<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended MAY 3, 1997
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from _____________________ to ______________________
Commission file number 000-21250
THE GYMBOREE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 94-2615258
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
700 AIRPORT BOULEVARD, BURLINGAME, CALIFORNIA 94010-1912
(Address of principal executive offices) (Zip code)
(415) 579-0600
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Number of shares of common stock outstanding at May 21, 1997: 24,865,521
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income.......................... 3
Consolidated Balance Sheets................................ 4
Condensed Consolidated Statements of Cash Flows............ 5
Notes to Consolidated Financial Statements................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 7
PART II. OTHER INFORMATION
Item 2. Changes in Securities...................................... 10
Item 4. Submission of Matters to a Vote of Security Holders........ 11
Item 6. Exhibits and Reports on Form 8-K........................... 11
SIGNATURES ........................................................... 13
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE GYMBOREE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AND STORE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
--------------------------
MAY 3, 1997 MAY 5, 1996
----------- -----------
<S> <C> <C>
NET SALES $ 85,240 $ 69,103
COST OF GOODS SOLD, INCLUDING
BUYING AND OCCUPANCY EXPENSES (46,294) (35,447)
-------- --------
GROSS PROFIT 38,946 33,656
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (26,306) (20,815)
PLAY PROGRAM INCOME 0 128
-------- --------
OPERATING INCOME 12,640 12,969
INTEREST INCOME 1,010 890
-------- --------
INCOME BEFORE INCOME TAXES 13,650 13,859
INCOME TAXES (5,051) (5,266)
-------- --------
NET INCOME $ 8,599 $ 8,593
======== ========
NET INCOME PER SHARE:
PRIMARY $ 0.34 $ 0.34
FULLY DILUTED $ 0.34 $ 0.34
WEIGHTED AVERAGE SHARES OUTSTANDING:
PRIMARY 25,428 25,444
FULLY DILUTED 25,514 25,574
NUMBER OF STORES AT END OF PERIOD 380 305
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE> 4
THE GYMBOREE CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
MAY 3, 1997 FEB 2, 1997 MAY 5, 1996
----------- ----------- -----------
<S> <C> <C> <C>
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 7,725 $ 8,027 $ 11,476
INVESTMENTS 73,458 82,360 74,983
ACCOUNTS RECEIVABLE 4,654 4,336 4,319
MERCHANDISE INVENTORIES 36,568 48,979 29,091
PREPAID EXPENSES AND OTHER 1,553 1,893 2,342
--------- --------- ---------
TOTAL CURRENT ASSETS 123,958 145,595 122,211
--------- --------- ---------
PROPERTY AND EQUIPMENT:
LEASEHOLD IMPROVEMENTS 48,765 44,231 34,657
FURNITURE, FIXTURES AND EQUIPMENT 52,399 45,820 28,143
--------- --------- ---------
101,164 90,051 62,800
LESS ACCUMULATED DEPRECIATION AND AMORTIZATION (21,748) (19,465) (13,554)
--------- --------- ---------
79,416 70,586 49,246
OTHER ASSETS 1,158 728 517
--------- --------- ---------
TOTAL ASSETS $ 204,532 $ 216,909 $ 171,974
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
TRADE ACCOUNTS PAYABLE $ 9,960 $ 21,949 $ 9,794
ACCRUED LIABILITIES 10,423 11,825 9,843
INCOME TAXES PAYABLE 7,407 6,631 8,408
--------- --------- ---------
TOTAL CURRENT LIABILITIES 27,790 40,405 28,045
--------- --------- ---------
DEFERRED RENT AND OTHER 16,008 14,571 11,310
STOCKHOLDERS' EQUITY:
COMMON STOCK, INCLUDING EXCESS PAID-IN CAPITAL
($.001 PAR VALUE: 100,000,000 SHARES AUTHORIZED;
24,962,356, 25,324,060 AND 25,042,605 SHARES
OUTSTANDING AT MAY 3, 1997, FEBRUARY 2, 1997,
AND MAY 5, 1996, RESPECTIVELY) 52,762 62,694 57,355
RESTRICTED STOCK DEFERRED COMPENSATION (337) (753) (1,043)
