Toys “R” Us Reports Full Year and Q4 Results of Fiscal 2016

toys-r-us-logo 2Toys “R” Us Inc. today reported financial results for the full year and fourth quarter of fiscal 2016, which ended on January 28, 2017.  Consolidated Adjusted EBITDA was $792 million for the full year, a decrease of $8 million compared to the prior year.

For the full year fiscal 2016, consolidated net sales were $11.5 billion, a decrease of $262 million compared to the prior year. The decline was primarily due to domestic store closures, including the company’s Times Square and FAO Schwarz flagship stores, and a decline in consolidated same store sales. During the year, the Toys “R” Us opened 29 domestic stores, which included 27 outlet and express stores, and closed 16 stores. Internationally, the company opened 73 stores and closed 17.

Consolidated same store sales decreased by 1.4 percent. Domestic declined by 1.3 percent mainly attributable to the entertainment (which includes electronics, video game hardware and software) and baby categories, partially offset by an improvement of 2.5 percent in the toy categories, which includes seasonal, core toy, and learning.

Gross margin dollars were $4.1 billion, a decline of $118 million compared to the prior year. Adjusted EBITDA was $792 million, compared to $800 million in the prior year. The above results produced a net loss of $36 million, which was $94 million lower than the prior year net loss of $130 million.

For Q4 2016, consolidated net sales were $4.7 billion, a decrease of $192 million compared to the prior year period. The decrease was mainly attributable to a decline in consolidated same stores sales and domestic store closures, which included the Times Square flagship store.

Consolidated same store sales were down 3 percent. Domestic decreased by 2.3 percent primarily due to declines in the entertainment and baby categories, partially offset by improvements in the learning, seasonal and core toy categories. International was down 4.2 percent, with notable weakness in Europe for the quarter. International experienced declines in the entertainment, learning, and core toy categories.

Gross margin dollars were $1.6 billion compared to $1.7 billion for the prior year period, a decrease of $78 million. Adjusted EBITDA declined by $3 million to $571 million, compared to $574 million in the prior year period. The above results contributed to net earnings of $341 million, compared to $276 million in the prior year period.

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