Consolidated same stores sales increased by 0.5%, and operating earnings improved to $18m from $15m.
Toys R Us’ financial results for the second quarter, ending 30th July 2016, show that operating earnings improved by $3m to $18m, and international same store sales grew for the 10th consecutive quarter, driven by strength in the Canada and Asia Pacific markets. In addition to this, the company successfully reached an agreement to refinance all of its Toys R Us 2017 notes and a portion of its 2018 maturities.
Domestic same store sales were flat, with improvements in the seasonal and core toy categories offset by decreases in the entertainment and baby categories. Domestic e-commerce sales were up 15%.
Excluding a $13m favorable impact from foreign currency translation, net sales declined by $24m. The decrease was mainly attributable to domestic store closures, partially offset by international same store sales growth.
Gross margin dollars were $862m, a decline of $13m compared to the prior year period. Excluding a $4m favorable impact from foreign currency translation, gross margin dollars decreased by $17m. Net loss improved by $4m to $95m, compared to $99m in the prior year period.
“We are pleased with our successful refinancing activities which will further strengthen the company’s financial foundation. This will enable us to continue to execute on our operational turnaround and compete in what continues to be a challenging retail environment,” said Dave Brandon, chairman and chief executive officer at Toys R Us. “As we enter the critical holiday season, we are focused on creating a world class shopping experience and ensuring that we consistently deliver the products our customers want, regardless of when and how they want to shop with us.”