UNREALIZED CHANGE IN VALUE OF INVESTMENTS 13 219 (269)
CUMULATIVE TRANSLATION ADJUSTMENT (75) 1 0
RETAINED EARNINGS 108,371 99,772 76,576
--------- --------- ---------
TOTAL STOCKHOLDERS' EQUITY 160,734 161,933 132,619
--------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 204,532 $ 216,909 $ 171,974
========= ========= =========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
THE GYMBOREE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
----------------------------
MAY 3, 1997 MAY 5, 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,599 $ 8,593
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,828 1,852
Non-cash compensation expenses 416 96
Loss on disposal of property and equipment 520 410
Provision for deferred income taxes 397 (168)
Tax benefit from exercise of stock options 130 162
Cumulative translation adjustment (76) --
Change in assets and liabilities:
Accounts receivable (318) (1,451)
Merchandise inventories 12,411 8,561
Prepaid expenses and other assets (311) (257)
Accounts payable (11,989) 137
Accrued liabilities (1,578) (894)
Income taxes payable 776 2,164
Deferred rent and other 1,437 1,872
-------- --------
Net cash provided by operating activities 13,242 21,077
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (12,178) (8,100)
Proceeds from sales (purchase) of marketable securities 8,696 (10,761)
-------- --------
Net cash used in investing activities (3,482) (18,861)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 440 505
Repurchase of common stock (10,502) --
-------- --------
Net cash (used) provided by financing activities (10,062) 505
-------- --------
Net (decrease) increase in cash and cash equivalents (302) 2,721
CASH AND CASH EQUIVALENTS:
Beginning of quarter 8,027 8,755
-------- --------
End of quarter $ 7,725 $ 11,476
======== ========
OTHER CASH FLOW INFORMATION:
Cash paid during the year for income taxes $ 3,787 $ 3,189
======== ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE> 6
THE GYMBOREE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The unaudited interim consolidated financial statements of The
Gymboree Corporation and its wholly-owned subsidiaries (the "Company") as
of and for the period ended May 3, 1997 and May 5, 1996 have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is
recommended that these financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended February 2, 1997.
The accompanying interim consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods presented and necessary to
present fairly the results of operations, the financial position and cash
flows for the periods presented. All such adjustments are of a normal and
recurring nature. Certain prior year amounts have been reclassified to
conform with the current year presentation.
2. MERCHANDISE INVENTORIES
Merchandise inventories are recorded under the retail method of
accounting and are stated at the lower of cost or market.
3. INCOME TAXES
The Company's effective tax rate in the first quarter of fiscal 1997
was 37%, compared to 38% for the same period last year.
4. STOCK REPURCHASE PLAN
In February 1997, the Board of Directors authorized the Company to
repurchase up to $30 million of its outstanding common stock in the open
market. The Company had spent $10.5 million to repurchase 395,000 shares of
common stock as of May 3, 1997 .
5. RECENTLY ISSUED ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
(SFAS No. 128). The Company is required to adopt SFAS No. 128 in the fourth
quarter of fiscal 1997. At that time the company will restate earnings per
share (EPS) data for prior periods to conform with SFAS No. 128. Earlier
application is not permitted. SFAS No. 128 replaces current EPS reporting
requirements and requires a dual presentation of basic and diluted EPS.
