Toys R Us Warns of Lower Profit for the Year

Toys R Us Inc. warned that full-year profit will be lower than expected because holiday sales slipped. The toy retailer said sales at U.S. stores open at least a year fell 2% because of product shortages and increased competition. The company, based in Paramus, N.J., told analysts it was comfortable with revised profit estimates of $1.30 a share, excluding Internet costs, for its fiscal year ending this month. That’s less than the previous average estimate of $1.61 a share from analysts polled by First Call/Thomson Financial. Toys R Us is among specialty toy chains that face increased competition from Internet retailers such as Amazon.com Inc. and EToys Inc., while also losing customers to discounters such as Kmart Corp. and Wal-Mart Stores Inc. Toys R Us said its Internet sales totaled $39 million, hurt by its inability to ship all orders. Its Web site is expected to have a loss of 20 to 25 cents a share, the company said. Including that loss, Toys R Us expects profit of $1.10 a share, the company said. Shares of Toys R Us dropped $1.44 to close at $12.13 on the NYSE.