Expansion costs eat into Toys ‘R’ Us profit
Children’s goods retailer Toys ‘R’ Us has reported a slip in half-year profits impacted by its expansion in the UK and setting up of its Australian operations.
The company – which operates the Toys ‘R’ Us store networks across Australia and New Zealand, selling toys, baby and hobby products – also has an online presence in the UK.
For the six months to January 31, wholesale revenue fell 27.8 per cent to $5.2 million, reducing total group revenue by 4.6 per cent to $22.3 million.
However, sales to consumers increased 5.7 per cent to $17.1 million, with tax-paid profit at $9.1 million.
At the end of the half, the total number of active customers reached 195,000 while the total value of orders received rose 36 per cent to $3.9 million.
“Toys ‘R’ Us will concentrate on deploying capital conservatively with the short-term focus on margin and a pathway to achieving a balanced combination of growth and profitability,” the ASX-listed company said in a results statement.
In the medium term, the company aims to achieve a 5 per cent market penetration in the toys, baby and hobby market in all of its licensed regions.
In September, the company relocated its office and bulk warehouse operations to its new purpose-built facility in Clayton, Victoria, consolidating all operations into one site.
The UK Toys ‘R’ Us and Babies ‘R’ Us websites launched in October last year.
- Further reading: UK expansion boosts December trading for Toys ‘R’ Us
The post Expansion costs eat into Toys ‘R’ Us profit appeared first on Inside Retail.