The Gymboree Corporation Reports Third Quarter 2010 Results

SAN FRANCISCO, Nov. 15, 2010 /PRNewswire-FirstCall/ -- The Gymboree Corporation (Nasdaq: GYMB) today reported earnings of $34.4 million or $1.26 per diluted share for the third fiscal quarter ended October 30, 2010.  This compares to earnings of $34.8 million or $1.15 per diluted share for the same period of the prior year.  Excluding $3.5 million of transaction-related expenses, earnings per diluted share for the third fiscal quarter was $1.33.

Net sales from retail operations for the fiscal quarter ended October 30, 2010, totaled $276.6 million, a 4% increase from $265.6 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 $280.9 million, an increase of 4% compared to total net sales of $269.1 million for the third fiscal quarter last year.  Excluding the impact of transaction-related expenses, operating margins increased to 21.4% of sales versus 21.0% in the third quarter of the prior year.

"We are pleased to continue to report higher operating margins after excluding the impact of transaction-related expenses," said Matthew McCauley, Chairman and Chief Executive Officer.  "Our strategy of leveraging existing infrastructure across a multi-brand portfolio, coupled with the strong performance of Crazy 8, has served as the catalyst for our continued margin improvement.  Looking ahead, we plan to build on our success with the Crazy 8 brand and expect to roll out an additional 80 stores in 2011."  

Management Presentation

The broadcast of the discussion of third quarter 2010 earnings results will be available to interested parties at 5:00 a.m. PT (8:00 a.m. ET) on Monday, November 15, 2010.  To listen to the broadcast over the Internet, please log on to www.gymboree.com, go to "About Us" at the bottom of the page, go to "Investors & Media" and then "Conference Calls & Webcasts."  The call will be available through midnight ET, Monday, November 22, 2010, at 800-642-1687, passcode 54962970, 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 30, 2010, the Company operated a total of 1,049 retail stores: 636 Gymboree® stores (595 in the United States, 37 in Canada, 2 in Australia and 2 in Puerto Rico), 148 Gymboree Outlet stores, 122 Janie and Jack® shops and 143 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 672 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 third fiscal quarter ended October 30, 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 November 15, 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