Blooper Reel 2013 from TimetoPlayMag.com
Happy Holidays from TimetoPlayMag.com! Our team reviewed a ton of toys this year, so mistakes are bound to happen. Watch the funniest outtakes from 2013 here.
TRU Reports Q3
Toys “R” Us, Inc., reported financial results for the third quarter ended November 2, 2013.
“Our operating results in the third quarter were positively impacted by improved operating earnings at our International segment versus the prior year, but this was more than offset by the adverse impact of sales weakness on the operating results of our Domestic segment, which resulted in an overall decline in profitability,” said Antonio Urcelay, chairman of the board and CEO of TRU, in a statement.
Third quarter highlights show that comparable store net sales were down 5.2 percent in the Domestic segment primarily resulting from decreases in the learning, juvenile (including baby), and core toy categories, and the impact of the shifted timing in the release of this year’s Big Book promotional catalog versus the prior year. Comparable store net sales were down 3 percent in the International segment, which is an improvement over both the first and second quarter of fiscal 2013. The decline internationally was primarily due to decreases in the juvenile, entertainment (which includes electronics, video game hardware and software), and seasonal categories.
Net sales were $2.5 billion, a decrease of $118 million or 4.5 percent versus the prior year. Excluding the impact of foreign currency translation, which decreased net sales by $78 million, the company experienced a decline of $40 million primarily as a result of a decrease in comparable store net sales, partially offset by an increase in net sales from new locations.
Gross margin dollars were $896 million, compared to $967 million for the prior year, a decrease of $71 million. Foreign currency translation decreased gross margin dollars by $25 million. Gross margin, as a percentage of net sales, was 36 percent, a decrease of 1.1 percentage points versus the prior year. The reduction was the result of the Domestic segment performance and was primarily attributable to margin rate declines principally within the juvenile and core toy categories, due in part to the competitive pricing strategy and inventory clearance efforts, as well as a reduction in vendor allowances compared to the same period last year.
Selling, general and administrative expenses (SG&A) were $959 million, compared to $962 million in the prior year, a decrease of $3 million. Foreign currency translation decreased SG&A by $25 million. Excluding the impact of foreign currency translation, the increase in SG&A was primarily due to a $9 million increase in occupancy costs and a $7 million increase in payroll expenses, predominantly resulting from new stores and store improvements.
Adjusted EBITDA was negative $37 million, compared to $31 million in the prior year, a decline of $68 million. Operating loss was $140 million, compared to an operating loss of $75 million in the prior year, an increase of $65 million. Excluding Corporate expenses, the Domestic segment had a decrease in operating earnings of $70 million principally due to the decline in comparable store net sales, as well as a lower gross margin rate. The International segment had an increase in operating earnings of $8 million primarily due to the improvement in gross margin as a percentage of net sales.
Net loss was $605 million, compared to a net loss of $105 million in the prior year primarily due to an increase in income tax expense of $379 million. The increase in income tax expense was the result of a non-cash change to the valuation allowance on deferred tax assets as the Company has determined it is more likely than not that these assets will not be realized in the foreseeable future. Additionally contributing to the increase in net loss was a decrease in gross margin dollars and a one-time increase in interest expense of $51 million as a result of current year refinancing activity.
Liquidity and Capital Spending
The company ended the third quarter with $1.9 billion of liquidity, which included cash and cash equivalents of $369 million and unused availability under committed lines of credit of $1.5 billion. Through the end of the third quarter of fiscal 2013, the company invested $175 million primarily for store-related projects, opening of new stores and improvements to information technology and logistics systems and capabilities, compared to $215 million in the prior year.
On August 21, 2013, the company successfully completed a $985 million senior unsecured term loan credit agreement at its Toys “R” Us Property Company I, LLC subsidiary. The credit agreement matures on August 21, 2019, and bears interest equal to LIBOR plus a margin of 5 percent per annum, with a 1 percent LIBOR floor. The net proceeds, together with other funds available to the subsidiary were used to redeem in full the Toys “R” Us Property Company I, LLC $950 million senior unsecured 10.75 percent notes due 2017, plus interest, premiums, and expenses.
Google Releases Top Toy Search List 2013; See What’s Trending on TimetoPlayMag.com
Google released its annual “Zeitgeist: What Did the World Search for in 2013?” The 2013 Zeitgeist site provides 1,000-plus top-10 lists of popular and trending searches from 72 countries. See it here. According to Google, the 2013 top-10 U.S. toy search is as follows:
3. Digimon Fusion
4. Minecraft Toys
6. Palace Pets
7. Paw Patrol
8. Pacific Rim Toys
9. My Little Pony
10. Disney Planes
See what’s currently trending on TimetoPlayMag.com just days away from Christmas.
Retail Sales, Traffic Down Last Week Due to Winter Storm
ShopperTrak reported in-store retail sales for the week of Dec. 9 to Dec. 15 were down 0.8 percent from the same week last year. Retail in-store shopper traffic also fell last week by 19.9 percent compared to the same time period in 2012.
Saturday, Dec. 14 saw a decline in both retail sales and shopper traffic, largely a result of a weekend snowstorm that hit the Midwest and Northeast. Compared to the same day last year, brick-and-mortar retail sales fell 5.4 percent while in-store shopper traffic fell 25.9 percent.
“Last weekend’s extreme weather prevented many consumers from completing their holiday shopping,” said Bill Martin, ShopperTrak founder. “But those items remain on their shopping lists and we expect these individuals will add to the high levels of in-store shopper activity we usually see the weekend before Christmas.”
Perhaps these same consumers spent the weekend shopping online.
U.S. Government Wants to Study Violence in Video Games, Says WSJ
The Wall Street Journal reported last week that “legislative proposals to study whether videogames are linked to real-life violence or mental health—prompted by a rash of mass shootings—have stalled amid a campaign by the industry to quash the efforts, according to lobbying records and lawmakers. The Entertainment Software Association fought such bills in Connecticut, Massachusetts, Maryland, and New Jersey this year and in Oklahoma last year and is now taking aim at a similar federal bill.” Read about it here.