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Toys 'R' Us loss narrows
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November 19, 2001: 3:22 p.m. ET
No. 2 U.S. toy retailer cites remodeling costs, lower sales since Sept. 11.
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NEW YORK (CNN/Money) - Toys "R" Us. Inc. Monday reported a narrower third-quarter loss that met Wall Street forecasts as the No. 2 U.S. toy retailer got hurt by costs from refurbishing stores and cited lower sales following the Sept. 11 attacks.
For the quarter ended Nov. 3, Paramus, N.J.-based Toys "R" Us (TOY: Research, Estimates) posted a loss of $44 million, or 22 cents a share, compared with a loss of $65 million, or 32 cents a share, a year earlier. Analysts polled by earnings tracker First Call anticipated a loss of 22 cents a share.
Third-quarter sales fell about 2 percent to $2.17 billion from $2.2 billion.
"The third quarter was obviously a challenging one for Toys "R" Us," CEO John Eyler said. "As we indicated in our statement of Oct. 9, events associated with Sept. 11 had a 9 cent per share negative impact on our earnings this quarter. In addition to the difficult economic climate, our results also reflect substantial investments in our remodeling program and initiatives to enhance the customer experience in our U.S. toy stores."
Sales at stores open at least a year, a key gauge known as comparable- or same-store sales, tumbled 9 percent in the third quarter.
The company, which held a grand opening Saturday for its new flagship store in New York's Times Square, said it is "well positioned" to turn a fourth-quarter profit if sales meet current forecasts, and added that it expects to meet Wall Street's consensus forecast for the year.
Analysts on average expect a fourth-quarter profit of $1.42 a share compared with $1.23 a year earlier, and full-year earnings of 94 cents a share, a penny lower than last year.
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During the quarter, Toys "R" Us completed the renovation of 433 stores, exceeding its goal of 415 stores.
Eyler also said that while the company recognizes the risks associated with the slowing economy, new video game entries and other new products should "generate significant excitement" in the toy category. 
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