- Published: 20 November 2008
- Written by Editor
The Gymboree Corporation Reports Third Quarter 2008 Results
The Gymboree Corporation (Nasdaq: GYMB) today reported earnings for the third fiscal quarter ended November 1, 2008, of $30.9 million or $1.06 per diluted share. This compares to earnings of $26.9 million or $0.91 per diluted share for the same period of the prior year.
Net sales from retail operations for the fiscal quarter ended November 1, 2008, totaled $261.3 million, a 6% increase over the $247.6 million in net sales from retail operations for the third fiscal quarter of the prior year. As previously reported, comparable store sales for the third fiscal quarter decreased 2% over the same period last year. Total net sales for the third fiscal quarter were $264.1 million, compared to total net sales of $250.7 million for the same fiscal quarter last year.
"We are extremely pleased to report a 16% increase in earnings per share in the face of a difficult retail environment," said Matthew McCauley, Chairman and Chief Executive Officer. "And while we are proud of this accomplishment, we anticipate the upcoming holiday season and following year to be more challenging given an expected pullback in consumer spending."
Business Outlook
For the fourth fiscal quarter, the Company expects comparable store sales to decrease in the range of mid-single digits over the same period of the prior year. The Company expects earnings for the fourth fiscal quarter to be in the range of $0.92 to $1.00 per diluted share. For the full fiscal year 2008, the Company expects net income to be in the range of $3.12 to $3.20 per diluted share.
Management Presentations
The live broadcast of the discussion of third quarter 2008 financial results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Wednesday, November 19, 2008. To listen to the live broadcast over the internet, please log on to http://www.gymboree.com, click on "Our Company" at the bottom of the page, go to "Investor and Media Relations" and then "Conference Calls, Webcasts & Presentations." A replay of the call will be available two hours after the broadcast through midnight ET, Wednesday, November 26, 2008, at 800-642-1687, Passcode 32949127.
Gymboree reports same store sales results on a quarterly basis and provides a business update at the end of each month. The next monthly business updates will be available on Thursday, December 4, 2008, January 8, 2009, and February 5, 2009, respectively. Please listen to our monthly business update by calling the Company's Investor Relations Hotline at 415-278-7933. Each monthly recording will be available through Wednesday of the following week after initial release.
About The Gymboree Corporation
The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of November 1, 2008, the Company operated a total of 873 retail stores: 614 Gymboree® stores (585 in the United States and 29 in Canada), 112 Gymboree Outlet stores, 110 Janie and Jack® shops and 37 Crazy 8® stores in the United States. The Company also operates online stores at http://www.gymboree.com, http://www.janieandjack.com, and http://www.crazy8.com. The Company also offers directed parent-child developmental play programs at 597 franchised and Company-operated centers in the United States and 30 other countries.
Forward-Looking Statements
The foregoing financial information for the third fiscal quarter ended November 1, 2008, is un-audited and subject to quarter-end and year-end adjustment, and could differ materially from the financial information indicated. The foregoing paragraphs contain forward-looking statements relating to anticipated sales growth and future financial performance. These are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially as a result of a number of factors, including customer reactions to new merchandise, service levels and new concepts, success in meeting our delivery targets, the level of our promotional activity, our gross margin achievement, our ability to appropriately manage inventory, general economic conditions, effects of future embargos from countries used to source product, and competitive market conditions. Other factors that may cause actual results to differ materially include those set forth in the reports that we file from time to time with the Securities and Exchange Commission, including our annual report on Form 10-K for the year-ended February 2, 2008. These forward-looking statements reflect The Gymboree Corporation's expectations as of November 19, 2008. The Gymboree Corporation undertakes no obligation to update the information provided herein.
Gymboree, Janie and Jack and Crazy 8 are registered trademarks of The Gymboree Corporation.
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share and operating data)
(Unaudited)
13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
November 1, November 3, November 1, November 3,
2008 2007 2008 2007
Net sales:
Retail $261,296 $247,569 $703,031 $634,145
Play & Music 2,809 3,163 8,926 8,242
Total net sales 264,105 250,732 711,957 642,387
Cost of goods sold,
including buying
and occupancy
expenses (129,520) (126,020) (360,012) (333,661)
Gross profit 134,585 124,712 351,945 308,726
Selling, general and
administrative expenses (84,377) (80,314) (247,269) (222,244)
Operating income 50,208 44,398 104,676 86,482
Other income 152 691 849 2,446
Income before income
taxes 50,360 45,089 105,525 88,928
Income tax expense (19,413) (18,194) (41,529) (35,376)
Net income $30,947 $26,895 $63,996 $53,552
Net income per share:
Basic $1.10 $0.94 $2.30 $1.83
Diluted $1.06 $0.91 $2.20 $1.76
Weighted average shares
outstanding:
Basic 28,051 28,565 27,861 29,294
Diluted 29,099 29,621 29,073 30,438
Operating Data:
Stores Open at the
Beginning
of the Period 835 739 786 698
New Stores 39 34 90 79
Closed Stores (1) - (3) (4)
Stores Open at the End
of the Period 873 773 873 773
Gross Store Square
Footage 1,706,000 1,489,000 1,706,000 1,489,000
Merchandise Inventories
per Square Foot $83 $88 $83 $88
Supplemental Financial
Information
Depreciation and
amortization $8,761 $7,982 $25,782 $22,686
Interest income, net $362 $351 $948 $2,093
Stock-based
compensation $4,939 $3,167 $14,363 $8,805
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
November 1, February 2, November 3,
2008 2008 2007
Current Assets
Cash and cash equivalents $93,153 $33,313 $24,096
Accounts receivable 15,793 12,640 19,403
Merchandise inventories 142,042 119,523 130,520
Prepaid income taxes 804 - -
Prepaid expenses and deferred
taxes 24,126 23,748 21,993
Total current assets 275,918 189,224 196,012
Property and Equipment, net 206,630 185,357 186,680
Deferred Taxes and Other Assets 18,078 22,603 14,750
Total Assets $500,626 $397,184 $397,442
Current Liabilities
Accounts payable $59,941 $52,915 $62,974
Accrued liabilities 70,266 70,282 75,078
Income tax payable - 7,989 1,641
Total current liabilities 130,207 131,186 139,693
Long Term Liabilities
Deferred rent and other
liabilities 70,272 57,703 61,242
Stockholders' Equity 300,147 208,295 196,507
Total Liabilities and
Stockholders' Equity $500,626 $397,184 $397,442
