SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended October 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-11609
TOYS "R" US, INC.
Incorporated pursuant to the Laws of Delaware
Internal Revenue Service - Employer Identification No. 22-3260693
461 From Road, Paramus, New Jersey 07652
(201) 262-7800
Indicate by check mark whether the registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
251,024,719 shares of the registrant's Common Stock
were outstanding on November 24, 1998.
<PAGE>
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets................................2
Condensed Consolidated Statements of Earnings........................3
Condensed Consolidated Statements of Cash Flows......................4
Notes to Condensed Consolidated Financial
Statements...........................................................5
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition............................................................7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ..........................................11
Item 5. Other Information ..........................................11
Item 6. Exhibits and Reports on Form 8-K ..........................12
SIGNATURES....................................................................13
1
<PAGE>
<TABLE>
TOYS "R" US, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
<CAPTION>
October 31, November 1, January 31,
1998 1997 1998
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 250 $ 283 $ 214
Accounts and other receivables 167 174 175
Merchandise inventories 3,256 3,923 2,464
Prepaid expenses and other current assets 79 74 51
Total current assets 3,752 4,454 2,904
Property and equipment,net and other assets4,789 4,677 4,703
Goodwill, net 349 358 356
$ 8,890 $ 9,489 $ 7,963
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 1,723 $ 1,261 $ 134
Accounts payable 2,027 2,290 1,280
Accrued expenses and
other current liabilities 469 488 680
Income taxes payable 98 54 231
Total current liabilities 4,317 4,093 2,325
Long-term debt 817 901 851
Deferred income taxes 168 235 219
Other liabilities 247 129 140
Stockholders' equity 3,341 4,131 4,428
$ 8,890 $ 9,489 $ 7,963
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
TOYS "R" US, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share data)
13 Weeks Ended 39 Weeks Ended
October 31, November 1, October 31, November 1,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $ 2,171 $ 2,142 $ 6,234 $ 6,055
Costs and expenses:
Cost of sales 1,831 1,456 4,638 4,136
Selling, advertising, general &
administrative 600 533 1,638 1,514
Restructuring charge 294 - 294 -
Depreciation and amortization 65 59 187 171
Interest expense - net 28 22 72 58
2,818 2,070 6,829 5,879
Loss)/earnings before income taxes (647) 72 (595) 176
Income tax (benefit)/expense (172) 26 (153) 64
Net (loss)/earnings $ (475) $ 46 $ (442) $ (112)
Basic (loss)/earnings per share $ (1.85) $ .16 $ (1.64) $ .39
Weighted average basic shares outstanding 257.4 284.9 270.2 285.8
Diluted (loss)/earnings per share $ (1.85) $ .16 $ (1.64) $ .39
Weighted average diluted shares outstanding 257.4 288.9 270.2 288.7
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
TOYS "R" US, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(In millions)
<CAPTION>
39 Weeks Ended
October 31, November 1,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net (loss)/earnings $ (442) $ 112
Adjustments to reconcile net earnings
to net cash used in operating activities:
Restructuring and other charges 546 -
Depreciation and amortization 187 171
Deferred income taxes (51) 13
Changes in operating assets and liabilities:
Merchandise inventories (1,143) (1,709)
Accounts payable and other operating liabilities 510 677
Other operating assets (87) (67)
Net cash used in operating activities (480) (803)
Cash flows used in investing activities:
Capital expenditures, net (308) (388)
Cash flow from financing activities:
Short-term borrowings, net 1,590 958
Long-term borrowings 31 10
Long-term debt repayments (78) (136)
Exercise of stock options 16 58
Share repurchase program (705) (212)
Net cash provided by financing activities 854 678
Effect of exchange rate changes on cash and
cash equivalents (30) 35
Cash and cash equivalents:
Increase/(decrease) during period 36 (478)
Beginning of period 214 761
End of period $ 250 $ 283
Supplemental disclosures of cash flow information:
Income tax payments $ 111 $ 154
Interest payments $ 85 $ 79
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
4
<PAGE>
TOYS "R" US, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In millions)
1. Interim Reporting
The interim financial statements are unaudited and are subject to
year-end adjustments. However, in the opinion of management, all known
adjustments (which consist primarily of normal recurring accruals),
have been made and the interim financial statements present fairly the
consolidated financial condition and operating results for the
unaudited periods. Because of the seasonal nature of the Company's
business, results for interim periods are not indicative of results to
be expected for the fiscal year.
