Toys R Us 3rd-quarter loss widens

Toys R Us loss widens in 3rd quarter on weak US sales, higher income tax expense

Associated Press

WAYNE, N.J. (AP) -- Toys R Us said its third-quarter net loss widened, hurt by weaker sales in the U.S. and a big increase in income tax expense.

The report Tuesday came as the company is in the midst of the all-important holiday shopping season, during which retailers can make up to 40 percent of their annual revenue.

"Now, in the heart of the Christmas selling season, the team is fully focused on executing our holiday strategy and leveraging our strong in-stock position on the season's hottest toys," said CEO Antonio Urcelay.

Net loss for the three months ended Nov. 2 totaled $605 million, from $105 million last year. Income tax expense rose by $379 million related to a change in valuation allowance for some assets.

Revenue fell 5 percent to $2.49 billion from $2.61 billion. Revenue in stores open at least one year, a key retail metric, fell 5.2 percent in the U.S. hurt by weakness in learning, baby and juvenile and core toy categories. The company said the earlier release of its "Big Book" promotional catalog also hurt revenue. Revenue in stores open at least one year fell 3 percent internationally.

Privately held Toys R Us is facing tough competition from online stores and discounters and has been working to improve its online offerings, offer more exclusive toys and offer a price-match guarantee. The Wayne, N.J., company named Urcelay as permanent CEO in October after former CEO Jerry Storch left in February.

Separately, the company said Tuesday it will stay open 87 hours, from 6 a.m. Saturday, Dec. 21 through 9 p.m. on Christmas Eve., Dec. 24., to cater to last-minute shoppers looking for Christmas gifts.

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