Toysrus.com reports second-quarter net loss despite rising sales.

Toysrus.com, the online channel of Paramus, NJ-based Toys “R” us. Inc., reported operating losses of $18 million in its second fiscal quarter ended August 4, down from $20 million in last year’s second quarter, on revenues that nearly quadrupled to $35 million from $9 million a year ago. Fixed costs associated with the company’s alliance with Amazon.com have a higher impact on operating earnings in the first three quarters of the year, which traditionally generate lower revenues, company officials said. Toysrus.com expects to see the impact decrease dramatically beginning in the third quarter of the year as its revenue stream begins to increase. During the second quarter, two other web sites operated by Toys “R” Us,” Babiesrus.com and Imaginarium.com, were migrated to the Amazon.com platform.

Overall, Toys “R” Us reported a net loss of $29 million for its second quarter compared with net income of $3 million for Q2 2000, on sales that rose 1% over last year. For its first six months, the company reported a net loss of $47 million, compared with net income of $18 million, on sales that rose 1% from the first six months of last year. Excluding a first quarter 2000 pre-tax gain of $315 million from the initial public offering of Toys “R” us Japan, net income was $218 million in the first six months of this year. The company cited heavy investment in store remodeling and temporary disruption of businesses as its stores are changed to the new “Mission Possible” format as the reason for flat comparable store sales in the year to date.