Exhibit 99.1
THE GYMBOREE CORPORATION REPORTS JANUARY, FOURTH QUARTER AND YEAR-END SALES
AND PROVIDES GUIDANCE FOR FISCAL 2005
SAN FRANCISCO, Feb. 3 /PRNewswire-FirstCall/ -- The Gymboree Corporation
(Nasdaq: GYMB) reported net sales from continuing retail operations for the
four-week period ended January 29, 2005 of $48.5 million, an increase of 16%
compared to net sales from continuing retail operations of $41.9 million for the
same four-week period last year. Comparable store sales for the four-week period
increased 10%, compared to an increase of 3% during the same period last year.
For the fourth fiscal quarter ended January 29, 2005, net sales from
continuing operations were $172.7 million, an increase of 5% compared to the
$164.0 million in net sales from continuing operations reported for the same
period last year. Comparable store sales for the quarter were flat compared to
sales reported during the fourth fiscal quarter last year.
Net sales from continuing retail operations for the 52 weeks ended January
29, 2005 were $583.2 million, an increase of 8% compared to net sales from
continuing retail operations of $537.6 million for the same period last year.
Comparable store sales from continuing retail operations for the 52-week period
increased 2% over net sales reported for the same period last year.
"While we are pleased with our fourth quarter merchandise margin
performance, we are disappointed that earnings were negatively impacted by
unfavorable expense variances. These include year-end shrink results that were
higher than anticipated, increased costs at our distribution center, and higher
fees related to Sarbanes-Oxley compliance," said Lisa Harper, The Gymboree
Corporation's chairman and chief executive officer. "We are moving aggressively
to manage costs and today announced a management reorganization that will reduce
our ongoing expenses."
The Gymboree Corporation now projects earnings per diluted share from
continuing operations for the fourth fiscal quarter 2004 to be in the range of
$0.18 to $0.20, excluding non-cash charges of approximately $4.4 million related
to the Company's move to its new San Francisco headquarters. The Company now
expects earnings from continuing operations for the full fiscal year 2004 to be
in the range of $0.52 to $0.54 per diluted share, excluding both the income tax
benefit recognized in the third quarter and the expected non-cash charge in the
current quarter. Net loss from discontinued operations for the fourth fiscal
quarter resulting from the closure of the Company's United Kingdom and Ireland
retail operations is expected to be in the range of ($0.14) to ($0.16) related
to the remaining U.K. lease disposition costs, asset write-offs and severance
charges. The Company will report fourth quarter and year-end earnings results
after market close on March 10, 2005.
For the full fiscal year 2005, the Company expects its earnings from
continuing operations to be in the range of $0.40 to $0.50 per diluted share.
For the first quarter of fiscal 2005, the Company expects comparable store sales
to be roughly flat to the prior year and earnings from continuing operations to
be in the range of $0.11 to $0.14 per diluted share, which includes
approximately $550,000 for severance charges related to the management
restructuring announced today.
Note that earnings guidance for 2005 does not include the effect of new
accounting rules requiring the expensing of stock options. The Financial
Accounting Standards Board (FASB) has recently reissued FASB Statement No. 123
"Share-Based Payment," which covers a wide range of share-based compensation
arrangements, including stock options. The Company plans to initiate the
expensing of stock options effective July 31, 2005, in accordance with the
requirements of FASB Statement No. 123 and will provide the estimated impact of
this change in accounting treatment on earnings guidance by Gymboree's Second
Quarter 2005 earnings conference call.
Management Presentations
For more information about January sales, as well as guidance for fiscal
2005, please listen to The Gymboree Corporation's monthly sales recording by
calling its Investor Relations Hotline at 415-278-7933. The recording will be
available Thursday, February 3, 2005 at 7:55 a.m. Eastern Time through Thursday,
February 10 at 11:59 p.m. Pacific Time.
About The Gymboree Corporation
The Gymboree Corporation's specialty retail brands offer unique,
high-quality products delivered with personalized customer service. As of
January 29, 2005, the Company operated a total of 648 stores: 579 Gymboree(R)
retail stores (551 in the United States and 28 in Canada), 55 Janie and Jack(R)
retail shops and 14 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 528 franchised and company-operated
centers in the United States and 26 countries.
Forward-Looking Statements
The foregoing sales figures for the four-week, quarter and 52-week periods
ended January 29, 2005 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,
unanticipated costs actually incurred in connection with the management
restructuring and severance, the wind down of our UK and Ireland operations, 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.
These forward-looking statements reflect The Gymboree Corporation's expectations
as of February 3, 2005. The Gymboree Corporation undertakes no obligation to
update the information provided herein.
NOTE: Gymboree and Janie and Jack are registered trademarks of The Gymboree
Corporation. Janeville is a trademark of The Gymboree Corporation.
SOURCE The Gymboree Corporation
-0- 02/03/2005
/CONTACT: investors, Charles Bracher, +1-415-278-7137, or
investor_relations@gymboree.com, or media, Jaclyn Schatzow, +1-415-278-7472,
or media_relations@gymboree.com, both of The Gymboree Corporation/
/Web site: http://www.gymboree.com /
(GYMB)