Toys ‘R’ Us sees strong December; overall holiday sales down
By Staff -- Gifts and Dec, 1/8/2009 11:11:00 AM
UPDATED 4:35 PM EST, 01/07/2009
WAYNE, N.J.—Toys “R” Us said Thursday its domestic comparable store sales rebounded in December, helped by online sales, but that its 2008 holiday season same-store sales were down more than 3 percent.
For the month of December—counted as the five week period from Nov. 30, 2008 to Jan. 3, 2009—the Toys “R” Us Domestic (U.S.) division reported a comparable store sales increase of 1.9 percent. That result surpased those of the wider retail community, which saw December sales fall an average of 1.7 percent according to the International Council of Shopping Centers, and beat TRU's primary rivals, Wal-Mart, where sales rose 1.7 percent in December (not including sales of fuel), and Target, where sales dropped 4.1 percent during the month. Expectations among Wall Street's retail watchers were for a sales drop of 2.2 percent in December retail industry wide.
“We believe these December results demonstrate the effectiveness of our strategy, as well as the resilience and vitality of our brand,” said Jerry Storch, TRU’s chairman and CEO. “Especially in this unprecedented economic environment, we were happy to see families come to our toy and baby stores, and shop online, to find holiday gifts for their children.”
The Domestic division’s comparable store sales for the nine-week 2008 holiday selling season, which spanned from Nov. 2, 2008 to Jan. 3, 2009, decreased by 3.4 percent, as the strength of December’s results “could not entirely overcome the overall economic climate and the late start of the season, which contributed to slow sales earlier in November,” according to TRU.
Without the inclusion of online sales, comparable brick-and-mortar store sales for TRU’s Domestic division would have increased 0.9 percent for December and decreased 4.1 percent for the holiday selling season.
Toys “R” Us’ Domestic division aggregates the company’s domestic Toys “R” Us stores, Babies “R” Us stores and Toysrus.com under one banner; a reporting structure introduced this fall reflective of the increasing blur between its Toys “R” Us and Babies “R” Us businesses as the percentage of stores housing both units under one roof grows.
The Toys “R” Us International division reported a comparable store sales decline of 4.9 percent for the month of December and a 5.1 percent same-store sales slip for the nine-week holiday season. Not including online sales, International brick-and-mortar comparable store sales would have decreased by 5.2 percent for December and 5.3 percent for the nine-week holiday period.
Commenting on its international business, TRU said: “Economic conditions varied around the world, with relative strength in Canada and Central Europe offset by declines in Japan and the U.K., the latter of which was also impacted by the liquidation of a major competitor [Woolworth’s].” The company notated that due to the late timing of the “Three Kings” holiday on Jan. 6, 2009, its holiday 2008 results do not include the benefits of “the full holiday selling period.”
Looking past the holiday season, Storch said that TRU had been making “significant and appropriate reductions in our capital spending and expenses as we further position the company to navigate through the present economic environment.”
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