DOW JONES – Gymboree Corp.’s (GYMB) fiscal fourth-quarter profit grew 13% as the children’s apparel maker posted higher sales and margins.

Shares were up 2.8% at $47.60 in after-hours trading, as the earnings results topped the company’s February projection. Also, the company expects first-quarter earnings of 90 cents to 94 cents a share on mid-single-digit growth in same-store sales. Analysts polled by Thomson Reuters were expecting earnings of 90 cents.

Separately, Gymboree said it entered a multi-year franchise agreement with a subsidiary of Azadea Group Holding SAL to launch its brand in the Middle East, with plans to open its first stores in Dubai later this year. Lebanon-based Azadea operates 350 stores representing over 30 international brands in the Middle East, while Gymboree is expanding beyond its primary retail presence in the U.S. and Canada.

The company, which sells clothes and accessories for newborns to 12-year-olds, has seen higher sales this year, but has also experienced a decrease in same-store sales in the range of low- to mid-single digits.

For the quarter ended Jan. 30, Gymboree posted a profit of $33.2 million, or $1.11 a share, up from $29.5 million, or $1 a share, a year earlier. In early February, the company raised its earnings target to $1.08 to $1.10.

At that time, Gymboree said revenue from retail operations jumped 4% to $295.7 million while same-store sales dropped 2%. On Wednesday, it reported total sales grew 3.8% to $299.6 million.

Gross margin grew to 46.7% from 43%.

-By Shayndi Raice and John Kell, Dow Jones Newswire; 212-416-2672; shayndi.raice@dowjones.com

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