toys r us critical analysis

Toys R Us, Inc. had a decline in revenue for the second quarter with sales of $13.5 billion, down from $14 billion the year before. Its profit dropped to $38 million for the recent year, from $149 million a year earlier. Net sales were $2.4 billion, a decline of $175 million or 6.9% versus the prior year. Toys R Us, Inc. also had an operating loss of $46 million, compared to operating earnings of $43 million in the year earlier, a decrease of $89 million. Overall, Toys "R" Us reported a loss of $113 million, compared with a year-earlier loss of $36 million. This report will conduct a Situation Analysis for Toys R Us, Inc. of potential causes of company’s problems and will summarize the primary reasons for poor performance.
Revenue Were Down Toys "R" Us attributed its weak sales performance primarily to declines in the juvenile, seasonal and entertainment categories. Soft demand in the electronics aisle hurt Toys R Us during the last holiday season, though the company has sought to sell more learning and construction toys. Antonio Urcelay, the company’s new chief executive, blamed the soft sales on a challenging global macroeconomic environment, as well as prolonged cool weather, themes that have been cited by a number of retail executives. The company has more recently been pounded by a weak toy industry, including a steep drop in videogame sales, and fierce competition from discounters.
U.S. holiday sales for the company declined 4.7 percent, while revenue from its international unit sank 6.4 percent. Sales during the holiday season are usually the most profitable for retailers, with revenue from the quarter contributing to more than 40 percent of annual sales for the company. Comparable store net sales were down 3.5% in the Domestic segment and 3.8% in the International segment. Some former employees said one misstep was Toys R Us deciding not to invest in building an e-commerce website from scratch. Instead, the company has stuck with a seven-year-old