Toy sales dipped 1.4% during the crucial holiday sales period at struggling Toys “R” Us, which saw tiny decreases in America, internationally, and in Internet revenues, but may have gained some market share because of price discounts and selection.

The nation’s no. 2 toy retailer, which has been struggling against discounters such as no. 1 toy seller, Wal-Mart Stores, said Thursday it won’t immediately discuss whether it will pursue splitting its global toy business from its Babies “R” Us chain, which sells baby furniture, clothes, and accessories.

Wayne, N.J.-based Toys “R” Us had said in August that it would separate the two businesses in the first half of 2005. On Thursday, the company’s chief executive officer, John Eyler, said he expects a strategic review to be finished in the first half of the year, after which the company’s board of directors will decide what steps to take.

“The strategic review is designed to ensure that, irrespective of ownership, our business model is one to ensure viability,” Mr. Eyler told analysts during a conference call.

The company said American, international, and Toysrus.com sales for the nine-week period ended January 1 totaled $3.89 billion, down from $3.95 billion in the year-ago holiday period. Including a boost from favorable currency exchange rates, global toy sales for the 2004 holiday season totaled $3.99 billion.

“On a relative basis, they did pretty well,” said toy and retail analyst Sean McGowan, a managing director at Harris Nesbitt. “I think they did better than Wal-Mart and Target. They certainly did better than they had in the past.”

He said Toys “R” Us’s performance didn’t differ enough from expectations to have an impact on bid prices if the company’s parts are broken up, as he expects they will be.

Mr. McGowan said lower prices, new advertising themes, better-looking stores, and management changes all added up to help Toys “R” Us, but comparable American toy-store sales – sales at stores open at least one year – were still down 2.2%.

“While that’s better than I think other stores did,” Mr. McGowan said, “it’s not up.”

Total net sales, including higher revenues from Babies “R” Us, slipped 0.9% to $4.29 billion for the nine weeks ended January 1, 2005, compared with $4.33 billion for the nine weeks that ended January 3, 2004.

“We view this holiday season as a successful one, given the environment that we’re operating in,” Mr. Eyler said.

He said the industry estimates that sales of traditional toys declined by about 5% in 2004.

The video game business struggled because of a shortage of game systems such as PlayStation 2, Mr. McGowan said.

Early information from the company’s toy makers and other vendors, meanwhile, indicates that Toys “R” Us may have slightly increased its market share, the company said.

For the nine weeks ended January 1, Toys “R” Us said comparable international store sales were down 0.7%, and sales for the Toysrus.com division fell 3.3%.

Mr. Eyler said he hoped the just-completed holiday season was the end of a several-year downturn in toy sales, noting that retailers battled particularly hard on price this time.

“We were very price competitive, often being cited as having lower prices” than rivals, he said.

Mr. Eyler also said the company did a better job than its competitors of keeping hot toys in stock.

Those products included Hokey Pokey Elmo, various learning software, Dora the Explorer products such as a bilingual talking dollhouse, and Hasbro’s portable player for miniature DVDs of kids’ TV shows.

Mr. McGowan noted that Toys “R” Us had Hokey Pokey Elmo exclusively this year and did better than in past years in getting other popular toys exclusively.

Another bright spot was the Babies “R” Us division, which posted an increase of nearly 8% in net sales over the nine weeks to $295 million from $274 million.

But the company’s closure of all 146 Kids “R” Us clothing and accessories stores, nearly all of which have been sold, reduced holiday season sales by $102 million, or slightly more than 2%.

Mr. Eyler said the company had reduced U.S. toy store inventory by about 20% through clearance sales on discontinued and older products, and that it had a strong balance sheet and good liquidity.

Toys “R” Us shares rose 8 cents, or 0.4%, to close at $20.50 Thursday on the New York Stock Exchange.