EXHIBIT 99.1
INVESTOR RELATIONS CONTACT:
Blair W. Lambert
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 SEPTEMBER SALES
ANNOUNCES PLANNED CLOSURE OF JANEVILLE
San Francisco, Calif., October 5, 2006 - The Gymboree Corporation (NASDAQ: GYMB)
reported net sales from retail operations for the five-week period ended
September 30, 2006 of $84.1 million, an increase of 25% compared to net sales
from retail operations of $67.3 million for the same five-week period last year.
Comparable store sales for the five-week period increased 20% compared to a 10%
increase in comparable store sales for the same period last year.
The Company continues to expect a low double digit comparable store sales
increase for the third fiscal quarter of 2006.
The Company also announced the closure of its Janeville division. All 17 store
locations are planned to be closed by the end of the current fiscal year. The
Company expects to take a third quarter pre-tax charge of approximately $8
million or $0.16 per diluted share due to the closure of the division. In
addition, in the fourth quarter, the Company expects to incur approximately $6
million of additional pre-tax charges and reduced gross margin, or $0.11 per
diluted share, arising from Janeville's closure.
"We are committed to providing sustainable long-term growth for our
shareholders," said Matthew McCauley, Chairman and Chief Executive Officer. "The
decision to close Janeville allows us to focus our efforts on developing new
opportunities that are more in line with our core competencies in the children's
category."
Excluding the charges and lost gross margin related to the closure of the
Janeville division, the Company continues to expect earnings per diluted share
for the third fiscal quarter and full year 2006 to be in the range of $0.53 to
$0.55 and $1.67 to $1.70, respectively.
Including costs associated with the closure of the Janeville division, the
Company now anticipates earnings for the third fiscal quarter of 2006 to be in
the range of $0.37 to $0.39 per diluted share, reflecting a $0.16
Janeville-related charge. For the full fiscal year, the Company expects earnings
in the range of $1.40 to $1.43 per diluted share, including $0.27 of costs and
lower gross margin associated with the closure of Janeville.
MANAGEMENT PRESENTATIONS
For more information about September sales, the closure of Janeville and our
plans for the future, please listen to The Gymboree Corporation's monthly sales
recording by calling the Company's Investor Relations Hotline at 415-278-7933.
The recording will be available Thursday, October 5 at 7:55 a.m. ET through
Wednesday, October 11 at 11:59 p.m. PT.
ABOUT THE GYMBOREE CORPORATION
The Gymboree Corporation's specialty retail brands offer unique, high-quality
products delivered with personalized customer service. As of September 30, 2006,
the Company operated a total of 698 stores: 574 Gymboree(R) retail stores (546
in the United States and 28 in Canada), 34 Gymboree Outlet stores, 73 Janie and
Jack(R) retail shops and 17 Janeville(R) stores in the United States. The
Company also operates online stores at www.gymboree.com and
www.janieandjack.com, and offers directed parent-child developmental play
programs at 545 franchised and company-operated centers in the United States and
26 other countries.
FORWARD-LOOKING STATEMENTS
The foregoing sales figures for the five-week period ended September 30, 2006,
as well as expected charges relating to the closure of the Janeville division,
are 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 and costs related to the closing of the
Janeville division. 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, unanticipated costs actually incurred in connection with the closure
of the Janeville division, 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 January 28, 2006. These forward-looking statements reflect The
Gymboree Corporation's expectations as of October 5, 2006. The Gymboree
Corporation undertakes no obligation to update the information provided herein.
Gymboree, Janie and Jack, and Janeville are registered trademarks of The
Gymboree Corporation.
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