... improved traditional toy market appears to have lifted holiday 2015 sales, with Toys `R' Us, Inc. (Toys or HoldCo) reporting positive 2% consolidated same-store sales for November/December, the first positive same- store sales in more than five years. However, competitive intensity -- including channel shifts to discount and e-commerce formats, secular issues given low birth rates in developed markets and digitalization of gaming products -- is still expected to pressure Toys' top line. Fitch Ratings expects same-store sales to remain flat to modestly negative over the medium term. Near-Term EBITDA Improvement: Barring material discounting activity in fourth-quarter 2015, Fitch expects EBITDA to improve to approximately $750 million in 2015, with the potential to cross $800 million in 2017, assuming relatively flat gross margin and modest reduction in selling, general and administrative (SG&A) expense. Fitch assumes Toys needs to invest further...
