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This
past year was a tumultuous one for our company, along with many top retailers.
Challenging economic conditions, coupled with the tragic and unprecedented
events of September 11, had a significant negative impact on our fiscal
2001 results.
We
were not pleased with our sales performance nor with our earnings performance
in 2001. While we can’t change it, I want to assure you that we’re committed
to delivering a solid 2002. We believe that’s an achievable goal.
It’s
important to note that despite the difficult retail climate post-9/11,
the successful execution of our strategies resulted in a solid fourth
quarter performance. We were able to increase net earnings before restructuring
and other charges in that quarter by 13 percent to $284 million or $1.39
per share, compared to $251 million or $1.23 per share in last year’s
fourth quarter. In addition, our inventory discipline was excellent, and
we ended the year with comparable store inventories down in every division.
In our U.S. toy store division, comparable store inventories were down
approximately $200 million, a 13 percent decrease. Total company inventory
was down $266 million or 12 percent.
While
we saw a number of positive developments in the fourth quarter, we could
not overcome the weakness exhibited during the prior three quarters. Thus,
for the full year, our total sales of $11 billion were essentially flat
with the prior year excluding the sales of Toys“R”Us-Japan, and our net
earnings, before the impact of the restructuring and other charges, were
$193 million or $0.94 per share, compared to net earnings of $264 million
or $1.23 per share in 2000, excluding the gain from the IPO of Toys“R”Us-Japan
and the Amazon.com
alliance non-recurring charges.
Nonetheless,
fueled by the momentum of our customer-focused strategic growth plan,
Toys“R”Us reached several milestones for building brand equity, unique
content and guest satisfaction. From the opening of our international
flagship store in Times Square to our new marketing campaign featuring
Geoffrey the Giraffe, to improving vendor relationships, to our solid
holiday performance in a very tenuous climate, all indications are that
we are still very much on track for fulfilling the strategic repositioning
we set out to accomplish two years ago.
 Responding
from the heart We
were hard at work executing our strategies last year, and then came September
11. The most difficult times reveal the true nature of a company and its
people. Throughout the days and weeks after September 11, the “R”Us family
responded with extraordinary kindness and generosity. We took care of
each other and we helped many in our communities.
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