While a planned decrease in promotional activity and weaker sales for its baby and entertainment categories saw Toys ‘R’ Us sales in the US drop by 2.3%, the Wayne, New Jersey-based retailer still narrowed its net loss for the first quarter.

For the period ended May 2, TRU posted a net loss of US$140 million, as opposed to US$196 million in the year prior. Net sales were US$2.33 billion – a decrease of US$154 million from Q1 2014.

While domestic sales were down 2.3%, international store sales were up 1.2%, driven by higher sales in the learning and core toy categories, despite decreases in the entertainment category (electronics, video game hardware and software).

Adjusted EBITDA was US$70 million, compared to US$27 million in the prior year period. That US$43 million jump, as well as an improvement in US operating earnings of US$40 million to US$61 million, signal the company’s TRU Transformation strategy is working, according to CEO and chairman Antonio Urcelay.

Just last week, Toys ‘R’ Us announced that long-time leader Urcelay would be retiring, to be succeeded by former Domino’s Pizza chairman/CEO David Brandon. Brandon will assume his new role at TRU on July 1.