Basic EPS excludes dilution and is computed by dividing net income by the
weighted average of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if stock options,
convertible debt instruments or other securities or contracts to issue
common stock were exercised or converted into common stock. If
6
<PAGE> 7
SFAS No. 128 had been in effect during the current and prior year periods,
basic and diluted EPS would have been $0.34 for the quarters ended May 3, 1997
and May 5, 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, (i) selected
income statement data expressed as a percentage of net sales, (ii) the
percentage change from the same period of the prior year in such selected income
statement data and (iii) the number of stores open at the end of each such
period:
<TABLE>
<CAPTION>
AS A PERCENTAGE OF NET SALES PERCENTAGE CHANGE
FOR THE THIRTEEN WEEKS ENDED IN DOLLAR AMOUNTS
--------------------------------- FROM 1996 TO 1997 FOR
MAY 3, 1997 MAY 5, 1996 THE THIRTEEN WEEK PERIOD
----------- ----------- ------------------------
<S> <C> <C> <C>
NET SALES 100.0% 100.0% 23.4%
COST OF GOODS SOLD, INCLUDING
BUYING AND OCCUPANCY EXPENSES (54.3) (51.3) (30.6)
----- ----- ------
GROSS PROFIT 45.7 48.7 15.7
SELLING, GENERAL AND (30.9) (30.1) (26.4)
ADMINISTRATIVE
EXPENSES
PLAY PROGRAM INCOME 0.0 0.2 (100.0)
----- ----- ------
OPERATING INCOME 14.8 18.8 (2.5)
INTEREST INCOME 1.2 1.3 13.4
----- ----- ------
INCOME BEFORE INCOME TAXES 16.0 20.1 (1.5)
INCOME TAXES (5.9) (7.7) 4.1
----- ----- ------
NET INCOME 10.1% 12.4% 0.1%
===== ===== ======
NUMBER OF STORES AT END OF PERIOD 380 305
</TABLE>
7
<PAGE> 8
RESULTS OF OPERATIONS (CONTINUED)
THIRTEEN WEEKS ENDED MAY 3, 1997 COMPARED TO THIRTEEN WEEKS ENDED MAY 5, 1996
- ------------------------------------------------------------------------------
NET SALES
Net sales in the first quarter of fiscal 1997 increased 23% to $85.2
million compared to $69.1 million in the same period last year. Sales for the 27
stores opened in the first quarter of fiscal 1997 contributed $3.5 million of
the increase in net sales. Stores opened prior to fiscal 1997, but not
qualifying as comparable stores, in addition to eight stores that were expanded
in fiscal 1997, contributed $11.7 million of the increase in net sales.
Comparable store net sales increased 2% in the first quarter and contributed
$0.9 million of the increase in net sales.
GROSS PROFIT
Gross profit for the thirteen weeks ended May 3, 1997 increased 16% to
$38.9 million from $33.7 million in the same period last year. As a percentage
of net sales, gross profit was 45.7% in the first quarter of fiscal 1997
compared to 48.7% in the same period last year. The decrease in gross profit, as
a percentage of sales, was primarily due to higher markdowns taken in the first
quarter of 1997.
The Company is planning higher average per store inventory levels for the
balance of 1997 as compared to 1996. While the increase in average per store
inventory levels is expected to have a favorable impact on comparable store
sales, this may result in downward pressure on gross profit as a percentage of
sales.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses ("S, G&A"), which principally
consist of non-occupancy store expenses, corporate overhead and distribution
expenses, increased to 30.9% of net sales in the first quarter of fiscal 1997,
compared to 30.1% of net sales in the same period last year.
The increase in S, G&A expenses, as a percentage of net sales, was
primarily due to the increases in store payroll and expenses related to the
resignation of the Company's chief executive officer in February, 1997, which
resulted in a one time pre-tax charge of $900,000.
The Company expects total S, G&A expenses, as a percentage of net sales, to
decline slightly in fiscal 1997 due to a planned increase in comparable store
sales and the discontinuation of the Company's catalog business at the end of
fiscal 1996. However, this decline is expected to be partially offset by
expenses associated with the addition of new stores located in Canada, and the
launch of the Company's international expansion into the United Kingdom and the
Republic of Ireland.
8
<PAGE> 9
INTEREST INCOME
Interest income increased to $1.0 million during the first quarter of 1997
from $890,000 during the first quarter of the prior year. The increase in
interest income is primarily due to increased yields on investments during the
first quarter of 1997 as compared to the first quarter of 1996.
INCOME TAX
The Company's effective tax rate in the first quarter of fiscal 1997 was
37%, compared to 38% for the same period last year. The decrease was due to a
lower aggregate state tax rate than the prior year.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
The decline in cash provided by operating activities in the first quarter of
1997 compared to the first quarter of 1996 was primarily attributable to the
timing of certain payables at the 1996 year-end. Cash provided by operating
activities of $13.2 million was primarily attributable to $8.6 million of net
income and $2.8 million of depreciation and amortization. Cash used in investing
activities of $3.5 million for the first quarter of 1997 related primarily to
$12.2 million in capital expenditures for new store openings and the relocation
and/or expansion of certain existing stores, offset by $8.7 million from sales
of certain marketable securities. Cash used in financing activities of $10.1
million was primarily due to the Company's common stock repurchase program. As
of May 3, 1997, $10.5 million of the Company's common stock had been
repurchased.
The combined balances of cash, cash equivalents and investments were $81.2
million at May 3, 1997, a decrease of $9.2 million from February 2, 1997.
