics, video game hardware and software) was the weakest, declining 7.3%.
Net earnings were $343 million, an increase of $13 million compared with $330 million in the prior year. The increase in net earnings was primarily attributable to a reduction in income tax expense and interest expense, the company said.
Jerry Storch, chairman and CEO, Toys“R”Us, said, “We continue to see sales and operational benefits from the integration of our juvenile and toy offerings under one roof. During the year we further invested in and strengthened our omnichannel and internet capabilities, providing increased speed and multiple ways by which customers can now order and receive products. We are also pleased with the performance of our international segment, where we are implementing our expansion strategy and broadening our reach in emerging economies that are experiencing GDP growth and rising incomes. To this end, we acquired the ownership interest in our licensee operations in Greater China and Southeast Asia, which we believe provides significant growth opportunities ahead.”
Net sales for the full year were $13.9 billion, an increase of $45 million compared with the prior year. Excluding the impact of foreign currency translation of $293 million, net sales were down due to a decline in comparable-store net sales of 1.7% in the domestic segment and 2.7% in the International segment. Partially offsetting the decrease was an increase in net sales from new locations within the international segment, which included, from the date of acquisition, business operations in Greater China and Southeast Asia.