EXHIBIT 99.1
| | Investor Relations contact: Jeffrey P. Harris Tel: 415-278-7933 investor_relations@gymboree.com
Media Relations contact: Jamie Falkowski Tel: 415-278-7942 media_relations@gymboree.com |
The Gymboree Corporation Reports First Quarter 2008 Results
San Francisco, Calif., May 21, 2008 - The Gymboree Corporation (NASDAQ: GYMB) today reported earnings of $25.0 million or $0.86 per diluted share for the first fiscal quarter ended May 3, 2008. This compares to earnings of $20.9 million or $0.67 per diluted share for the same period of the prior year.
“I am very pleased with our financial performance in the first quarter,” said Matthew McCauley, Chairman and Chief Executive Officer. “Despite the challenging retail environment, we were able to deliver close to a 30% increase in earnings per share. Looking forward, we are not anticipating the macro-environment to change significantly and we are continuing to focus on our strategies of acquiring new customers, expanding our store base and controlling expenses to grow earnings.”
Net sales from retail operations for the fiscal quarter ended May 3, 2008, totaled $238.9 million, a 16% increase over the $206.7 million in net sales from retail operations for the first fiscal quarter of the prior year. As previously reported, comparable store sales from retail operations for the first fiscal quarter increased 4% over the same period last year. Total net sales for the first fiscal quarter were $242.1 million, an increase of 16% compared to total net sales of $209.3 million for the first fiscal quarter last year.
Business Outlook
For the second fiscal quarter of 2008, the Company expects a low single digit comparable store sales increase over the same period of the prior year. The Company continues to expect earnings for the second fiscal quarter in the range of $0.18 to $0.20 per diluted share. For the full fiscal year 2008, the Company expects net income to be in the range of $3.10 to $3.15 per diluted share.
The live broadcast of the discussion of first quarter 2008 earnings results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Wednesday, May 21, 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, May 28, 2008, at 800-642-1687, passcode 32812217, 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 May 3, 2008, the Company operated a total of 811 retail stores: 604 Gymboree® stores (574 in the United States and 30 in Canada), 96 Gymboree Outlet stores, 95 Janie and Jack® shops and 16 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 588 franchised and Company-operated centers in the United States and 29 other countries.
Forward-Looking Statements
The foregoing financial information for the first fiscal quarter ended May 3, 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 May 21, 2008. The Gymboree Corporation undertakes no obligation to update the information provided herein.
Gymboree and Janie and Jack are registered trademarks of The Gymboree Corporation. Crazy 8 is a trademark of The Gymboree Corporation.
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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 | |
| | | May 3, | | May 5, | |
| | | 2008 | | 2007 | |
| Net sales: | | | | | |
Retail | | $ | 238,917 | | $ | 206,721 | |
Play & Music | | | 3,187 | | | 2,579 | |
Total net sales | | | 242,104 | | | 209,300 | |
| Cost of goods sold, including | | | | | | | |
| buying and occupancy expenses | | | (118,686 | ) | | (105,500 | ) |
Gross profit | | | 123,418 | | | 103,800 | |
| Selling, general and administrative expenses | | | (81,825 | ) | | (70,193 | ) |
Operating income | | | 41,593 | | | 33,607 | |
| Other income | | | 280 | | | 1,118 | |
Income before income taxes | | | 41,873 | | | 34,725 | |
| Income tax expense | | | (16,836 | ) | | (13,870 | ) |
Net income | | $ | 25,037 | | $ | 20,855 | |
| | | | | | | | |
| Net income per share: | | | | | | | |
Basic | | $ | 0.91 | | $ | 0.70 | |
Diluted | | $ | 0.86 | | $ | 0.67 | |
| | | | | | | | |
| Weighted average shares outstanding: | | | | | | | |
Basic | | | 27,543 | | | 29,996 | |
Diluted | | | 28,953 | | | 31,263 | |
| | | | | | | | |
Operating Data: | | | | | | | |
| Stores Open at the Beginning of the Period | | | 786 | | | 698 | |
| New Stores | | | 25 | | | 25 | |
| Closed Stores | | | - | | | (3 | ) |
| Stores Open at the End of the Period | | | 811 | | | 720 | |
| | | | | | | | |
| Gross Store Square Footage | | | 1,570,000 | | | 1,364,000 | |
| Merchandise Inventories per Square Foot | | $ | 61 | | $ | 62 | |
| | | | | | | | |
Supplemental Financial Information | | | | | | | |
| Depreciation and amortization | | $ | 8,405 | | $ | 7,194 | |
| Interest income, net | | $ | 237 | | $ | 1,094 | |
| Stock-based compensation | | $ | 4,510 | | $ | 2,678 | |
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| | | May 3, | | February 2, | | May 5, | |
| | | 2008 | | 2008 | | 2007 | |
Current Assets | | | | | | | |
Cash and cash equivalents | | $ | 58,052 | | $ | 33,313 | | $ | 27,797 | |
Marketable securities | | | - | | | - | | | 66,475 | |
Accounts receivable | | | 22,840 | | | 12,640 | | | 21,997 | |
Merchandise inventories | | | 95,557 | | | 119,523 | | | 84,975 | |
Prepaid expenses and deferred taxes | | | 24,321 | | | 23,748 | | | 19,569 | |
Total current assets | | | 200,770 | | | 189,224 | | | 220,813 | |
| | | | | | | | | | | |
Property and Equipment, net | | | 191,669 | | | 185,357 | | | 165,465 | |
Lease Rights, Deferred Taxes and Other Assets | | | 22,189 | | | 22,603 | | | 14,733 | |
| | | | | | | | | | | |
Total Assets | | $ | 414,628 | | $ | 397,184 | | $ | 401,011 | |
| | | | | | | | | | | |
Current Liabilities | | | | | | | | | | |
Accounts payable | | $ | 30,286 | | $ | 52,915 | | $ | 29,360 | |
Accrued liabilities | | | 66,587 | | | 70,282 | | | 79,908 | |
Income tax payable | | | 8,273 | | | 7,989 | | | 7,803 | |
Total current liabilities | | | 105,146 | | | 131,186 | | | 117,071 | |
| | | | | | | | | | | |
Long Term Liabilities | | | | | | | | | | |
Deferred rent and other liabilities | | | 66,615 | | | 57,703 | | | 60,120 | |
| | | | | | | | | | | |
Stockholders' Equity | | | 242,867 | | | 208,295 | | | 223,820 | |
| | | | | | | | | | | |
Total Liabilities and Stockholders' Equity | | $ | 414,628 | | $ | 397,184 | | $ | 401,011 | |