Working capital as of May 3, 1997 was $96.2 million compared to $105.2 million
at the end of fiscal 1996. The decrease in working capital was primarily due to
the Company's common stock repurchase program and a decrease in inventory,
partially offset by a decrease in accounts payable. The Company's investments
consist largely of short-to-medium term investment grade securities.
The Company estimates that capital expenditures during fiscal 1997 will be
between $50 million and $60 million, and will be principally used to fund the
opening of approximately 75 to 85 new stores, to remodel or expand approximately
25 existing stores, to complete the all store roll-out of the In-Store POS
system and to construct a new 300,000 square foot distribution center on 15
acres of land located in Dixon, California. The Company purchased the land and
commenced construction in May 1997. The target opening for this new facility is
January 1998.
The Company has no long term debt and did not require any cash borrowings
in the first thirteen weeks of fiscal 1997 or 1996. The Company currently has
lines of credit that allow up to $100 million of long-term unsecured letters of
credit. As of May 21, 1997, $57.9 million was available. The Company uses these
lines primarily to support letters of credit which fund its foreign sourcing of
merchandise inventories.
The Company anticipates that cash generated from operations, together with
its existing cash resources, and funds available from its current letter of
credit facilities will be sufficient to satisfy its cash needs through at least
fiscal 1998.
9
<PAGE> 10
OTHER FACTORS THAT MAY AFFECT FUTURE PERFORMANCE
This Form 10-Q contains certain forward-looking statements reflecting the
Company's current expectations, including statements regarding anticipated store
openings, completion of a distribution center and future comparable store net
sales, inventory, expense and liquidity levels. There can be no assurance that
actual results will not vary materially from results projected in such
forward-looking statements as a result of a number of factors, including
competitive market conditions, levels of discretionary consumer spending,
general economic conditions, the degree of promotional pricing activity by the
Company, inventory levels, and the ability of the Company to successfully
identify and respond to emerging children's fashion trends, to effectively
monitor and control costs, and to effectively manage anticipated international
and domestic growth. Other factors that may cause actual results to differ
materially include those set forth in the reports that the Company files from
time to time with the Securities and Exchange Commission.
Other factors that may affect future performance include the following:
INVENTORY LEVELS
The Company is planning higher average per store inventory levels in 1997 as
compared to 1996. While the increase in average per store inventory levels is
expected to have a favorable impact on comparable store sales, there can be no
assurance that the Company will experience increases in comparable store sales.
INTERNATIONAL EXPANSION
In fiscal 1997, the Company plans to further its international expansion
in Canada, the United Kingdom and the Republic of Ireland. During the
first quarter of fiscal 1997, the Company opened two additional stores in
Canada, bringing the number of stores in Canada to seven. The success of this
planned expansion will depend upon a number of factors, including the
availability of suitable store locations, the ability to provide an adequate
supply of inventory and the ability to hire and train qualified employees, of
which there can be no assurance.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
In March 1997, the Company adopted a Stockholder Rights Plan (the "Plan").
The Plan entails a dividend of one right for each outstanding share of the
Company's common stock. The rights are represented by and traded with the
Company's common stock. There are no separate certificates or market for the
rights.
The rights do not become exercisable or trade separately from the common
stock unless 17.5% or more of the common stock of the Company has been acquired,
or after a tender or exchange offer is made for 17.5% or greater ownership of
the Company's common stock. Should the rights become exercisable, each right
will entitle the holder thereof to buy 1/1,000th of a share of the Company's
Series A Preferred Stock at an exercise price of $125. Each 1/1,000th of a share
of the new Series A Preferred Stock will essentially be the economic equivalent
of one share of common stock.
10
<PAGE> 11
Under certain circumstances, the rights "flip-in" and become rights to buy
the Company's common stock at a 50% discount. Under certain other circumstances,
the rights "flip-over" and become rights to buy an acquirer's common stock at a
50% discount.
