US: Cherokee revenues up, net profit down
- Q3 net earnings down to $2.77m
- Revenues improve $5,000
- Higher tax provision
Cherokee has reported a small rise in both its third quarter revenues and operating income, although net revenues fell due to certain tax issues.
The brand licensing group said that net revenues for the quarter totalled US$8.04m, $5,000 greater than revenues in the comparable period last year.
Operating income for the third quarter was $4.71m, or $40,000 greater than last year. However, net earnings for the third quarter totalled $2.77m, or $0.31 per diluted share, as compared to $3.25m, or $0.37 per diluted share, in the comparable period last year, due to a lower tax provision in the period last year.
Russell J. Riopelle, chief financial officer, said: "Our $0.31 of earnings per diluted share in the third quarter was lower this year due to a higher tax provision, as our pre-tax income was actually slightly higher in the third quarter. As previously announced, we will pay a $0.50 per share dividend on December 16th as we continue to return profits and excess cash to our stockholders."
Howard Siegel, president, added: "Our total domestic royalty revenues declined by 1.4% in the Third Quarter, and our domestic retail sales decline was greater than that, as compared to the third quarter of last year. Our international royalties increased by 1.5%, primarily due to the growth in Canada and in our South American territories, although we did experience some unfavourable exchange rate comparisons with several of our larger international licensees in the third quarter, relative to the comparable period last year, and consequently the retail sales in dollars were lower for these licensees.
"During the third quarter we signed up two new licensees for our Sideout brand, and in November we announced our new licensing agreement for the Cherokee brand in China. We look forward to additional revenue streams from our new licensees over time, while we continue to pursue new licensing opportunities with premier clients around the world."
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