Kids are dressing better and better these days – as older parents with more income dress their children for the yacht, rather than the sandbox. And it was Gymboree (GYMB) who broke new ground in this retail niche. But after a record two year run, the premier kid stock tripped last quarter on a surprise report of zero sales growth. This year, though, growth is back on track with the crucial spring season ahead. Is the Richie Rich Trade still intact?
Gymboree CEO Matt McCauley joins the guys as Fast Money’s guest, and Dylan Ratigan asks him about momentum coming back to Gymboree?
McCauley says his company is having fewer promotional sales and he’s is focused on long term earnings growth.
Karen Finerman has 4 kids and is familiar with the store. She wants to know about growth.
McCauley says 35% store growth lies ahead in proven concepts, as well as the "boy business". (i.e not girls) He adds the company makes sure it can deliver earnings growth – even when sales comps are modest. The company always focuses on being more efficient.
Jeff Macke says same store sales aren’t quite strong enough for him to convince him to go long in GYMB.
McCauley says the company is doubling its investment in customer acquisition and Jeff should see those numbers improving.
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