The end is near. As Rick pointed out last month, Toys "R" Us (NYSE:TOY) will be going private at the end of July, ending nearly 30 years as a public company. Yesterday, the company reported its quarterly results for the last time as such, and unfortunately, it was a weak finish for a company that's been struggling for quite some time.
For the first quarter ended April 30, Toys "R" Us lost $41 million, or $0.19 per share, compared with a loss of $28 million, or $0.13 per share, a year ago. Net sales increased 3.6% to $2.1 billion, but a large portion came from lower-margin video products.
In the U.S., net sales were nearly unchanged from a year ago at $1.06 billion, but its operating loss more than doubled to $32 million. Internationally, the results appeared to be much better at first glance as overall sales jumped 11.3%.
However, excluding exchange rates, sales increased just 5.3%, while operating losses grew 43% to $20 million. Its online business did a bit better, increasing sales by 20.8% to $64 million. This segment also produced an operating loss, but it was reduced from $5 million to $2 million.
Finally, the one bright spot continues to be Babies "R" Us, which posted an increase in sales of 10.4% and even managed to generate an operating profit of $65 million.
It's a shame things had to end so poorly for Toys "R" Us, but it just wasn't able to compete with the discounted toys being sold at Wal-Mart (NYSE:WMT) and Target (NYSE:TGT). I understand why adults would want to save money at the discount stores, and I'm guilty, too, but think of the kids! Wandering around a huge store devoted entirely to children, with aisle after aisle overflowing with a plethora of toys, was as exciting as anything I might get the chance to take home. Hopefully, that experience won't be going away anytime soon for the kids of today.
For more details on the final moments of Toys "R" Us, check out Rick's Outgrowing Your Toys.
Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies discussed in this article.
