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Last Updated: Monday, 23 August, 2004, 18:32 GMT 19:32 UK
Toy firm enjoys return to profit
Toys R Us
Toys R Us has 684 stores in the US
Two weeks after revealing that it could sell its global toys business, US firm Toys R Us has returned to profit.

The firm made a profit of $61m(33m) in the three months to the end of July set against a $11m(6m) loss over the same period last year.

Despite returning to the black, the firm's sales fell 3.9% while core like for like sales at its US toy stores, excluding new stores, slumped 7.7%.

Toys R US is reviewing its business as it fights tough competition.

Rigorous re-evaluation

The company revealed earlier this month that it was considering a number of measures to revive its fortunes.

These include spinning off its fast growing juvenile subsidiary, Babies R Us, and even selling its core business.

The toy retailer has struggled in the face of fierce competition from discount operators such as Wal-Mart.

It is looking to make cost savings of $125m by 2005.

Second quarter earnings were boosted by a $200m positive reappraisal of the firm's income tax reserves.

This offset $228m in exceptional costs relating to store closures and restructuring.

The next 120 days are key for the global business
John Eyler, Toys R Us
Total sales over the period fell to $2.02bn from $2.10bn last year. Like for like sales at Babies R Us were up 1.8%.

Chief executive John Eyler said it would be several months before the future strategic direction of the business became clear.

"The past few months have been a time of rigorous re-evaluation for Toys R Us," he said.

"The next 120 days are key for the global toy business."

The retailer operates 1,400 stores, 585 outside the US.


SEE ALSO:
Toys R Us slashes costs
28 Jan 02  |  Business
Toys R Us losses widen
19 Nov 01  |  Business
Toys R Us warns on losses
09 Oct 01  |  Business
Toys R Us sinks into the red
20 Aug 01  |  Business


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