Toys"R"Us ANZ Limited (ASX:TOY): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Toys"R"Us ANZ Limited's (ASX:TOY) future prospects. Toys"R"Us ANZ Limited, together with its subsidiaries, engages in distribution of toys and hobbies in Australia and New Zealand. The AU$29m market-cap company announced a latest loss of AU$25m on 31 July 2022 for its most recent financial year result. Many investors are wondering about the rate at which ToysRUs ANZ will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for ToysRUs ANZ

According to the 3 industry analysts covering ToysRUs ANZ, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$200k in 2025. Therefore, the company is expected to breakeven roughly 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 105% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of ToysRUs ANZ's upcoming projects, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 29% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on ToysRUs ANZ, so if you are interested in understanding the company at a deeper level, take a look at ToysRUs ANZ's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Historical Track Record: What has ToysRUs ANZ's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ToysRUs ANZ's board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.