2. Comprehensive Income
As of February 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. SFAS No. 130 establishes new rules for the
reporting and display of comprehensive income and its components;
however, the adoption of this Statement had no impact on the Company's
net income or stockholders' equity. SFAS No. 130 requires changes in
the Company's foreign currency translation adjustments, which prior to
adoption were only reported as a separate component of stockholders'
equity, to also be included in other comprehensive income. Prior year
financial statements have been reclassified to conform to the
requirements of SFAS No. 130.
Comprehensive (loss) income amounted to $(456) million and $116 million
for the third quarter ended October 31, 1998 and November 1, 1997,
respectively. For the 39 weeks ended October 31, 1998 and November 1,
1997 comprehensive (loss) income amounted to $(411) million and $94
million, respectively, as a result of the change in foreign currency
translation adjustments.
3. Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, Accounting for Derivative Instruments and Hedging Activities,
which the Company is required to adopt in its fiscal year beginning
February 2000. Management does not anticipate that the adoption of the
new Statement will have a significant effect on earnings or the
financial position of the Company.
5
<PAGE>
TOYS "R" US, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In millions)
4. Restructuring and Other Charges
On September 16, 1998, the Company announced strategic
initiatives to reposition its worldwide business, as well as other
charges resulting in a total charge of $333 million ($265 million net
of tax benefits, or $1.03 and $.98 per share for the third quarter and
the first nine months of 1998, respectively). The Company determined
that the strategic initiatives required a restructuring charge of $294
million to close and/or downsize stores, distribution centers and
administrative functions. This worldwide plan includes the closing of
50 toy stores in the International division, predominately in
continental Europe, and 9 in the United States that do not meet the
Company's return objectives. The Company will also close 31 Kids "R"
Us stores, convert 26 nearby US toy stores and downsize its 2 Kids
World stores into combination stores in the new C-3 format discussed
below. Combination stores include toys and an apparel selling space of
approximately 5,000 square feet. Other charges consist primarily of
changes in accounting estimates of $39 million recorded in selling,
general and administrative expenses. Of the total restructuring and
other charges, $149 million relates to operations in the United States
and $184 million relates to International operations. Unused reserves
of $171 million are estimated to be utilized in the fourth quarter of
1998 and throughout 1999, with the exception of long-term lease
commitments, which will be utilized throughout 1999 and thereafter.
5. Inventory Markdowns and Other Charges
On September 16, 1998, the Company announced markdowns and other
charges to cost of sales of $345 million ($229 million net of tax
benefits, or $.89 and $.85 per share for the third quarter and first
nine months of 1998, respectively). The Company has designed a new
store format called C-3 which stands for Customer friendly,
Cost-effective and Concept for the future. The Company plans to convert
approximately 200 US toy stores to the new C-3 format in 1999. Of this
charge, $253 million was related to markdowns required to clear excess
inventory from its stores so the Company can proceed with its new C-3
store format on an accelerated basis. Another component of the charge
was inventory markdowns of $29 million related to the closing and/or
downsizing of stores discussed in footnote 4, above. The Company also
recorded charges to cost of sales of $63 million related to inventory
system refinements and changes in accounting estimates. Unused reserves
of $221 million are estimated to be utilized in the fourth quarter of
1998 and throughout 1999. Of these charges, $288 million relate to
operations in the United States and $57 million relate to International
operations.
6. Other Matters
See Part II - Item I - Legal Proceedings.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations
Total sales were $2.2 billion for the third quarter ended October 31, 1998, as
compared with $2.1 billion for the third quarter ended November 1, 1997, an
increase of 1.4%. For the first nine months of 1998, sales increased 3% to $6.2
billion as compared with $6.1 billion for the first nine months of 1997.
