Toys R Us
swung to a second-quarter profit after revealing recently that it was considering exiting its namesake business.
The toy chain posted a profit of $61 million, or 28 cents a share, for the quarter, compared to a loss of $11 million, or 5 cents a share, in the same period last year. Sales fell 3.9% from a year ago to $2 billion.
Excluding the impact of currency translation that increased 2004 second-quarter sales by $30 million, and a $68 million decline in sales associated with store closings, the company's total sales decreased 2.2%.
Two weeks ago, Toys R Us announced that it may sell its toy business and focus on its fast-growing Babies R Us unit. The company has been battered by stiff competition in recent years from discounters like
. If it does exit its core business, Toys R Us would join a growing list of companies that have folded from the toy business amid the discount retail revolution, including
and the protracted auction of
In its second quarter, the global toy business of Toys R Us posted a 7.7% drop in same-store sales, while its Babies R Us business posted a 1.8% increase in that measure.
"Maintaining an exceptionally strong balance sheet, ample liquidity and significant financial flexibility continue to be among Toys R Us' highest priorities," John Eyler, the company's chairman and chief executive, said in a statement.