Toys R Us, Venator Post Weak Results

Toys R Us Inc. said its operating profit fell 15% in the fiscal fourth quarter to $323 million, or $1.28 a share, but that exceeds analyst expectations of $1.20 a share. The leading toy retailer struggled amid weakness in the toy industry worldwide, with few blockbuster items to pull consumers into stores. The company also faced tough competition from discount retailers and falling prices for video games. Chief Executive Robert Nakasone noted that the results compare with a strong year-earlier period, when sales of virtual pets, action figures and video systems and games boosted profit. Revenue fell a slight 0.8% to $4.94 billion for the three months ended Jan. 30. It did not report sales at stores open at least a year. Nakasone has started testing a new store format and has been closing stores, cutting jobs and reducing inventory. Analysts said the moves may not have come soon enough to help the latest results but that they could revive earnings and sales figures for the current fiscal year.

Separately, Venator Group Inc. reported that its profit plunged 74% in its fiscal fourth quarter to $29 million, or 21 cents a share, as its retail stores slashed prices to draw shoppers into its Foot Locker and Champs Sports stores. Analysts were expecting 23 cents. Revenue fell 5.8% to $1.33 billion, and sales at stores open at least a year were down 4.6%. The company, formerly known as Woolworth Corp., shifted its focus to athletic wear last year, but consumers started switching to dressier clothing and shoes. The results for the period ended Jan. 30 include a gain of $44 million, or 32 cents a share, from the sale of the Woolworth Building in New York City. Analysts said they had factored the gain into their estimates.