On March 13, children's clothier and early-childhood "playducator" Gymboree (NASDAQ:GYMB) released fourth-quarter earnings for its 2006 fiscal year, a period that ended Feb. 3.

  • This quarter easily topped management guidance, mostly thanks to very strong December sales. The excellent performance rested on more sales transactions, higher average transaction value, and more items per sale. That trifecta is a retailer's dream come true.
  • Gymboree's margins are very impressive, and they leave closest competitor Children's Place (NASDAQ:PLCE) far behind across the board, eating Gymbo's dust. The 10.1% net margins are matched only by the very best clothiers, like Chico's FAS (NYSE:CHS). And here's the cool bit: Management expects to grow these profit percentages even further this year.
  • The current $50 million share-buyback program has nearly run its course, and you can see the results in a nicely shrunken pool of shares outstanding. May we hope for another round of buyback authorizations?

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2007

Q4 2006

Change

Sales

$241.0

$203.7

18.3%

Net Profit

$24.4

$20.4

19.9%

EPS

$0.75

$0.61

23.0%

Diluted Shares

32.6

33.5

(2.7%)


Get back to basics with the income statement.

Margin Checkup

Q4 2007

Q4 2006

Change*

Gross Margin

49.9%

48.8%

1.1

Operating Margin

15.8%

16.0%

(0.2)

Net Margin

10.1%

10.0%

0.1
*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q4 2007

Q4 2006

Change

Cash + ST Invest.

$156.8

$147.0

6.7%

Accounts Rec.

$13.0

$11.9

9.4%

Inventory

$104.3

$98.2

6.2%


Liabilities

Q4 2007

Q4 2006

Change

Accounts Payable

$55.9

$44.0

26.9%

Long-Term Debt

$0

$0

N/A


The balance sheet reflects the company's health.

Cash Flow Highlights
Management didn't hand out any cash flow data today, so we'll have to wait for the 10-K filing for that. Curses!

Free cash flow is a Fool's best friend.

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund was a Gymboree shareholder but had no other position in any company mentioned. Fool rules are here.