The rights may be redeemed by the Company for $0.01 per right at any time
on or prior to the fifth day (or a later date as determined by the Board of
Directors) following the first public announcement by the Company of the
acquisition of beneficial ownership of 17.5% of the Company's common stock.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders was held on May 16, 1997 at which the
stockholders voted on proposals as follows:
<TABLE>
<CAPTION>
Votes Against Abstentions
Votes for or Withheld and Non-Votes
--------- ----------- -------------
<S> <C> <C> <C>
Election of Directors:
Arthur S. Berliner 20,348,280 2,285,081 2,385,457
Walter F. Loeb 20,359,460 2,273,901 2,385,457
Peter L. Thigpen 20,360,355 2,273,006 2,385,457
Ratify the appointment of
Deloitte & Touche LLP as
independent auditors for
fiscal 1997. 22,599,764 25,875 2,393,179
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.3 Certificate of Designation of Rights, Preferences and
Privileges of Series A Participating Stock of The Gymboree
Corporation. (4)
4.4 Preferred Stock Rights Agreement, date as of March
17, 1997, between The Gymboree Corporation and The
First National Bank of Boston, including the
Certificate of Designation, the form of Rights
Certificate and the Summary of Rights attached
thereto as Exhibits A, B and C, respectively. (5)
11 Computation of Net Income per Share
27 Financial Data Schedule
11
<PAGE> 12
(4) Incorporated by reference to Exhibit 3 to the Registrant's
Registration Statement on Form 8-A filed with the Commission
on March 20, 1997 (file no. 000-21250).
(5) Incorporated by reference to Exhibit 5 to the Registrant's
Registration Statement on Form 8-A filed with the Commission
on March 20, 1997 (file no. 000-21250).
(b) Reports on Form 8-K
A report on Form 8-K was filed on February 28, 1997,
announcing the election of Jerome A. Chazen as a new director,
the resignation of Ms. Nancy Pedot, from her positions as
President, Chief Executive Officer and Director, as of
February 14, 1997 and the appointment of Gary White, formerly
Chief Operating Officer and Senior Vice President of the
Company, to the positions of President, Chief Executive
Officer and Director.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE GYMBOREE CORPORATION
(Registrant)
June 16, 1997 By: /s/ Gary White
- --------------------- ---------------------------------------
Date Gary White
President and Chief Executive Officer
(Principal executive officer of the registrant)
June 16, 1997 By: /s/ James P. Curley
- --------------------- ---------------------------------------
Date James P. Curley
Senior Vice President and
Chief Financial Officer and
Chief Administrative Officer
(Principal financial and accounting officer
of the registrant)
13
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Page No.
- ------ ----------- --------
<S> <C> <C>
11 Computation of Net Income per Share 15
27 Financial Data Schedule --
</TABLE>
14
<PAGE> 1
EXHIBIT 11
THE GYMBOREE CORPORATION
COMPUTATION OF NET INCOME PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
--------------------------
MAY 3, 1997 MAY 5, 1996
----------- -----------
<S> <C> <C>
NET INCOME $ 8,599 $ 8,593
======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING
DURING THE PERIOD:
COMMON STOCK 24,987 25,027
ADD INCREMENTAL SHARES FROM ASSUMED
EXERCISE OF STOCK OPTIONS 441 416
------- -------
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 25,428 25,443
======= =======
PRIMARY NET INCOME PER SHARE $ 0.34 $ 0.34
======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING
DURING THE PERIOD:
COMMON STOCK 24,987 25,027
ADD INCREMENTAL SHARES FROM ASSUMED
EXERCISE OF STOCK OPTIONS 527 547
------- -------
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 25,514 25,574
======= =======
FULLY DILUTED NET INCOME PER SHARE $ 0.34 $ 0.34
======= =======
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000786110
<NAME> THE GYMBOREE CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-03-1997
<PERIOD-END> MAY-03-1997
<CASH> 7,725
<SECURITIES> 73,458
<RECEIVABLES> 4,654
<ALLOWANCES> 0
<INVENTORY> 36,568
<CURRENT-ASSETS> 123,958
<PP&E> 101,164
<DEPRECIATION> 21,748
<TOTAL-ASSETS> 204,532
<CURRENT-LIABILITIES> 27,790
<BONDS> 0
0
0
<COMMON> 52,762
<OTHER-SE> 107,792
<TOTAL-LIABILITY-AND-EQUITY> 204,532
<SALES> 85,240
<TOTAL-REVENUES> 85,240
<CGS> 46,294
<TOTAL-COSTS> 46,294
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 13,650
<INCOME-TAX> 5,051
<INCOME-CONTINUING> 8,599
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,599
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
</TABLE>
