8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

August 18, 2010

Date of Report (Date of earliest

event reported)

THE GYMBOREE CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-21250	94-2615258
(State or Other Jurisdiction	(Commission File No.)	(IRS Employer
of Incorporation)		Identification No.)

500 Howard Street, San Francisco, CA	94105
(Address of principal executive offices)	(Zip Code)

 (415) 278-7000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02              Results of Operations and Financial Condition.

On August 18, 2010, The Gymboree Corporation issued an earnings release announcing its financial results for the second fiscal quarter ended July 31, 2010.  A copy of the press release is attached hereto as Exhibit 99.1.  The press release should be read in conjunction with the note regarding forward-looking statements, which is included in the text of the press release.

Item 9.01              Financial Statements and Exhibits.

              (d) Exhibits.

Exhibit No.	Description
99.1	Earnings release of The Gymboree Corporation issued August 18, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE GYMBOREE CORPORATION
Dated:  August 18, 2010	By:	/s/ JEFFREY P. HARRIS
		Name:  Jeffrey P. Harris
		Title:   Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings release of The Gymboree Corporation issued August 18, 2010.

EX-99.1

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 Second Quarter 2010 Results

San Francisco, Calif., August 18, 2010 – The Gymboree Corporation (NASDAQ: GYMB) today reported earnings of $12.3 million or $0.44 per diluted share for the second fiscal quarter ended July 31, 2010.  This compares to earnings of $12.2 million or $0.41 per diluted share for the same period of the prior year.

Net sales from retail operations for the second quarter totaled $219.3 million, a 3% increase from $212.3 million in net sales from retail operations for the second fiscal quarter of the prior year.  As previously reported, comparable store sales from retail operations for the second fiscal quarter decreased 3% versus the same period last year.  Total net sales for the second fiscalquarter were $222.7 million, a 3% increase compared to total net sales of $215.4 million for the second fiscal quarter last year.

Gross profit for the second fiscal quarter was 43.5% of sales, an improvement of over 20 basis points compared to the prior year rate of 43.3%.  Selling, General and Administrative (SG&A) expenses were $77.9 million for the second fiscal quarter compared to $75.8 million for the same fiscal quarter of the prior year.  SG&A expenses as a percentage of sales were 35.0% versus 35.2% for the second quarter of the prior year.  Operating income increased to $19.0 million or 8.5% of sales compared to $17.4 million or 8.1% of sales for the comparable fiscal quarter of the prior year.

Business Outlook

For the third fiscal quarter of 2010, the Company expects comparable store sales performance to be slightly negative to flat versus the same period of the prior year.  The Company expects earnings for the third fiscal quarter in the range of $1.25 to $1.30 per diluted share.

Management Presentation

The live broadcast of the discussion of second quarter 2010 earnings results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Wednesday, August 18, 2010.  To listen to the live broadcast over the Internet, please log on to www.gymboree.com, go to “About Us” at the bottom of the home page, go to “Investors & Media” and then “Conference Calls & Webcasts.”  A replay of the call will be available two hours after the broadcast through midnight ET, Wednesday, August 25, 2010, at 800-642-1687, passcode # 54962795, as well as archived on our website at the same location as the live webcast.

About The Gymboree Corporation

The Gymboree Corporation’s specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of July 31, 2010, the Company operated a total of 1,019 retail stores: 633 Gymboree® stores (594 in the United States, 35 in Canada, 2 in Puerto Rico and 2 in Australia), 147 Gymboree Outlet stores, 120 Janie and Jack® shops and 119 Crazy 8® stores in the United States. The Company also operates online stores at www.gymboree.com, www.janieandjack.com and www.crazy8.com, and offers directed parent-child developmental play programs at 678 franchised and Company-operated Gymboree Play & Music® centers in the United States and 33 other countries.

Forward-Looking Statements

The foregoing financial information for the second fiscal quarter ended July 31, 2010, is unaudited and subject to quarter-end and year-end adjustment. The foregoing paragraphs contain forward-looking statements relating to The Gymboree Corporation’s 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 vary materially as a result of a number of factors, including high levels of unemployment and consumer debt, volatility in the financial markets, general economic conditions, 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, 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 January 30, 2010. These forward-looking statements reflect The Gymboree Corporation’s expectations as of August 18, 2010. The Gymboree Corporation undertakes no obligation to update the information provided herein.

Gymboree, Janie and Jack, Crazy 8, and Gymboree Play & Music are registered trademarks of The Gymboree Corporation.

###

EXHIBIT A

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share and operating data)

(Unaudited)

	13 Weeks Ended			13 Weeks Ended			26 Weeks Ended			26 Weeks Ended
	July 31,			August 1,			July 31,			August 1,
	2010			2009			2010			2009
Net sales:
Retail	$	219,293		$	212,262		$	469,284		$	440,241
Play & Music and other		3,456			3,132			6,290			6,028
Total net sales		222,749			215,394			475,574			446,269
Cost of goods sold, including buying and occupancy expenses		(125,853	)		(122,166	)		(248,504	)		(243,512	)
Gross profit		96,896			93,228			227,070			202,757
Selling, general and administrative expenses		(77,897	)		(75,809	)		(159,412	)		(149,154	)
Operating income		18,999			17,419			67,658			53,603
Other income		103			201			132			509
Income  before income taxes		19,102			17,620			67,790			54,112
Income tax expense		(6,848	)		(5,459	)		(26,350	)		(20,143	)
Net income	$	12,254		$	12,161		$	41,440		$	33,969
Net income per share:
Basic	$	0.45		$	0.42		$	1.49		$	1.19
Diluted	$	0.44		$	0.41		$	1.44		$	1.15
Weighted average shares outstanding:
Basic		27,170			28,654			27,873			28,551
Diluted		28,009			29,854			28,759			29,655
Operating Data:
Stores Open at the Beginning of the Period		987			901			953			886
New Stores		34			25			69			40
Closed Stores		(2	)		-			(3	)		-
Stores Open at the End of the Period		1,019			926			1,019			926
Gross Store Square Footage		2,033,000			1,818,000			2,033,000			1,818,000
Merchandise Inventories per Square Foot	$	72		$	71		$	72		$	71
Supplemental Financial Information:
Depreciation and amortization	$	9,958		$	9,195		$	19,544		$	18,177
Interest income, net	$	44		$	174		$	45		$	421
Stock-based compensation	$	3,977		$	4,478		$	8,538		$	8,351

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	July 31,		January 30,		August 1,
	2010		2010		2009
Current Assets
Cash and cash equivalents	$	132,416	$	257,672	$	164,745
Accounts receivable		19,070		9,911		16,553
Merchandise inventories		145,501		121,133		129,293
Prepaid income taxes		20,733		-		12,487
Prepaid expenses and deferred taxes		19,495		19,778		28,517
Total current assets		337,215		408,494		351,595
Property and Equipment, net		217,819		205,461		209,961
Deferred Taxes and Other Assets		21,483		22,175		20,818
Total Assets	$	576,517	$	636,130	$	582,374
Current Liabilities
Accounts payable	$	43,381	$	46,470	$	55,650
Accrued liabilities		74,063		69,295		70,528
Income tax payable		-		5,381		-
Total current liabilities		117,444		121,146		126,178
Long Term Liabilities
Lease incentives and other liabilities		78,889		76,231		76,504
Stockholders' Equity		380,184		438,753		379,692
Total Liabilities and Stockholders' Equity	$	576,517	$	636,130	$	582,374