Toys R Us Reports Lower Earnings
PARAMUS, N.J. (AP) _ Toys R Us Inc.’s reported Monday its first-quarter earnings fell 10.5 percent, but the retailer’s executives said they expect demand for ``Star Wars″ merchandise to make 1999 a good year.
Toys R Us earned $17 million, down from $19 million during the same period last year.
Per-share earnings were unchanged at 7 cents, and beat Wall Street expectations of 4 cents. Toys R Us had fewer shares outstanding in the latest quarter.
Sales were $2.16 billion, up 5 percent from $2.04 billion during last year’s first quarter.
Toys R U has struggled in recent years and was surpassed earlier this year as the nation’s largest toy retailer by the Wal-Mart discount chain.
CEO Robert Nakasone said U.S. store sales were up 1 percent for the quarter, and said the chain expected strong profits from the sales of ``Star Wars″ merchandise timed to the release of the new movie and sales of action figures, computer software and video games.
Toys R Us also plans to remodel 200 stores in 1999 and broaden its merchandise to include more clothing, electronics and bargain items. The decision to reformat stores came last year after the Paramus-based chain cut 3,000 jobs.
International toy sales were unchanged, Nakasone said, and store sales at the company’s Kids R Us chain fell. But the company’s Babies R Us division reported a double-digit gain in sales, and the company plans to open 20 new stores in 1999.
The company also plans to expand its sales of toys on the Internet, creating a subsidiary called toyrus.com. It has also hired a new advertising agency.