Toys `R' Us Net For Fiscal Year To Miss Target
Toys "R" Us Inc. said it expects to report full-year earnings well below earlier expectations, reflecting weaker-than-expected holiday sales. The retailer's shares dropped 11% on the news.</br></br>The forecast for the company's fiscal year ending Jan. 29 was the latest setback in an attempted turnaround, and came after a favorable third quarter. Much of the retail world is celebrating big holiday sales, driven by a strong economy and a surging stock market.</br></br>Toys "R" Us told analysts it was "comfortable" with a reduced earnings-per-share estimate of about $1.10 a share for the year, down from about $1.40. The company said it expects to post an operating loss of 20 cents a share to 25 cents a share in its Internet business for the year, also wider than earlier expectations.</br></br>Toys "R" Us's retail Web site had trouble handling volume over the holidays, and to placate customers, it offered discounts and free shipping. Those moves contributed to the operating loss, said Louis Lipschitz, chief financial officer.</br></br>For the crucial nine-week holiday season ended Jan. 1, sales in U.S. stores open at least a year fell 2% compared with the year-earlier period. Analysts had been expecting same-store sales to rise to the mid single-digit range. In November, Wall Street had been buoyed by the retailer's robust third quarter when comparable-store sales were up 13% in the U.S.