US: Cherokee Q3 profit falls 11% on lower sales
Brand licensor Cherokee Inc has posted a 10.8% drop in third quarter earnings, blaming lower sales and "a difficult global retail environment."
Net earnings for the three months to 1 November fell to $3.3m, or $0.37 per share, from $3.7m, or $0.41 per share, in the same period last year.
Revenues at the firm, which markets, licenses and manages a variety of brands including Cherokee, Sideout and Carole Little, dropped 10.1% to $8.0m from $8.9m a year ago,
International royalties were down 18% on the tough UK retail environment - where Tesco sells the Cherokee brand - and less favourable exchange rates from a strengthening dollar.
Domestic royalty revenues from Target increased to $3.67m or about 46% of third quarter revenues, from $3.29m last year.
Operating income was $4.7m, or 58.1% of revenues, versus $5.1m, or 56.8% of revenues last time.
Robert Margolis, chairman and CEO, said: "We are not immune to the soft global retail environment; however, we take comfort in our highly profitable business model with no inventory, no manufacturing and no debt.
"We believe we are well-positioned due to our diversified global distribution, our low cost operating model and our financial capacity to make prudent acquisitions that may surface in the current climate."
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