SAN FRANCISCO, Nov. 18 /PRNewswire-FirstCall/ -- The Gymboree Corporation (Nasdaq: GYMB) today reported earnings of $34.8 million or $1.15 per diluted share for the third fiscal quarter ended October 31, 2009. This compares to earnings of $30.9 million or $1.06 per diluted share for the same period of the prior year.

Net sales from retail operations for the fiscal quarter ended October 31, 2009, totaled $265.6 million, a 2% increase from $261.3 million in net sales from retail operations for the third fiscal quarter of the prior year. As previously reported, comparable store sales from retail operations for the third fiscal quarter decreased 4% versus the same period last year. Total net sales for the third fiscal quarter were $269.1 million, an increase of 2% compared to total net sales of $264.1 million for the third fiscal quarter last year.

"We are pleased to report stronger operating margins and earnings over the prior year, despite the current difficult retail environment," said Matthew McCauley, Chairman and Chief Executive Officer. "We continue to expect the consumer to be value-driven and we remain focused on margin optimization and tight expense management throughout the fourth quarter and beyond."

Business Outlook

For the fourth fiscal quarter of 2009, the Company expects a low to mid single digit decrease in comparable store sales versus the same period of the prior year. The Company expects earnings for the fourth fiscal quarter in the range of $0.95 to $1.03 per diluted share.

Share Repurchase Authorization

The Gymboree Corporation announced that its Board of Directors has authorized the Company to utilize up to $40 million of its cash reserves to purchase shares of the Company's outstanding common stock under a share repurchase program. Purchases under the share repurchase program may be made from time to time on the open market or in privately negotiated transactions. Depending on market conditions and other factors, purchases under this program may be commenced or suspended without prior notice at any time, or from time to time, through October 30, 2010. At current price levels, approximately 3% of the Company's outstanding shares could be repurchased under this program.

Management Presentation

The live broadcast of the discussion of third quarter 2009 earnings results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Wednesday, November 18, 2009. 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 25, 2009, at 800-642-1687, passcode 85035174, as well as archived on our Web site at the same location as the live Web cast.

About The Gymboree Corporation

The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of October 31, 2009, the Company operated a total of 951 retail stores: 630 Gymboree® stores (594 in the United States, 34 in Canada and 2 in Puerto Rico), 139 Gymboree Outlet stores, 120 Janie and Jack® shops and 62 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 628 franchised and Company-operated Gymboree Play & Music® centers in the United States and 28 other countries.

Forward-Looking Statements

The foregoing financial information for the third fiscal quarter ended October 31, 2009, 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 increasing levels of unemployment and consumer debt, volatility in the financial markets, current recessionary 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 31, 2009. These forward-looking statements reflect The Gymboree Corporation's expectations as of November 18, 2009. 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   13 Weeks   39 Weeks   39 Weeks
                                    Ended      Ended      Ended      Ended
                               October 31, November 1, October 31, November 1,
                                    2009       2008       2009       2008
                                    ----       ----       ----       ----

    Net sales:
      Retail                      $265,596   $261,296   $705,836   $703,031
      Play & Music                   3,485      2,809      9,513      8,926
                                     -----      -----      -----      -----
        Total net sales            269,081    264,105    715,349    711,957
    Cost of goods sold, including
      buying and occupancy
       expenses                   (131,973)  (129,520)  (375,484)  (360,012)
                                  --------   --------   --------   --------
        Gross profit               137,108    134,585    339,865    351,945
    Selling, general and
     administrative expenses       (80,689)   (84,377)  (229,843)  (247,269)
                                   -------    -------   --------   --------
      Operating income              56,419     50,208    110,022    104,676
    Other income, net                  159        152        668        849
                                       ---        ---        ---        ---
      Income  before income taxes   56,578     50,360    110,690    105,525
    Income tax expense             (21,823)   (19,413)   (41,966)   (41,529)
                                   -------    -------    -------    -------
      Net income                   $34,755    $30,947    $68,724    $63,996
                                   =======    =======    =======    =======

    Net income per share:
      Basic                          $1.20      $1.10      $2.40      $2.30
      Diluted                        $1.15      $1.06      $2.31      $2.20

    Weighted average
     shares outstanding:
      Basic                         28,952     28,051     28,684     27,861
      Diluted                       30,093     29,099     29,801     29,073

    Operating Data:
    Stores Open at the
     Beginning of the Period           926        835        886        786
    New Stores                          25         39         65         90
    Closed Stores                        -         (1)         -         (3)
                                       ---         --        ---         --
    Stores Open at the End
     of the Period                     951        873        951        873
                                       ===        ===        ===        ===

    Gross Store Square
     Footage                     1,866,000  1,706,000  1,866,000  1,706,000
    Merchandise Inventories
     per Square Foot                   $77        $83        $77        $83

    Supplemental Financial
     Information
        Depreciation and
         amortization               $9,285     $8,761    $27,463    $25,782
        Interest income, net           $43       $362       $464       $948
        Stock-based compensation    $4,442     $4,939    $12,793    $14,363



          CONDENSED CONSOLIDATED BALANCE SHEETS
          -------------------------------------
                     (In thousands)
                       (Unaudited)

                        October 31, January 31, November 1,
                            2009        2009        2008
                            ----        ----        ----

    Current Assets
      Cash and cash
       equivalents        $212,107    $140,472     $93,153
      Accounts
       receivable           14,500      18,735      15,793
      Merchandise
       inventories         144,559     114,972     142,042
      Prepaid income
       taxes                     -           -         804
      Prepaid
       expenses and
       deferred taxes       17,431      19,704      24,126
                            ------      ------      ------
         Total current
          assets           388,597     293,883     275,918
                           -------     -------     -------

    Property and
     Equipment, net        208,627     204,227     206,630
    Deferred Taxes
     and Other Assets       20,130      22,471      18,078
                            ------      ------      ------


      Total Assets        $617,354    $520,581    $500,626
                          ========    ========    ========

    Current Liabilities
      Accounts payable     $47,409     $44,400     $59,941
      Income tax
       payable               3,559         102           -
      Accrued
       liabilities          64,975      69,341      70,266
                            ------      ------      ------
         Total current
          liabilities      115,943     113,843     130,207
                           -------     -------     -------

    Long-Term Liabilities
      Lease
       incentives and
       other
       liabilities          75,423      72,463      70,272

    Stockholders'
     Equity                425,988     334,275     300,147
                           -------     -------     -------

      Total
       Liabilities and
       Stockholders'
       Equity             $617,354    $520,581    $500,626
                          ========    ========    ========

SOURCE The Gymboree Corporation

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RELATED LINKS
http://www.gymboree.com
http://www.janieandjack.com
http://www.crazy8.com