Susquehanna Upgrades Gymboree (GYMB) to Positive; Raises 2009 EPS Estimates

May 19, 2009 9:18 AM EDT

Susquehanna upgrades Gymboree (Nasdaq: GYMB) from Neutral to Positive. Price target $46.

Susquehanna analyst says, "We are upgrading GYMB to Positive based on the following key highlights: 1) product safety issues appear to be behind the company; 2) the sales outlook, although negative, will likely continue to come in above management's most recent forecast; 3) management has appropriately aligned the business in the face of a challenging environment, providing greater future operating leverage; 4) aggressive offensive positioning to maintain and expand market share offers an offset to negative comp; 5) GYMB is in a strong financial position with estimated 2009 cash per share north of $7.00. Reflecting more effective promotions, above plan AUR, and a first half comp outlook in-line with management's spring guidance, we are raising our 2009 EPS projection by $0.41 to $2.92 (vs. $3.21), a Y/Y decline of 9%."

The Gymboree Corporation is a specialty retailer operating stores selling apparel and accessories for children under the GYMBOREE, GYMBOREE OUTLET, JANIE AND JACK and Crazy 8 brands, as well as play programs for children under the GYMBOREE PLAY & MUSIC brand.

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• Susquehanna International Group of Companies

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