SAN FRANCISCO, March 4 /PRNewswire-FirstCall/ -- The Gymboree Corporation (Nasdaq: GYMB) today reported preliminary consolidated financial results for the fourth fiscal quarter and full year ended January 31, 2009.

Fourth Fiscal Quarter Ended January 31, 2009

For the fourth fiscal quarter, net sales were $288.7 million, an increase of 4% compared to $278.4 million in net sales for the fourth fiscal quarter of the prior year. As previously reported, comparable store sales for the quarter decreased 2% versus the fourth quarter of the prior year.

Gross profit for the fourth fiscal quarter of 2008 was $124.3 million or 43.0% of net sales compared to $134.1 million or 48.2% of net sales for the fourth fiscal quarter of 2007. Gross profit rates were primarily impacted by lower average selling prices and a $6.0 million write-off of merchandise inventories made unsalable by the implementation of new product safety laws relating to children's apparel and accessories.

SG&A expense for the fourth quarter was $80.6 million or 27.9% of net sales, compared to $90.3 million or 32.4% of net sales in the comparable quarter of the prior year. Excluding the impact of a $3.2 million non-cash catch-up adjustment for stock-based compensation recorded in the prior year, SG&A as a percentage of net sales fell approximately 340 basis points. The decrease in SG&A as a percentage of net sales was the result of a number of items including reduced corporate compensation, lower marketing costs, leverage of store compensation, and decreased professional fees.

Net income for the fourth quarter of fiscal 2008 was $29.5 million or $1.00 per diluted share, compared to net income of $26.8 million or $0.93 per diluted share for the same period last year. The tax rate for the quarter was 33.2% versus 39.8% in the prior year. The lower tax rate is primarily due to tax planning efforts that resulted in claiming foreign tax credits arising from foreign tax expense.

Fiscal Year 2008 ended January 31, 2009

Net sales for the 52-week period ended January 31, 2009, were slightly more than $1.0 billion, an increase of 9% compared to net sales of $920.8 million for the prior fiscal year. Comparable store sales for fiscal 2008 were flat compared to the prior year.

For the full fiscal year ended January 31, 2009, net income was $93.5 million or $3.21 per diluted share, compared to net income of $80.3 million or $2.67 per diluted share in the prior year.

The Company opened 105 new stores during the fiscal year, consisting of 23 Gymboree stores, 36 Gymboree Outlet stores, 22 Janie and Jack shops and 24 Crazy 8 stores.

• Year-over-year gross profit increased 7.5% while gross margin rates decreased 50 basis points.
• Year-over-year SG&A expense as a percentage of sales decreased by approximately 120 basis points primarily due to lower marketing and professional fees.
• Fiscal 2008 operating income as a percentage of sales increased 70 basis points to 14.8% of sales.
• Cash and cash equivalents at the end of fiscal 2008 were approximately $140 million.
• Merchandise inventories at the end of fiscal 2008 decreased by approximately 4% to $115 million versus $120 million in the prior year. On a per square foot basis, inventories were down approximately 16% compared to the prior year.

First Quarter Fiscal 2009 Business Outlook

The Company expects the current challenging retail selling environment to continue throughout fiscal 2009 making it very difficult to anticipate quarterly sales.