Gymboree Posts Profit for Fiscal 4th Quarter
- Share via
Children’s apparel retailer Gymboree Corp. on Wednesday reported a fiscal fourth-quarter profit, reversing a year-earlier loss. The company also forecast first-quarter earnings at the top end of Wall Street’s view, with rejuggled product lines and store efficiencies expected to boost sales.
Gymboree shares rose 36 cents, or 8%, to $12.21 on Nasdaq as investors welcomed signs that the company’s business is turning around.
Mark Friedman, an analyst at Merrill Lynch, said the stock had fallen so low it was now attractive to buy.
“We believe the shares can move back to the mid-teens on continued strong earnings growth and the potential that a new concept could see store expansion accelerate longer term,” Friedman said in a research note. He raised his rating on the stock to “buy” from “neutral.”
The Burlingame, Calif.-based company, which operates 580 stores, posted net income of $10.5 million, or 35 cents a share. Its year-earlier net loss was $1.2 million, or 4 cents, which included a charge from its sold-off Zutopia division. The results were a penny better than the average estimate of analysts polled by Thomson Financial/First Call.
Sales were $150.4 million in the 13-week quarter, down 2% from last year’s 14-week quarter.
Gymboree projected first-quarter earnings of 7 cents to 9 cents, compared with First Call estimates of 5 cents to 10 cents, and a mean at 7 cents.
Gymboree also said it plans to launch 10 stores based on a new concept in the third quarter, on a test basis. The stores, dubbed Janie & Jack, will offer high-end apparel and gifts for infants.
More to Read
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.