Excluding the impact of foreign currency, total sales increased 2% in the third
quarter and 4% for the first nine months of 1998, as compared with the same
periods in the prior year. The increase in total sales is attributable to the
Company's continued store expansion.
Comparable USA toy store sales decreased by 5% for the third quarter and 2% for
the first nine months of 1998, as compared with the same periods in 1997. The
decrease was primarily due to lower sales of video hardware, including the
impact of price deflation, as well as lower sales of virtual pets, plush and
action figures, all of which had strong sales in the same periods in the prior
year. Internationally, the Company experienced a same store sales decrease due
to last year's strong sales in video hardware sold at much higher price points,
lower sales of virtual pets, as well as the downturn in the Japanese economy.
Cost of sales as a percentage of sales increased by 16.3% and 6.1% for the third
quarter and first nine months of 1998, respectively, as compared with the same
periods in 1997. Cost of sales was negatively impacted by clearance markdowns of
$253 million, markdowns related to strategic initiatives of $29 million, and
inventory system refinements and changes in accounting estimates of $63 million
discussed below. Before the impact of these charges, cost of sales as a
percentage of sales increased by .4% and .6% for the third quarter and the first
nine months of 1998, respectively, as compared with the same periods in 1997.
This increase was due to a change in the sales mix consisting of a decrease in
the sales of both higher margin action figures related to the strength of Star
Wars a year ago and higher margin virtual pets, as well as higher sales of lower
margin video software merchandise.
Selling, advertising, general and administrative expenses (SG&A) as a percentage
of sales increased by 2.7% and 1.3% for the third quarter and first nine months
of 1998, respectively, as compared with the same periods in 1997. 1998 SG&A
includes $39 million of changes in accounting estimates discussed below. Before
the impact of the changes in estimates, the increase in SG&A as a percentage of
sales was .9% and .6% for the third quarter and the first nine months of 1998,
respectively, as compared with the same periods in 1997. This increase was due
primarily to new stores that opened in the latter half of 1997.
Depreciation and amortization increased by $6 million and $16 million for the
third quarter and the first nine months of 1998, respectively, as compared with
the same periods in 1997 as a result of the Company's continued store expansion
and growth.
As a result of extensive consumer research and renewed customer focus, the
Company is bringing together a number of successfully tested concepts into its
new C-3 store format, which stands for Customer friendly, Cost-effective and
Concept for the future. The Company combined what was learned from the Concept
2000 remodels with a strong focus on improving the merchandise offerings at the
stores, and has included more feature shops in the new C-3 stores. The Company
believes that the result will be a customer friendly store that will emphasize
the Company's strong selection, improve the customer's shopping
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
(continued)
Results of Operations (continued)
experience and enable the Company to better demonstrate price value. The Company
plans to convert approximately 200 US toy stores to the new C-3 format in 1999.
On September 16, 1998, the Company announced strategic initiatives and other
charges to reposition its worldwide business including the customer-focused
reformatting of its toy stores into the new C-3 format and restructuring its
International operations which resulted in a charge of $333 million ($265
million net of tax benefits). The strategic initiatives resulted in a
restructuring charge of $294 million. The other charges of $39 million primarily
consist of changes in accounting estimates. The Company is closing and/or
downsizing underperforming stores and consolidating distribution centers and
administrative offices. Details on the components of the charges are described
in the Notes to the Condensed Consolidated Financial Statements. Unused reserves
of $171 million are estimated to be utilized in the fourth quarter of 1998 and
throughout 1999, with the exception of long-term lease commitments, which will
be utilized throughout 1999 and thereafter.
The Company also announced markdowns and other charges of $345 million ($229 net
of tax benefits). Of this charge, $253 million was related to markdowns required
to clear excess inventory from stores. These markdowns should enable the Company
to achieve its optimal inventory assortment, improve controls, and streamline
systems so that it can proceed with the C-3 conversions on an accelerated basis.
