Exhibit 99.1
The Gymboree Corporation Reports First Quarter 2004 Results
BURLINGAME, Calif., May 18 /PRNewswire-FirstCall/ -- The Gymboree
Corporation (Nasdaq: GYMB) today reported net income, before the cumulative
effect of the change in accounting principle, of $8.5 million or $0.27 per
diluted share for the first fiscal quarter ended May 1, 2004, compared to
$7.3 million or $0.24 per diluted share for the first fiscal quarter ended
May 3, 2003. The cumulative effect of the change in accounting principle
resulted in a onetime benefit of $1.2 million net of taxes, or an additional
$0.04 per diluted share, bringing total earnings for the first quarter of 2004
to $0.31 per diluted share.
Net sales from retail operations for the first fiscal quarter of 2004 were
$151.4 million, an increase of 11% compared to net sales from retail
operations of $136.1 million in the first fiscal quarter last year. Comparable
store sales for the 13-week period ended May 1, 2004, increased 6% compared to
a 2% increase in comparable store sales for the same period last year. Total
net sales, including sales from Gymboree Play & Music operations, were $154.0
million, an increase of 10% compared to total net sales of $139.5 million in
the first fiscal quarter last year.
"This was an exciting quarter for us with the opening of our first three
Janeville stores, a retail concept offering clothing and accessories for the
30-something woman," said Lisa Harper, The Gymboree Corporation's chairman and
chief executive officer. "As we develop into a multi-brand company, we're
investing in new opportunities while remaining focused on Gymboree, as
evidenced by the launch of the Gymboree(R) Visa(R) card, the introduction of a
new Gymboree store prototype and our commitment to update a large percentage
of our stores this year."
Business Outlook
The Gymboree Corporation provided updated guidance for upcoming comparable
store sales. The Company now projects that comparable store sales in May will
be in the negative mid single digits compared to the same period last year.
For the second fiscal quarter, the Company expects comparable store sales to
be in the negative low single digits.
The Company also reaffirmed its earnings guidance for the second, third
and fourth fiscal quarters and provided updated guidance for the balance of
the fiscal year: the Company expects earnings per share to be in the range of
$(0.10) to $(0.08), $0.29 to $0.31, and $0.46 to $0.48, respectively. Earnings
per diluted share for the fiscal year 2004 are now expected in the range of
$0.92 to $0.98. These estimates exclude the additional $.04 per diluted share
effect of the change in accounting principle described below.
Notice of Change in Accounting Principle
Effective February 1, 2004, The Gymboree Corporation elected to change its
method of inventory valuation from the retail method to the cost method.
Management believes the cost method is a preferable method for matching the
cost of merchandise with the revenues generated. The cumulative effect of
this accounting change on the results for the first quarter of 2004 was a
one-time benefit of $1.2 million net of income taxes, or an additional $0.04
per diluted share.
Management Presentation
The live broadcast of the discussion of first quarter 2004 earnings
results will be available to interested parties at 1:30 p.m. Pacific (4:30
p.m. Eastern) on Tuesday, May 18. 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
shortly after the broadcast through midnight EST, May 25, 2004, at
703-925-2533, pass code 386507, 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 1, 2004, the Company operated a total of 633 stores: 590 Gymboree(R)
retail stores (540 in the United States, 28 in Canada, and 22 in Europe), 40
Janie and Jack(R) retail shops and 3 Janeville(TM) stores in the United
States. The Company also operates online stores at gymboree.com and
janieandjack.com, and offers directed parent-child developmental play programs
at 526 franchised and company-operated centers in the United States and 24
other countries.
Forward-Looking Statements
The foregoing sales and earnings figures for the first fiscal quarter 2004
are un-audited and subject to quarter-end and year-end adjustment, and could
differ materially from those indicated. 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 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, 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, 2004.
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share and store data)
(Unaudited)
13 Weeks Ended
May 1, May 3,
2004 2003
Net sales:
Retail $151,381 $136,082
Play & Music 2,667 3,373
Total net sales 154,048 139,455
Cost of goods sold, including buying and
occupancy expenses (88,268) (80,634)
Gross profit 65,780 58,821
Selling, general and administrative expenses (52,700) (46,926)
Operating income 13,080 11,895
Other income/(expense) 230 (89)
Income before income taxes and cumulative
effect of change in accounting principle 13,310 11,806
Income tax expense (4,858) (4,545)
Income before cumulative effect of
change in accounting principle 8,452 7,261
Cumulative effect of change in accounting
principle, net of tax 1,227 --
Net income $9,679 $7,261
Basic per share amounts:
Income before cumulative effect of
change in accounting principle $0.28 $0.25
Cumulative effect of change in accounting
principle, net of tax 0.04 --
Net income $0.32 $0.25
Diluted per share amounts:
Income before cumulative effect of
change in accounting principle $0.27 $0.24
Cumulative effect of change in accounting
principle, net of tax 0.04 --
Net income $0.31 $0.24
Weighted average shares outstanding:
Basic 30,476 29,314
Diluted 31,348 30,609
Number of stores at end of period 633 589
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
May 1, January 31, May 3,
2004 2004 2003
Current Assets
Cash and cash equivalents $110,206 $89,553 $60,133
Accounts receivable 8,716 11,456 7,610
Merchandise inventories 67,927 73,017 50,504
Prepaid expenses and deferred taxes 10,399 5,564 11,537
Total current assets 197,248 179,590 129,784
Property and Equipment, net 121,824 112,743 104,733
Lease Rights, Deferred Taxes and
Other Assets 7,712 6,378 6,767
Total Assets $326,784 $298,711 $241,284
Current Liabilities
Accounts payable $36,193 33,356 10,252
Accrued liabilities 46,604 34,963 32,462
Total current liabilities 82,797 68,319 42,714
Long Term Liabilities
Deferred rent and other liabilities 26,808 26,644 20,734
Stockholders' Equity 217,179 203,748 177,836
Total Liabilities and Stockholders'
Equity $326,784 $298,711 $241,284
SOURCE The Gymboree Corporation
-0- 05/18/2004
/CONTACT: investors, Charles Bracher, +1-650-373-7137, or
charles_bracher@gymboree.com, or media, Jennifer Bonzagni Marshall,
+1-650-373-7637, or jennifer_bonzagni@gymboree.com, both of The Gymboree
Corporation/
/Web site: http://www.gymboree.com /
(GYMB)
CO: Gymboree Corporation
ST: California
IN: REA
SU: ERN ERP CCA