• Recapitalisation Plan underway
• Product Margins remain Strong
• Expanding Channels to Market
• Operational Discipline Maintained

Toys'R'US ANZ Limited (ASX:TOY) presented its Quarterly Activities Report and Appendix 4C for the period ending 30 April 2025. The key activities included a Recapitalisation Plan, strong Product Margins, Expanding Channels to Market, and Operational Discipline. The Company is working with its primary debt holder to finalise a recapitalisation plan that will provide sufficient capital to fund ongoing operations and enable financially sustainable operations. Despite sales being significantly constrained by inventory limitations, the Company achieved sales revenues of $863,000 compared to $779,000 for the same quarter last year, with gross profit more than double. Product margins remained strong across all brands, with an average margin of 39% for the quarter, an increase of 17 percentage points. The Company expanded its drop-shipping channel, now promoting over 1,100 SKUs, and commenced reengaging the wholesale channel. Significant overhead reductions and a disciplined approach have been maintained, with targeted paid media campaigns driving a 137% increase in return on advertising spend. Customer Satisfaction scores continue to exceed expectations, with a growing base of over 1.5 million loyal customers.

The Company expects operating cashflows to continue improving in the next quarter due to strategic initiatives, including improving gross profit margin, right-sizing inventory and overheads, and other corporate actions. The Company has a $5 million funding agreement with Mercer Street Global Opportunity Fund II LP, with $1.215 million undrawn, and is working on a recapitalisation plan to fund operations, which is expected to be successful.