NEW YORK (CNN/Money) - Toys "R" Us posted a fourth-quarter profit Wednesday that beat estimates but was lower than a year ago, hurt by weak holiday sales particularly for its video-game and baby products.

The Paramus, N.J.-based speciality toy retailer earned $278 million, or $1.30 a share, for its fiscal fourth quarter, down from $284 million, or $1.39, excluding special items in the year-earlier period.

Analysts surveyed by earnings tracker First Call had a consensus earnings-per-share forecast of $1.27, down from $1.33 forecast before the company warned of weak holiday season sales on Jan. 9.

Sales for the quarter rose to $4.9 billion from $4.8 billion a year earlier, which was slightly lower than First Call's forecast of $4.96 billion.

The retailer said it would plan "conservatively" for its business in 2003, citing economic and geopolitical uncertainty, but said it was "comfortable" with the current full-year consensus estimate of $1.20 a share in 2003 which is at the high end of the company's range.

Toys "R" US (TOY: down $0.20 to $7.71, Research, Estimates) CEO John Eyler said in an earnings conference call that the company expects to break even in the first three quarters of the year, although it expects a "tight" year overall with a 1 percent increase in same-store sales -- or sales at stores open at least a year -- in 2003.

Eyler also acknowledged that he expected a weaker back end of the year, with the fourth-quarter slightly negative.

"We're very conservative for the fourth quarter because we don't want to be as vulnerable to the holiday season as we have been in the past," Eyler said.

The company also announced it would eliminate about 200 additional jobs at the corporate level in the next few weeks as it continues to streamline operations. Eyler said the severance cost associated with the layoffs would reduce earnings for the first-quarter by 2 to 3 cents a share, and said he did not anticipate a large group of store closures for the year.

Analysts expect the company to post a loss of 1 cent for the first quarter, according to earnings tracker First Call.

Several analysts were expecting the company to announce a new head of its U.S. stores division. Eyler said was intensifying its search in the next 60 days for a new chief.

Toys "R" Us late January announced that the head of its U.S. operations, Gregory R. Staley, was leaving the company for personal reasons.

Same-store sales at the company's U.S. Toy Store division fell 1 percent for the year and the fourth quarter of 2002 despite Toys "R" Us' heavy promotion of its "Low Price Superstar campaign" over the holiday season, as lower prices from discount chains Wal-Mart (WMT: up $0.25 to $47.15, Research, Estimates) and Target (TGT: down $0.51 to $25.99, Research, Estimates) continue to lure away customers.

"We were outpriced by our competitors 12-to-1," said Eyler. "As toy specialists, we have to offset [Wal-Mart's] pounding down of prices. We've identified two ways to do this. We have to align our prices more sharply with them and make it more fun to shop with us."

Toy "R" Us stock is down about 60 percent from its 52-week high of $20.75.