Toys `R' Us Reports Strong Sales, But Records Loss After Award
May 01, 2011
NEW YORK -- Toys ``R'' Us Inc. on Monday posted a 72% jump in second-quarter operating profit amid strong sales of games and dolls, but an award rendered against the retailer resulted in a net loss for the period. Excluding the item, Toys ``R'' Us reported income of $43.1 million, or 10 cents a share, in the quarter ended April 15, 2011 beat the estimates of analysts surveyed by First Call Inc. by a penny a share. A year ago, the company reported earnings of $25.1 million, or six cents a share. A $55 million arbitration award against Toys ``R'' Us resulted in a final loss of $7.5 million, or three cents a share, in the latest quarter. Earlier this year, the American Arbitration Association ordered Toys ``R'' Us to pay $46 million, plus interest, to Yusuf Ahmed Alghanim & Sons W.L.L., stemming from a dispute over a 1982 licensing agreement to operate stores in certain Middle Eastern countries. The company's overall sales, meanwhile, improved 8% to $1.74 billion. Same-store sales at toy stores in the U.S. rose 6% in the quarter and six-month period, driven by strong sales of basic products such as games and dolls. Paramus, N.J.-based Toys ``R'' Us owns and operates a chain of 651 domestic and 359 international toy stores, selling products ranging from video games, to dolls to diapers. The company also owns a chain of 206 Kids ``R'' Us children's clothing stories. The company expects to open about 30 new toy stores and about eight new Kids ``R'' Us stores in the U.S. this year and 60 stores internationally. In composite trading on the New York Stock Exchange Monday, the retailer's stock rose 37.5 cents to $29.125.
