Although people cut back on buying apparel this spring at Macy's (M - Get Report) stores in the U.S., Gap (GPS - Get Report)  stores overseas -- and most other retailers, it seemed -- apparently shoppers couldn't resist picking up an innovative new toy for little Johnny or Jenny.

Toy retailer Toys "R" Us saw first-quarter same-store sales, which are sales from stores open longer than a year, increase a respectable 0.9%. Domestic same-store sales rose 0.1%, improved from a 2.3% drop last year, fueled by demand for dolls and toys for pre-schoolers.
Same-store sales in Canada surged 9.1% on top of a 4.7% increase a year ago. Earnings before interest, taxes, depreciation and amortization (Ebitda), adjusted for one-time items, rose 13% from the prior year to $79 million. In last year's first quarter, Toys "R" Us saw same-store sales rise 0.6%. The retailer is privately held but releases sales figures.
"The toy category just feels really hot right now," Toys R' Us Chairman and CEO David Brandon told TheStreet in an interview, pointing to strong momentum behind licensed toys such as Star Wars, robots and drones. Added Brandon, "Toy makers have gotten the price down [on many toys] to the level where it's really affordable to a regular family -- many of them provide an awful lot of excitement and innovation."
It's not too hard to find the toy innovation in the company's aisles, mostly from big players such as Hasbro ( HAS - Get Report) and Mattel ( MAT - Get Report) .
Excluding the impact of the strong U.S. dollar, Hasbro's first-quarter net sales increased 20% year over year. Adjusted for one-time items, earnings per share rose 81%. Sales were led by 24% and 41% gains in Hasbro's boys and girls segments, respectively.  Top-selling products included Star Wars toys, which benefited from Disney's ( DIS - Get Report)  box-office smash, as well as interest in Yahtzee, Nerf, Disney Princesses, Frozen and Play-Doh.
Meanwhile, with shifting demographics and ongoing criticism of Barbie's body style, Mattel decided to remake the iconic doll this year. The company unveiled its " Fashionistas" Barbie line in February, featuring tall, petite and curvy versions that will be sold alongside the original ultra-thin model. Further, there are seven skin tones, 22 eye colors and 24 hairstyles that accompany the line.
"We love the new Barbie program. What really struck me when I saw the new Barbie dolls is that it doesn't matter who you are, it doesn't matter what shape or size you are, or ethnicity, there is a Barbie you could imagine yourself being, and that's a really cool thing to do," said Richard Barry, Toys "R" Us executive vice president and chief merchandising, in a March 1 interview with TheStreet.

The latest results from Toys "R" Us likely also reflect its own efforts to compete more effectively against its larger rivals in the toy business, such as Walmart (WMT - Get Report)  and Amazon (AMZN - Get Report) . Those megastores have driven down toy prices and pressured Toys "R" Us's sales and profits in recent years. Toys "R" Us has increased floor space for interactive toys such as flying drones, worked closely with vendors to secure product exclusives and boosted the number of private label offerings in order to differentiate its stores from online foes.

Said Brandon, "I think the biggest asset we have that they [Walmart and Amazon] don't have is we are in the toy business 365 days a year. Fundamentally, they are not -- at least they aren't serious about it until the last 10 weeks of the year -- and our vendors know it."

With its top and bottom lines moving in the right direction, and a deal under its belt to refinance $850 million in debt, it begs the question whether Toys R' Us' long rumored initial public offering (IPO) is fast-approaching. The short answer remains "not quite yet" some 11 years after it was taken private by a consortium of investors for about $6.6 billion.
"Boy, I stopped predicting IPOs a long time ago," said Brandon, adding, "My general answer is that when the business gets on a trajectory where we have the consistent top line growth that we need and want to see, and investors will want to see, then that will be the right time to start talking about IPOs. Until we get to that point, we are still a work in progress."