Toys R Us Holds its own Against Online Holiday Competition
NEW YORK – Toys R Us reported stronger holiday sales despite intense competition from online retailers such as Amazon.com.
The company said Friday that sales at stores open at least a year rose 2 percent from Nov. 2 to Jan. 2, compared with last year’s holiday season. From Nov. 29 and Jan. 2, sales at stores open at least a year rose 3.7 percent.
Industry analysts pay close attention to these comparable-store sales figures because they exclude the volatility of newly opened or closed stores, providing a better picture of a retailer’s health.
The results are an illustration of advances made under new CEO David Brandon. After leaving shoppers wanting over the past few holidays, Brandon put a priority on ensuring that the hottest toys were in stock in the final stretch before Christmas. That was especially true for toys and games related to the new “Star Wars” movie, now the most lucrative film of all time.
It’s also a period of revival for the toy industry, which is expected to wrap up its strongest year in at least a decade.
Annual toy sales were projected to rise 6.2 percent to $19.9 billion last year, according to the NPD Group Inc., a market research firm that tracks about 80 percent of the U.S. toy market. That would be up from a 4 percent increase in 2014 and mark the biggest increase in at least 10 years since the group has tracked toys using its current system.
This is being driven at least in part by the strengthening job market.
The U.S. added another 292,000 jobs last month, according to a report from the Labor Department on Friday, bringing the total to 2.65 million jobs for the year. Since 1999, that’s second only to 2014.
Still, the big question remains whether the holiday sales came at the expense of profits. Toys R Us and others pushed heavy discounts this holiday season to pull in shoppers.
“Holiday sales results thus far are favorable, with the unknown at this point being margins and therefore profitability, which will provide a gauge into promotional impact,” said Moody’s Vice President Charlie O’Shea in a statement.
Toys R Us said that website sales were strong and demand was high for toys, learning products and seasonal goods. However, it said there was weak demand for electronics, video game consoles and video games.
In its U.S. stores, sales at stores open at least a year rose 1.4 percent between Nov. 2 and Jan. 2 and 2.9 percent between Nov. 29 and Jan. 2.
Toys R Us had greater growth in its international stores, thanks to stronger sales in Canada and Japan. Sales at international stores open at least a year rose 3.1 percent from Nov. 2 to Jan. 2. And 5.1 percent from Nov. 29 to Jan. 2. It said sales were weak in Europe.
The privately held retailer, based in Wayne, New Jersey, has more than 1,600 Toys R Us and Babies R Us stores around the world.