The Gymboree Corporation (GYMB) is set to report earnings after the market closes on Wednesday, August 20th. The Gymboree Corporation, a specialty retailer, offers apparel and accessories for children under GYMBOREE, GYMBOREE OUTLET, JANIE AND JACK, and Crazy 8 brands, as well as play programs for children under the GYMBOREE PLAY & MUSIC brand.

Gymboree is expected to earn a profit 24 cents per share for its 2nd quarter. We expect GYMB to announce earnings that will beat investors’ and analysts’ expectations as the kid’s clothes retailer has recently increased guidance for the quarter.

Seven of the 9 analysts following GYMB have raised their estimates for the company within the last 7 days and the consensus estimate for the quarter has grown by 3 cents. Four have increased their outlook for 2009’s bottom line .

Gymboree’s fundamental analysis

Valuation wise, the company is on solid ground. GYMB is expected to grow by nearly 20% for the year and trades at a P/E of just 13. The Correct Call loves stocks with P/Es less than the company’s growth rate. GYMB trades at just 1.16 times sales and with a PEG ratio of just 1.16; again, two metrics that please us. GYMB also boasts a return on equity of 36.22%, well above the minimum 14% we like to see.

Typically Gymboree’s shares have performed well following earnings announcements. After its last report report, GYMB’s shares increased almost 10% in just 5 days.

Suggested Stop: $35.79