Friday, March 26, 2010

TRU on the rise

Nothing but happy news coming out of the Toys-R-Us headquarters today.

Earnings for the 4th Quarter of 2009 were up 12% but up 43% for the entire year. On top of this, TRU was clearly carving market share out from both Wal-Mart and Target. Each lost at least a point of market share in the toy category although we would guess in specific categories the loss for each was greater in the 4th quarter. (We know for a fact that Target lost market share in the Boys Action category last year.) TRU was much more aggressive in marketing themselves during the Holidays than Target was. And unlike Target's team, TRU is likely to be just as aggressive again this fall and apply lessons learned from the past year.

Based on the details of this week's report for TRU, many analysts are high on the company's future. In fact, it's reported that TRU is very likely to finally go public with an IPO offering at some point later this year. Probably late in the second quarter to maximize the positive performance in 2009, while the toy industry is on the upswing in 2010 and before holiday competition heats up in the fall again.

Read all the juicy details of the TRU financial report here.

As we've observed before, this has been an amazing turnaround for a retailer who was on the ropes three years ago. It also remains a fact that a healthy Toys-R-Us means a healthy toy industry as a whole. It will once again be very interesting to see how the big retailers compete again in the Holiday shopping season of 2010. Hopefully, they will all get over the fear of inventory and start keeping them pegs stocked up again and keep assortment turnover rolling once more.

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