Is Toys”R”Us Turning It Around?

It’s not a great time to be in the brick-and-mortar toy business, what with new deals to be had every single day online and kids more predisposed to digital media anyway. Still, Toys”R”Us is showing signs that it could be pulling out of its extended sales funk.

That’s the look of things from the retailer’s Q4 and year-end earnings call that took place Wednesday (March 9). Consolidated same-store sales increased 2.3 percent in the last quarter alone, with a modest 0.9 percent spike throughout 2015. Toys”R”Us also received substantial boosts from international stores, increasing the net number of sales in those locations over the course of the year.

Toys”R”Us CEO Dave Brandon called the earnings report a shot in the arm for the previously struggling retailer.

“I am very encouraged by our positive consolidated same-store sales in what was a very competitive marketplace,” Brandon said in a statement. “Throughout the year and especially during the holiday season, we focused on improving our execution to deliver a positive and memorable shopping experience to our customers. We significantly improved our performance, but we can and will make further progress on our quest to achieve flawless execution in every aspect of our operations. We grew Adjusted EBITDA by 25 percent by successfully executing a number of key initiatives, while continuing to take advantage of the progress we’ve made to right-size our cost structure.”

Brandon and Toys”R”Us may be giddier with their turnaround than they let on. The Wall Street Journal reported just last month that the retailer was seeking to unload $1.6 billion in junk bonds before they come due in 2018. While no amount of sales increases will cover that gap, a few steps in the right direction may help Toys”R”Us command a little more respect with the right partners when attempting to refinance in the future.