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Friday, Jul 12, 2024

Cherokee Revenue Falls in Quarter

Cherokee Inc. beat Wall Street expectations on earnings but fell short on revenue in the third quarter. The Sherman Oaks brand licensing firm reported non-adjusted net income of $700,000 (8 cents a share) for the quarter ended Oct. 29, compared with net income of $2 million (22 cents a share) for the same period a year ago. Revenue fell roughly 25 percent year-over-year to $6.1 million. Analysts on average expected earnings of 7 cents on revenue of $6.8 million, according to Thomson Financial Network. The company also reported it had closed its previously announced acquisition of Dutch shoemaker Hi-Tec Sports International Holdings B.V. for $94 million. The purchase was funded using cash on hand, the sale of Hi-Tec’s hard assets to new operating partners, a credit facility with Cerberus Business Finance LLC and a public stock offering priced at $9.50 a share. “Following the close of the Hi-Tec transaction, Cherokee Global Brands will be more diversified … than ever before,” Chief Executive Henry Stupp said in a prepared statement. “We expect to achieve more balanced performance in fiscal 2018 with strong contributions from both our organic and acquired growth initiatives.” The company announced results Thursday after the market closed. Cherokee shares on Friday fell 35 cents, or 3 percent, to close at $11.10 on the Nasdaq.

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