The Company's objective with its new C-3 concept is to provide customers with a
better shopping experience leading to increased sales and higher inventory
turns. In addition, the Company recorded $29 million in markdowns related to the
store closings discussed above. The Company also recorded charges to cost of
sales of $63 million related to inventory system refinements and changes in
accounting estimates. Unused reserves of $221 million are estimated to be
utilized in the fourth quarter of 1998 and throughout 1999. Details of the
markdowns and other charges are described in the Notes to the Condensed
Consolidated Financial Statements.
The implementation of the strategic initiatives, markdowns and other charges
described above are expected to have a significant positive effect on Economic
Value Added or "EVA". EVA is the management system adopted by the Company to
determine whether its business initiatives and investments provide an adequate
return to its stockholders. The strategic initiatives, markdowns and other
charges are also expected to improve the Company's free cash flow and increase
operating earnings by more than $75 million in 1999, and even more thereafter.
Net interest expense increased by approximately $6 million and $14 million for
the third quarter and the first nine months of 1998, respectively, as compared
with the same periods in 1997. This was due to the increase in short-term
borrowings discussed below and the $4 million charge in the second quarter of
1998 relating to the early extinguishment of debt.
Foreign currency exchange did not have a material effect on net earnings for the
third quarter or the first nine months of 1998.
Financial Condition
The Company opened 5 new toy stores and 13 new Babies "R" Us stores in the
United States this year. The Company plans to open an additional 2 new Babies
"R" Us stores in the United States by the end of 1998. The Company closed 3 Kids
"R" Us stores in the United States this year. Internationally, the Company has
opened 27 new toy stores this year and plans on opening one additional franchise
toy store
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
(continued)
Financial Condition (continued)
by the end of 1998. The Company has closed 3 stores in the International
division.
Short-term borrowings, net of investments increased by approximately $495
million at October 31, 1998 as compared with November 1, 1997 due primarily to
cash used for the Company's share repurchase program and the early
extinguishment of $67 million principal amount of its of 8 1/4% debentures. The
current ratio has declined to .87 to 1 at October 31, 1998, as compared with
1.09 to 1 at November 1, 1997. This decline is due to the Company's strategic
repositioning program as well as the increase in short-term borrowings. As of
October 31, 1998, the Company has reduced consolidated inventory levels by $667
million as compared with the end of the third quarter last year. This reduction
is due to the markdowns discussed in Note 5 of the Condensed Consolidated
Financial Statements as well as the Company's effort to reduce consolidated
store for store inventory levels. The reductions have had a positive impact on
the Company's free cash flow, in turn enabling the Company to pursue
the stock buy back program.
The Company repurchased over 31 million shares of its common stock through its
share repurchase programs for a total of $705 million during the first nine
months of 1998. The Company completed its $1 billion share repurchase program,
announced in January 1994, and has $348 million remaining in its new $1 billion
share repurchase program announced in January 1998.
Annual capital expenditures for new and existing facilities are estimated to be
approximately $450 million in 1998. Cash requirements for operations, capital
expenditures, lease commitments, and the share repurchase program are expected
to be met primarily through operating activities, borrowings under the $1
billion revolving credit facility, issuance of short-term commercial paper and
bank borrowings by foreign subsidiaries.
Weighted average diluted common equivalent shares decreased to 257.4 million for
the quarter ended October 31, 1998, compared with 288.9 million for the same
period in 1997. For the nine month period ended October 31, 1998, weighted
average diluted common equivalent shares decreased to 270.2 million compared
with 288.7 million for the same period in 1997. The decrease was due primarily
to the Company repurchasing shares under the share repurchase programs.
Year 2000
The Company has been evaluating and addressing Year 2000 issues since the first
quarter of 1997. Year 2000 issues are those related to the inability of certain
computer software programs to properly recognize and process date-sensitive
information relative to the year 2000 and beyond. The Company's Year 2000
project includes four major elements: 1) information technology (IT) systems, 2)
non - IT systems, 3) relationships with key business partners and 4) contingency
planning. Approximately 95% of the required coding conversions on IT and non-IT
systems are expected to be completed by the end of this fiscal year. The Company
plans to complete all known remaining coding conversions by the end of the first
quarter of 1999. The Company is utilizing both internal and external resources
to implement the conversion of our systems for Year 2000 compliance.
