Gymboree 3rd-quarter profit rises 12 percent on lower expenses, improved margins
By APWednesday, November 18, 2009
Gymboree profit rises on lower expenses
SAN FRANCISCO — Children’s apparel retailer Gymboree Corp. said Wednesday its fiscal third-quarter profit rose 12 percent as expense cuts helped boost its bottom line.
But Gymboree issued a fourth-quarter profit forecast below Wall Street’s expectations, sending shares lower in after-market trading.
The San Francisco-based operator of the 951-store chain reported net income for the period ended Oct. 31 of $34.8 million, or $1.15 per share. That’s up from a profit of $30.9 million, or $1.06 per share, in the same period a year ago.
Analysts surveyed by Thomson Reuters had forecast a slightly smaller profit of $1.13 per share in the latest quarter.
Total net sales rose nearly 2 percent to $269.1 from $264.1 million. Sales at stores open at least a year fell 4 percent — a result that Gymboree had announced on Nov. 5.
Gymboree’s profit gain was boosted by a 4 percent reduction in selling, general and administrative expenses, which fell to $80.7 million from $84.4 million. Chairman and CEO Matthew McCauley said his company’s operating margin improved over the same quarter a year ago.
Gymboree expects sales at stores open at least a year to decrease by 1 to 5 percent in its fiscal fourth quarter. Profit is expected to range from 95 cents per share to $1.03, short of analysts’ consensus estimate of $1.13.
Gymboree also announced Wednesday that its board has authorized the company to use as much as $40 million of its cash reserves to purchase the company’s common shares under a buyback program. At current price levels, about 3 percent of the company’s outstanding shares could be repurchased under the program.
Gymboree released quarterly results after its shares fell 51 cents, or about 1.2 percent, to close at $40.99. Shares slipped $1.24, or 3 percent, to $39.93 in after-hours trading on the weak forecast.
Gymboree operates Gymboree and Gymboree Outlet stores as well Janie and Jack shops and Crazy 8 stores.
