Toys “R” Us Reports Q1 Results

toysrus.croppedToys “R” Us reported financial results for the first quarter of fiscal 2017, which ended April 29, 2017. Net loss increased $38 million to $168 million for the quarter, and consolidated adjusted EBITDA was $44 million for the quarter, a decline of $35 million.

Consolidated net sales were $2.2 billion, a decrease of $113 million compared to the prior year period. Excluding a $24 million negative impact from foreign currency translation, net sales declined by $89 million largely attributable to declines in the baby category.

Consolidated same store sales decreased by 4.1 percent, driven by a 6.2 percent decline in domestic business. International declined by 0.6 percent, resulting from weaker sales in Europe and was partially offset by growth in Asia Pacific.

Gross margin dollars were $783 million, a decline of $63 million compared to the prior year period. Excluding a $10 million unfavorable impact from foreign currency translation, gross margin dollars decreased by $53 million. Gross margin rate was 35.5 percent, a decrease of 100 basis points.

Operating losses were $54 million, an increase of $47 million compared to the prior year period. Domestic segment operating earnings declined by $38 million primarily due to reduced gross margin dollars. International operating earnings decreased by $10 million due to increased operating expenses.

Adjusted EBITDA for the quarter was $44 million, compared to $79 million in the prior year period.
The above results produced a net loss of $164 million, compared to $126 million in the prior year period.