March 5, 2003, 12:00 AM posts first-ever operating profit of $3 million in Q4

2002 sales rise 23% to $340 million at while staying flat at $11.3 billion at Toys R Us Inc. Q4 earnings swung $20 million from a loss of $17 million in Q4 2001 to earnings of $3 million in Q4 2002. posted its first operating profit in the fourth quarter of its fiscal year ended Feb. 1 when it earned $3 million vs. an operating loss of $17 million in the year-ago quarter. Revenues rose 11% to $193 million, the company reported today. For the year, posted an operating loss of $37 million, an improvement of 51% over an operating loss of $76 million for last year, on sales that rose 23% to $340 million.

“We are especially proud that achieved profitability for the first time in the fourth quarter, a full year ahead of plan,” says Toys R Us Inc. CEO John Eyler.

Contributing to a narrowing of the year’s operating loss at were higher margins due to bundled offerings, traffic and sales growth at web site brand extensions and, and tighter integration between and Babies R Us stores, the company said.

Citing “disappointing” sales in its U.S. toy stores that fell below projections, Toys R Us Inc., majority shareholder in, reported Q4 sales of $4.9 billion, flat with last year’s fourth quarter, and net earnings of $278 million, compared with net earnings of $158 million the year earlier. For the year, total sales that rose 1% to $11.3 billion, with net earnings of $229 million vs. $68 million for 2001. Results for 2001 include the impact of restructuring and other charges recorded in the fourth quarter of that year. Exclusive of 2001 restructuring charges, net earnings for the corporation rose 19% in 2002.

Toys R Us Inc., which cut some 700 store positions in January, says it will eliminate 200 additional positions at the corporate level, or about 10% of its total headquarters staff, over the next few weeks.


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