TOY
TOYS <TOY.N> SAYS REPURCHASED 19 MLN SHRS SINCE START OF FISCAL
TABLE -Toys <TOY.N> meets Q2 EPS target of $0.05
PARAMUS, N.J.,, Aug 17 (Reuters) -
For the three months ended Aug. 1
1998 1997
Shr basic $0.05 $0.13
Shr diluted $0.05 $0.13
Net $13,500 $36,700
Revs 2,000,000 2,000,000
Avg shrs basic 273,000 285,700
Avg shrs diluted273,600 289,400
For the six months ended
Shr basic $0.12 $0.23
Shr diluted $0.12 $0.23
Net $32,700 $66,100
Revs 4,063,400 3,913,100
Avg shrs basic 276,600 286,300
Avg shrs diluted278,000 288,900
(All data above 000s except per share numbers)
Second-quarter and six-month 1998 results include a
one-time, pre-tax charge of $3.7 million relating to the early
extinguishment of long-term debt.
NOTE: Full company name is Toys "R" Us, Inc.
Toys 'R' Us 2nd-Qtr Profit Falls 57% as Sales Slow
Paramus, New Jersey, Aug. 17 (Bloomberg) -- Toys ''R'' Us Inc.'s fiscal second-quarter profit fell 57 percent as the world's top toy retailer failed to find a hit toy to help regain sales lost to Wal-Mart Stores Inc. and other discount chains.
Profit before a charge fell to $15.9 million, or 6 cents a share, from $36.7 million, or 13 cents, a year earlier. The retailer was expected to earn 5 cents in the quarter ended Aug. 1, according to analysts polled by First Call Corp.
Profits have fallen three quarters in a row as the retailer lacked a crowd-attracting toy like last year's Star Wars and Jurassic Park action figures and the Tamagotchi electronic pets. At the same time, discounters including Target are cutting prices and winning over customers. That's forcing Toys ''R'' Us to curb its store expansion and cut costs so it can reduce prices.
''This year or next year Wal-Mart could eclipse it as the leader,'' said analyst Sean McGowan of Gerard Klauer Mattison, who rates Toys ''R'' Us ''hold.''
Wal-Mart accounted for 16.4 percent of the U.S. toy market last year, up from 15.3 percent in 1996, according to market researcher NPD Group. Dayton Hudson Corp.'s Target's share rose to 7.1 percent from 6.4 percent. Toys ''R'' Us, meanwhile, saw its share decline to 18.4 percent from 18.9 percent, NPD said.
Discount chains sell toys, especially popular ones, at low prices to draw shoppers into the stores and then encourage them to buy other, higher-profit products, analysts said.
Shares of Paramus, New Jersey-based Toys ''R'' Us rose 1/16 to 20 1/16 in late morning trading of 892,400, compared with the three-month daily average of 1.45 million. The stock has fallen 36 percent so far this year, lagging the 10 percent gain in the Standard & Poor's 500 Index.
Slow Sales
Revenue rose 1.6 percent to $2.02 billion from $1.98 billion.
Sales at stores open at least a year fell 2 percent in the U.S. So-called same-store sales also declined overseas, hurt in part by lower sales of video games and the struggling Japanese economy, the company said.
Slow sales have left Toys ''R'' Us with larger-than-expected inventory levels, forcing it to delay shipments from suppliers while it clears its shelves. That's also hurt Toys ''R'' Us's market share because toymakers are turning to other retailers to sell their wares, McGowan said.
Chairman and Chief Executive Robert Nakasone has been trying to revive the struggling retailer since he took the helm in February.
Toys ''R'' Us started selling more than 1,500 products on the Internet last month to reach out to customers who frequent the Web. The variety of merchandise offered on that site is expected to double by the holiday shopping season, and may include goods that aren't available in its stores.
Restructuring
The retailer is restructuring its traditional stores to help boost sales year-round, with plans to reintroduce a wider selection of kids' clothing and carry more candy, electronics and software.
Cost-cutting plans include opening fewer U.S. stores this year and eliminating $250 million in inventory. This quarter, the retailer's inventory is $220 million lower than a year earlier.
Toys ''R'' Us operates 1,460 stores, including 697 toy stores in the U.S., 446 international stores including franchise stores, 214 Kids ''R'' Us children's clothing stores, 101 Babies ''R'' Us stores and two Kids World stores.
It plans to open about five toy stores in the U.S. this year and 15 to 20 Babies ''R'' Us locations. Internationally, the company will open about 35 stores, including 15 franchise stores.
The company also said it has bought back 19 million shares so far this fiscal year for about $480 million.
In the most recent quarter, a pretax charge of $3.7 million for the early retirement of debt resulted in net income of $13.5 million, or 5 cents a share. There were no gains or charges in the year-earlier period. |
