WAYNE, N.J. (AP) — Toys R Us' net loss widened in the second quarter as sales declined, hurt by cautious consumer spending and a prolonged lull in the video game sector.
The report comes as the largest U.S. specialty toy retailer gears up for the all-important holiday season, which can account for up to 40 percent of a retailer's annual revenue.
Toys R Us is facing tough competition from online stores and discounters, and is in the midst of a CEO search since Jerry Storch left that position in February. Interim CEO Antonio Urcelay said the company is "intensely focused on finalizing our plans for the upcoming holiday season to ensure we are well-positioned during the highly competitive months ahead."
Some initiatives Toys R Us plans for the holiday season include offering 10 percent cash back on purchases for loyalty card members, up to $100, before Oct. 31; a price-match guarantee that extends to some online retailers; and free layaway until Dec. 15, along with other incentives.
The Wayne, N.J.-based company's loss for the 13 weeks ended Aug. 3 totaled $113 million. That compares with a loss of $36 million a year ago.
Revenue fell 7 percent to $2.38 billion from $2.55 billion a year ago. Revenue in stores open at least one year, a key measure of a retailer's financial health, fell 3.5 percent in the U.S. and 3.8 percent internationally, hurt by weak video game sales.
Privately held Toys R Us said it ended the quarter with $1.6 billion of liquidity, including $464 million in cash and $1.1 billion in credit.
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