Toys R Us said its third-quarter net loss widened, hurt by weaker sales in the U.S. and a big increase in income tax expense.
The report Tuesday came as the company is in the midst of the all-important year-end shopping season, during which retailers can make up to 40 percent of their annual revenue.
Net loss for the three months ended Nov. 2 totaled $605 million, from $105 million last year. Income tax expense rose by $379 million, related to a change in valuation allowance for some assets.
Revenue fell 5 percent, to $2.49 billion from $2.61 billion. Revenue in stores open at least one year, a key retail metric, fell 5.2 percent in the U.S., hurt by weakness in learning, baby and juvenile and core toy categories. The company said the earlier release of its “Big Book” promotional catalog also hurt revenue. Revenue in stores open at least one year fell 3 percent internationally.
Privately held Toys R Us is facing tough competition from online stores and discounters, and has been working to improve its online offerings, offer more exclusive toys and offer a price-match guarantee.