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A bit less fun at Toys 'R' Us
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March 10, 1999: 10:17 a.m. ET
Holiday period earnings, sales below year earlier, but above forecasts
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NEW YORK (CNNfn) - Toys "R" Us got the coal in the stocking it expected for the year-end holidays, posting lower fiscal fourth-quarter earnings and sales Wednesday.
But the toy retailer's operating earnings of $323 million, or $1.28 per diluted share, came in 8 cents ahead of the analysts' consensus forecast compiled by First Call.
A charge related to the Paramus, N.J.-based company's settlement of antitrust claims brought by the Federal Trade Commission reduced net income for the quarter to $310 million, or $1.23 a diluted share. That compared with $378 million, or $1.32 a share, a year earlier.
Sales for the quarter ended Jan. 31 dipped to $4.94 billion from $4.98 billion.
The results were no surprise. Toys "R" Us (TRU) said in January that its same-store sales for the 8-week holiday season were down 7 percent from a year earlier. The company said that despite the Furby craze and the strength of Teletubbies toys, there weren't as many hot items this past holiday season as there were a year earlier.
"Our results reflect the much-publicized weakness in the overall worldwide toy industry, which was cycling against very strong sales of virtual pets, action figures and plush a year ago," said Robert Nakasone, the company's president.
Nakasone also blamed the weaker results on the price cutting in video game hardware and software, as well as on the clearance sales tied to the retailer's inventory reduction program.
Charges for that inventory reduction program, along with a revamping in its schedule of toy ordering and a remodeling plan for its stores, resulted in a fiscal year loss of $132 million, or 50 cents a diluted share. In the prior year, the company earned $490 million, or $1.70 a diluted share.
Sales for the year edged up 1 percent to $11.17 billion. But comparable store sales declined 4 percent.
Sales at its Babies "R" Us juvenile products stores were up 20 percent on a comparative basis, but the Kids "R" Us clothing stores came in with a 2 percent same-store decrease.
Nakasone said the company expects to remodel 200 Toys "R" Us stores this year and another 325 in 2000. The company has 704 Toys "R" Us stores in the U.S. and 466 in other countries.
Toys "R" Us stock closed Tuesday at 17-15/16, up 5/8. 
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Toys "R" Us
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