Toys R Us Says Christmas Sales Fell From a Year Ago

Toys R Us Inc. reported Wednesday that its Christmas sales fell from year-earlier levels--a sign that even toy stores fell victim to hard economic times this holiday season.

The nation’s largest specialty toy retailer attributed its trying season to the same problems that afflicted other store owners--a drop in consumer confidence, the weakening economy and the Persian Gulf crisis--but securities analysts said price-cutting also took a toll on sales.

Toys R Us said that while overall sales rose 7.7% during the eight weeks before Christmas, sales from its stores open at least a year were down 6%.

Analysts and investors believe that sales from stores open at least a year--also known as same-store or comparable store sales--provide a more accurate assessment of a retailer’s performance than overall sales. New stores often have extraordinarily strong sales that can skew a retailer’s results.

Meanwhile, struggling Hills Department Stores Inc. said Wednesday that it would close 28 unprofitable discount stores as part of a restructuring program that will reduce its fourth-quarter results by $125 million.

The decision to close the stores came just over a month after the 214-store chain announced a $4-million third-quarter loss and underwent a management shake-up.