On Friday, Toys “R” Us Inc. reported financial results for both the full year and fourth quarter of fiscal 2014, which ended on January 31.
For full year fiscal 2014, net sales improved by $61 million, or 0.5 percent, excluding a $243 million negative impact from foreign currency translation, to $12.4 billion compared to the prior year. The improvement was within the international segment, primarily due to an increase in net sales from new stores and comparable store net sales, partially offset by an expected decline in domestic comparable store net sales.
International comparable store net sales were up 1.8 percent, primarily due to increases in the core toy, seasonal, and learning categories, partially offset by a decrease in the entertainment category (electronics, video game hardware and software). Domestic comparable store net sales were down 1.0 percent, primarily driven by declines in the entertainment, learning, and seasonal categories, partially offset by improvement in the core toy category.
For the fourth quarter of fiscal 2014, net sales declined by $96 million, or 1.8 percent, excluding a $188 million negative impact from foreign currency translation, to $5.0 billion compared to the prior year period.
International comparable store net sales were up 2.2 percent, primarily due to increases in the core toy, learning, and seasonal categories, partially offset by a decrease in the entertainment category. As expected, domestic comparable store net sales were down 4.5 percent, primarily driven by declines in the entertainment, learning, and seasonal categories, partially offset by improvement in the core toy category.
In other highlights, full year consolidated gross margin, as a percentage of net sales, improved by 80 basis points compared to the prior year, led by a domestic gross margin rate improvement of 150 basis points. The full year consolidated adjusted EBITDA improved by $59 million, or 10 percent, compared to the prior year, while consolidated net leverage for fiscal 2014 improved by 1.1x to 6.3x.
