Retailer’s sales fall in second quarter

Monday, Aug. 23, 2004 | 11:06 a.m.

NEWARK, N.J. -- Toys "R" Us Inc. swung to a profit in the second quarter from a loss a year ago, buoyed by a reversal of $200 million in income tax reserves. But its sales fell 3.9 percent.

The earnings report, released today, is the Wayne-based company's first statement since its Aug. 11 announcement that it is considering selling its worldwide toy business in the wake of fierce competition from discounters, particularly Wal-Mart Stores Inc.

The company, which is the nation's second-largest toy seller behind Wal-Mart, added little information about its plans, which include a possible spinoff of its fast-growing Babies "R" Us division, which sells furniture, apparel, as well as accessories.

For the three-month period ended July 31, Toys "R" Us earned $61 million, or 28 cents a share. That compared with a loss of $11 million, or 5 cents a share, a year earlier.

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