The total estimated cost to achieve Year 2000 compliance is approximately $25
million, which is being expensed as incurred. These estimates exclude internal
labor and related costs. Approximately $13
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
(continued)
Year 2000 (continued)
million of these costs have been incurred through the end of the third quarter.
All of these costs are being funded through cash flows from operations. The
Company has identified significant business partners and is working closely with
them to understand their Year 2000 compliance status. The Company anticipates
minimal business interruption to occur as a result of Year 2000 issues within
its control. However, possible consequences include, but are not limited to,
loss of communication links with store locations, loss of electric power,
delayed product deliveries from major suppliers, and the inability to process
transactions or engage in similar normal business activities. In addition, not
all customer situations can be anticipated. The Company may experience an
increase of sales returns of products containing hardware or software
components. Such returns, if they occur, are likely to be the responsibility of
the manufacturers and are not expected to be material to the Company's financial
condition or results of operations. The Company believes the readiness of third
parties is the most significant area of risk to the Company related to Year
2000. However, the Company also believes that ongoing communication with and
assessment of readiness of these third parties will minimize this risk. The
Company has begun preliminary review but has not yet finalized a contingency
plan for possible Year 2000 issues. Contingency plans are expected to be in
place by the end of the second quarter of 1999.
The total cost of the Year 2000 project is not expected to have a material
effect on the Company's financial condition or results of operations. The costs
of conversion and the completion dates for the project are management's best
estimates.
The above Management's Discussion and Analysis contains forward looking
statements that involve inherent risks and uncertainties. Actual results may
differ materially from those contained in any forward looking statement. Please
see Item 5 of this report which addresses forward looking statements made by the
Company.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
1) On May 22, 1996, the Staff of the Federal Trade Commission
(the "FTC") filed an administrative complaint against the
Company alleging that the Company is in violation of Section 5
of the Federal Trade Commission Act for its practices relating
to warehouse clubs. The complaint alleges that the Company
reached understandings with various suppliers that such
suppliers not sell to the clubs the same items that they sell
to the Company. The complaint also alleges that the Company
"facilitated understandings" among the manufacturers that such
manufacturers not sell to clubs. The complaint seeks an order
that the Company cease and desist from this practice. The
matter was tried before an administrative law judge in the
period from March through May of 1997. On September 30, 1997,
the administrative law judge filed an Initial Decision
upholding the FTC's complaint against the Company.
The Company appealed the Initial Decision to the Commissioners
of the FTC. The Commission upheld the Initial Decision in an
Opinion and Order issued October 14, 1998. The Company is
entitled to have the United States Court of Appeals review the
FTC's decision, and plans to do so.
Since the commencement of the FTC proceeding, several class
action suits have been filed against the Company in various
federal courts and in State courts in Alabama, California and
New Jersey alleging that the Company has violated certain
federal and state competition laws as a consequence of the
behavior alleged in the FTC complaint. In addition, the
attorneys general of forty-four states, the District of
Columbia and Puerto Rico have filed a suit against the Company
in their capacity as representatives of the consumers of their
states, alleging that the Company has violated federal and
state antitrust laws as a consequence of the behavior alleged
in the FTC complaint. These suits seek damages in unspecified
amounts and other relief under state and/or federal law. The
federal class action and attorneys general suits have been
consolidated for pre-trial purposes in the United States
District Court for the Eastern District of New York.
The Company believes that both its policy and its conduct in
connection with the foregoing are within the law.
The Company also believes that these actions will not have a
material adverse effect on its financial condition, results
of operations or cash flows.
