TRU Reports Q1 Financial Results
Toys “R” Us, Inc., reported financial results for the first quarter ended May 1, 2010. Net sales for the first quarter of fiscal 2010 were $2.608 billion, an increase of 5.3 percent compared to $2.477 billion for the first quarter of fiscal 2009. Comparable store net sales grew by 1.9 percent in the domestic segment, while comparable store net sales declined by 1.4 percent in the international segment. Foreign currency translation had a positive impact of $75 million on net sales for the first quarter of fiscal 2010, as compared to the first quarter of fiscal 2009.
Adjusted EBITDA for the first quarter of fiscal 2010 increased to $123 million, up from $120 million for the first quarter of fiscal 2009. For the first quarter of fiscal 2010, gross margin as a percentage of net sales improved to 36.2 percent, compared to 35.9 percent in the first quarter of fiscal 2009. Selling, general, and administrative expenses (SG&A) for the quarter increased by $70 million to $858 million. Foreign currency translation accounted for approximately $26 million of this increase, and a reserve for certain unusual legal matters accounted for an additional $17 million of the variance. Excluding these two factors, SG&A expense was up $27 million, or 3.4 percent, due primarily to increases in store-related support for both ongoing operations and future expansion.
Operating earnings were $5 million for the first quarter of fiscal 2010, compared to $21 million for the first quarter of fiscal 2009. First quarter operating earnings for fiscal 2010 reflect the impact of the $17 million of unusual expense related to the legal reserve noted above.
TRU reported a net loss of $55 million for the first quarter of fiscal 2010, compared to a net loss of $35 million for the first quarter of fiscal 2009. Net interest expense increased by $32 million to $124 million in the first quarter of fiscal 2010, compared to $92 million in the first quarter of fiscal 2009. This increase was due to the $1.6 billion of real estate refinancings the company completed in the second half of last year, where the interest rates on the new debt are higher than the debt replaced. This was partially offset by lower average debt balances. Income tax benefit for the first quarter was $63 million, compared to $31 million in the first quarter of fiscal 2009.
4Kids Introduces Henson’s Scribbles
4Kids Entertainment has introduced The Scribbles, the newest irreverent character group derived from Jim Henson Designs, showcasing 14 new characters of the collection along with product samples from Japan. The Scribbles represent elements of our own psyche and imagination, brought to life by the magic of Jim Henson. Inspired by original scribbles by Jim Henson himself, these Scribbles embody all our pent-up emotions.
Since they were first introduced in 2009, Jim Henson Designs products have seen success in Japan. A range of products including apparel and accessories for children and adults is available in Tinkerbell stores, Kiddyland, and Fotoist Stores throughout Japan. Additionally, products from Sekiguchi, including plush and collectibles, are in stores across the country.
Fox Expands Avatar Program
Twentieth Century Fox Consumer Products is harnessing the success of Avatar, and a powerful merchandising program that registered $153 million in retail sales, into a long-term consumer engagement strategy that will include all-new merchandising partners in key categories.
During its initial release, James Cameron’s Avatar was supported by one of the most extensive merchandising programs in Fox Consumer Products’ history with more than 125 licensed products across four major categories, including toys, apparel, publishing, and video games. This fall, Fox Consumer Products will have more merchandise lined up to take advantage of the back-to-school, Halloween, and holiday seasons, including new entrants into the costume, board games, bedding, and social expressions categories. Additional partners include Rubie’s, MEGA Brands, JLA Home, Trends International, and Abrams.
Comcast Appoints JTMG
Comcast Entertainment Group (CEG) has selected Joy Tashjian Marketing Group (JTMG) as the licensing agent for certain marks and shows within the CEG portfolio. As part of CEG’s corporate objective to expand its licensing space, JTMG has been hired to handle brand campaigns for programming on E! Entertainment Television and G4 Channel.
The television brands to be represented by JTMG for licensing and merchandising are True Hollywood Story, Keeping Up with the Kardashians, Kourtney and Khloe Take Miami, Chelsea Lately, and The Soup from E! Entertainment and Attack of the Show and Human Wrecking Balls from G4.
JTMG will focus on all major consumer products categories for CEG’s entertainment brands, including apparel, travel and leisure, games, electronics, housewares, beauty, and fitness, among others.