The Gymboree Corporation Reports Second Quarter 2010 Results

SAN FRANCISCO, Aug. 18 /PRNewswire-FirstCall/ -- 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 fiscal quarter 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.

SOURCE The Gymboree Corporation