Here is a DLJ analyst report from thurs.
My personal opnion is that Gymboree is very expensive. At least when you have to buy 4 of everything. Their stores seem to have a handful of people in them all the time, but are never packed. They do offer superior quality though.
GYMB does make a pretty good day trading stock.
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GYMBOREE (GYMB: $23.438 )*
Q3 In Line with Expectations
Earnings Per Share
Rating: MARKET PERF.
Change: None
12-Mo. Target: $30
Yesterday, GYMB reported 3Q EPS of $0.44 in line with our ests and $0.01
ahead of Street ests. Sales, which were released last Thursday at retail sales
day, were approximately $2 million lower than expected due to comps of only
1% during the quarter. This was offset by stronger than expected operating
margins. Markedly lower SG&A expenses offset lower gross margins. Overall,
the company is seeing lower gross margins as a result of higher occupancy
costs due to the larger stores, but this is being more than offset by leverage
seen from lower selling and corporate expenses. While we are encouraged by
these operating results, from a top line perspective, the company is having
some difficulty driving consistent comps. Although the company did meet our
earnings expectations for the 3Q, we question their difficulty in driving the top
line. We are comfortable with our 4Q est of $0.49 and believe that inventories
are well positioned going into the quarter. We are very positive about the
management and merchandising changes that have taken place, but we believe
in order for the stock to move, investors need to see a top line acceleration.
Therefore we continue to rate Gymboree a market performance. |
