A six-month-long inventory clear-out helped to widen Q2 losses for Wayne, New Jersey-based retailer Toys ‘R’ Us. For the second quarter, the company posted a net loss of US$148 million, compared to a net loss of US$113 million the year before.

Since the beginning of this year, the toy company has been working to aggressively clear its inventory in its US stores. During the quarter ended August 2, Toy ‘R’ Us completed the inventory clearance, which helps the toyco prepare for a flood of new products as the countdown begins for the critical holiday period.

On the store side, the toy giant also reported store sales were up 1.5% domestically and 2.5% internationally.

The rise in stores sales is attributed to increases in the core toy, learning and entertainment (electronics, video game hardware, software) categories in the US, and international sales were up from the addition of new stores and sales in the toy, learning and seasonal categories.

According to Toys ‘R’ Us CEO Anthony Urcelay, the company’s international business is on the rebound, after several years of market weakness. Q2 saw net sales increase in global regions, including Japan and the UK. The toyco is also continuing its expansion into China and Southeast Asia, where it says business is strong.

Consolidated net sales were US$2.4 billion, an increase of 2.7% versus the prior year.