Toys "R" Us' net loss widened slightly in the fiscal second quarter to $36 million, compared with $34 million for the second quarter of 2011. However, the company hailed the fact that operating earnings for its U.S. stores rose by $13 million.
Jerry Storch, chairman and chief executive officer of Toys "R" Us, put an optimistic spin on the results, saying in a statement released Thursday afternoon that he was pleased the retailer had improved its gross margin by 1.2 percentage points, and reduced inventory levels by $127 million during the quarter. The company, he said, is positioned to "execute effectively on our strategy as we move into the important holiday season."
Net sales for the quarter, which ended July 28, were $2.6 billion, down 3.6 percent, or $96 million, in part due to a foreign currency exchange rate impact of $47 million.
Storch also said challenging economic conditions in Europe hurt sales in its international division, although sales in China and Southeast Asia were strong.
Sales at stores open at least a year slid 3.4 percent in the United States and 4.4 percent in international markets.
Operating earnings were $43 million, a decline from $48 million in the second quarter of 2011. Adjusted earnings before interest, taxes, depreciation, and amortization were $148 million, down from $162 million a year earlier.
