Toys 'R' Us cuts losses after cutting its costs
TOY | Quote | Chart | News | PowerRating -- Toys "R" Us reported first-quarter results Tuesday that showed the Wayne-based retailer narrowed its losses by cutting costs in the midst of declining sales.
The net loss was $35 million for the quarter ending May 2, compared with $36 million for the prior-year period. Sales declined 8.5 percent to $2.47 billion from $2.7 billion in the first quarter of 2008. Operating earnings increased to $21 million from $2 million, the company said.
Toys "R" Us said it reduced selling and administrative costs by $107 million by trimming expenditures for transportation, advertising and compensation.
The company, in a press release Tuesday, focused on the positive, rather than the decline in sales, saying the numbers reflected improved net results for the company. Toys "R" Us, in the filing with the Securities and Exchange Commission, attributed the sales decline to economic conditions, price reductions and international currency fluctuations.
Sales at stores open at least a year declined 5.4 percent compared with a 1.4 percent increase in the previous year's period.
The first quarter is historically the least important quarter for Toys "R" Us, and traditionally is a quiet time of year for toy sales.
Like other toy merchants, Toys "R" Us is looking for ways to boost revenue and increase market share during the economic downturn. Sales of toys fell 3 percent to $21.6 billion last year from 2007, according to researcher NPD Group Inc.
Toys "R" Us has responded to the effects that rising unemployment and declining home values are having on consumers by creating value shops at the front of its stores to showcase toys at low prices. The "$1-$2-$3 Fun" shops offer about 100 items for $3 or less, the company said in April.
This article contains material from Bloomberg News.
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