Cherokee Inc., a Van Nuys-based apparel, accessories and footwear licensing company, Wednesday reported that poor international sales drove down royalty revenues and hurt net income in the third quarter, despite positive sales at U.S. retailers.
The company said net income for the period ended Oct. 29 fell 57 percent to $1 million, or 12 cents per diluted share, from the year-ago period when the company earned $2.3 million. Net revenues slipped to $6 million, a 22 percent decline from $7.7 million in the third-quarter last year.
The company said its overall performance was affected by international sales and royalty revenues which dropped 47.6 percent and 43.2 percent, respectively, due almost entirely to a decline in sales at U.K retailer Tesco. Sales through its domestic big-box retailer Target were each up by 15.4 percent.
Cherokee CEO, Henry Stupp, said the company is implementing plans to improve international sales, particularly at Tesco.
“We continue to diligently work with Tesco to develop a framework for success going forward, as well as introducing the Cherokee brand into new markets to offset any revenue erosion as we work on a correction with our Tesco business,” Stupp said.
This month, Cherokee moved into its new headquarters in Van Nuys.