The second largest toy retailer in the US, Toys R Us, has reported a bigger than expected first quarter loss, after a major store refurbishment programme hit sales.

However, online sales at the company's Toysrus.com site have more than tripled to $29m versus $8m in the previous year thanks to an alliance with Amazon.com.

Despite $18m in losses for the quarter, compared with a profit of $215m a year ago, the company has moved to reassure investors that its current profit estimates for the full year are achievable.

"We are confident that the improvements being made will deliver substantial benefits to Toys R Us by this year's more important holiday season," said John Eyler, president and chief executive of Toys R Us.

Toys R Us said sales for the first-quarter rose to $2.1bn from $2bn a year ago.

Clicks and mortar

The company said the disruption from the refit of 250 US stores resulted in a 2% decrease in comparable sales - for stores open at least a year.

"In line with the plans we previously described, the investments we are making throughout our business will negatively affect our financial performance during the first three lower revenue quarters of the year," said Mr Eyler.

The company also said it would migrate its Babiesrus.com business to Amazon later this month after the success of its existing alliance.

It expects to make some savings from maintaining and operating the site.