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First and foremost, we must complete the repositioning of Toys“R”Us U.S. and deliver significant earnings improvement. We are committed to driving sales growth in the core toy business, with disciplined expense and inventory control essential to achieving meaningful earnings improvement. Nothing we do will impact our company more positively than showing substantial improvement in Toys“R”Us U.S., and therefore this is our most important priority. Second,
we will focus on sales and earnings growth in all other divisions. We
have solid plans in place to grow sales and earnings across all divisions,
and we must aggressively execute those plans. It’s our job to make sure
that we increase sales and earnings every quarter of the fiscal year.
We
must continue to find ways to drive costs out of our business when they
don’t increase sales or earnings. For that reason, expense reduction is
our third priority. We’ve already taken a significant step in that effort
by consolidating all non-merchandise purchasing so that it can be managed
effectively while leveraging our purchasing power and creating efficiencies.
This builds on the solid expense management we achieved in 2001 as well
as the reductions in SG&A inherent in our recently announced restructuring.
And
finally, our fourth priority is to continue to build a world-class organization
by developing our existing staff and by adding talented individuals to
strengthen our capability. We will pursue our efforts to build upon our
shared services model. We are also committed to developing training programs
in support of building skills at all levels, and we will continue to implement
programs that will recognize and reward superior results.
We are encouraged by the results of our strategic initiatives, and we sincerely appreciate the patience of our shareholders as we continue to move forward in unlocking the potential in the “R”Us business. While our overall performance improvement has been slower than we had hoped, caused, in some part, by circumstances that were unforeseen, we are clearly on the right track. We have developed our plans and our expense structures conservatively, and we expect that in 2002 we will generate meaningful earnings improvement and demonstrate that we are moving solidly ahead to a stronger, brighter future for our shareholders.
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