Caris analyst keeps Gymboree as a top pick

Caris analyst keeps Gymboree as a top pick among children's apparel retailers, lifts target

• On 10:39 am EDT, Friday October 9, 2009

NEW YORK (AP) -- An analyst kept Gymboree Corp. as her top pick among children's apparel retailers, citing its near-term and long-term growth prospects.

Dorothy Lakner of Caris & Co. said the San Francisco-based chain had a successful back-to-school sales period and could be in store for similar results during the holidays.

"Gymboree's success this year has been based on consistently strong merchandise assortments in both its core Gymboree business and the newer Crazy 8 concept, now including more outfitting. Our first glimpse of holiday product makes us believe they have done it again for holiday," she wrote in a client note.

On Thursday, Gymboree boosted its fiscal third-quarter profit forecast on stronger margins and fewer merchandise markdowns.

Lakner increased Gymboree's price target to $56 from $50 and reiterated a "Buy" rating.

The company's stock dipped 21 cents to $46.35 in morning trading.