EX-99.1 2 v132981_ex99-1.htm

 
EXHIBIT 99.1
 

   
 
Investor Relations contact:
 
Jeffrey P. Harris
 
Tel: 415-278-7933
 
investor_relations@gymboree.com
      
 
Media Relations contact:
 
Mark Mizicko
 
Tel: 415-278-7503
 
media_relations@gymboree.com
 

 
The Gymboree Corporation Reports Third Quarter 2008 Results
 
San Francisco, Calif., November 19, 2008 - 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 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 www.gymboree.com, www.janieandjack.com, and 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 Ended
 
13 Weeks Ended
 
39 Weeks Ended
 
39 Weeks 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