A continued slope in domestic and foreign sales has contributed to mega retailer Toys ‘R’ Us’ decision to withdraw its proposed initial public offering. The move comes amid the company’s latest financial report that saw fourth-quarter holiday sales fall roughly 3% to US$5.8 billion.

Profits for the quarter were US$239 million, compared to US$343 million in the prior year. Full-year sales totaled US$13.5 billion, a dip from US$13.9 billion in 2011, and earnings came in at US$38 million, compared to US$149 million in the prior year. Contributing to this profit decline was an income tax expense of US$53 million compared to a US$1 million benefit in 2011.

Domestically, quarterly sales of US$3.5 billion decreased by 2.1% versus the prior year, driven by a comparable store net sales decline of 4.5%.  The Entertainment category, which includes electronics, video game hardware and software, continued to be the weakest link, with net sales declining 11.1%, while the Juvenile and Learning categories generated net sales growth of 2.6% and 1.4%, respectively.

Globally, quarterly sales of US$2.3 billion decreased by 3.4% versus the prior year driven by a comparable store net sales decline of 5.4%.

The company says it will continue to expand its global reach, opening 55 new standalone stores, and will continue to focus efforts on China and Southeast Asia.

Toys ‘R’ Us announced its IPO plans in May 2010. Since then, the company has sustained financial losses and its CEO, Gerald Storch, announced his resignation earlier this year.