Economic weakness in Europe and soft video games sales hindered Toys ‘R’ Us’ second quarter 2012 net sales, which fell to US$2.6 billion, a 3.6% or US$96 million drop versus the same period a year ago.

Comparable store sales decreased 3.4% and 4.4% in the domestic and international segments, respectively, but were slightly offset by increases in net sales in new locations such as Greater China and Southeast Asia.

While the company’s learning toy category continued to sell well in Q2, with net sales growth of 3.6%, the entertainment category (which includes video game software and hardware) experienced another notable decline of 12%.

As the toyco ramps up for the important holiday season, chairman and CEO Jerry Storch said the company has continued to grow its differentiated product lines including a new feeding line of products for the Babies ‘R’ Us brand and the upcoming launch of the Truly Scrumptious line by Heidi Klum.

The company also recently announced it will waive its holiday layaway fee and minimum purchase requirement until October 31.