Item 5. Other Information
Cautionary Statement Regarding Forward Looking Information
All of the statements made on this Form 10-Q, other than
historical facts, are forward looking statements made in
reliance on the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. As such, they
involve risks and uncertainties that could cause actual
results to differ materially. The Company's forward looking
11
<PAGE>
PART II - OTHER INFORMATION
(continued)
Item 5. Other Information
(continued)
statements are based on assumptions about many important
factors, including ongoing competitive pressures in the
retail industry, changes in consumer spending,
general United States economic conditions (such as higher
interest rates and consumer confidence), and normal
business uncertainty. While the Company believes that its
assumptions are reasonable, it cautions that it is
impossible to predict the impact of certain factors which
could cause actual results to differ materially from expected
results. Forward looking statements speak only as of the date
they are made, and the Company undertakes no obligation to
update such statements in light of new information or future
events.
Stockholder Proposals
Sec. 2.1(b) of the Company's By-Laws provides for the
Company to provide notice of an upcoming Annual Meeting of
Stockholders at least 100 days in advance of such meeting.
Notice is hereby given that the Company's 1999 Annual
Meeting of Stockholders is expected to be held on June 9,
1999. Pursuant to Sec. 2.1(b) of the By-Laws, stockholder
nominations of persons for election to the Board of
Directors of the Company must be received by the
Company at its principal executive office, 461 From Road,
Paramus, New Jersey 07652, Attention: Secretary no later
than March 11, 1999 in order to be considered timely.
In addition, written notice of stockholder proposals
(other than nominations of persons for election to the Board
of Directors and other than proposals submitted to the
Company as stockholder proposals in accordance with Rule
14a-8 promulgated pursuant to the Securities Exchange Act
of 1934, as amended) for consideration at the 1999 Annual
Meeting must be received by the Company, at the address set
forth in the preceding paragraph, no later than March 10,
1999 in order to be considered timely. The persons
designated as proxies by the Company in connection
with the 1999 Annual Meeting will have discretionary voting
authority with respect to any stockholder proposal of
which the Company did not receive timely notice.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27.1 - Financial Data Schedule for the
quarter ended October 31, 1998.
(b) Exhibit 27.2 - Financial Data Schedule for the
quarter ended November 1, 1997 - Restated.
(c) On September 17, 1998, the Company filed a Form 8-K
in connection with the repositioning of its worldwide
business.
(d) On October 16, 1998, the Company filed a Form 8-K
in connection with the initial decision upheld by the
Federal Trade Commission.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: December 15, 1998 Toys "R" Us, Inc.
-----------------
(Registrant)
s/ Louis Lipschitz
(Signature)
Louis Lipschitz
Executive Vice President and
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of
Earnings as reported on the third quarter Form 10-Q and is qualified in its
entirety by reference to such financial statements
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> AUG-02-1998
<PERIOD-END> OCT-31-1998
<CASH> 250,000
<SECURITIES> 0
<RECEIVABLES> 167,000
<ALLOWANCES> 0
<INVENTORY> 3,256,000
<CURRENT-ASSETS> 3,752,000
<PP&E> 5,791,000
<DEPRECIATION> 1,586,000
<TOTAL-ASSETS> 8,890,000
<CURRENT-LIABILITIES> 4,317,000
<BONDS> 817,000
0
0
<COMMON> 30,000
<OTHER-SE> 3,311,000
<TOTAL-LIABILITY-AND-EQUITY> 8,890,000
<SALES> 6,234,000
<TOTAL-REVENUES> 6,234,000
<CGS> 4,638,000
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 483,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72,000
<INCOME-PRETAX> (595,000)
<INCOME-TAX> (153,000)
<INCOME-CONTINUING> (442,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (442,000)
<EPS-PRIMARY> (1.64)
<EPS-DILUTED> (1.64)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of
Earnings as reported on the third quarter Form 10-Q and is qualified in its
entirety by reference to such financial statements
RESTATED
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-03-1997
<PERIOD-END> NOV-01-1997
<CASH> 283,000
<SECURITIES> 0
<RECEIVABLES> 174,000
<ALLOWANCES> 0
<INVENTORY> 3,923,000
<CURRENT-ASSETS> 4,454,000
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0
0
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<INCOME-TAX> 64,000
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<EPS-PRIMARY> .39
<EPS-DILUTED> .39
</TABLE>
