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Sales down 16.88% at Cherokee in FY'12
13 Apr '12
3 min read
Cherokee Inc, a global brand management company, reported financial results for the fourth quarter and year ended January 28, 2012.
Net revenues were $6.0 million for the fourth quarter and $25.6 million for the year, compared with $7.4 million and $30.8 million in the fourth quarter and fiscal year 2011, respectively. For the quarter, SG&A expenses totaled $3.5 million, a decrease from $7.3 million in the prior year quarter.
For the year, SG&A totaled $14.9 million, a decrease from $17.9 million in FY 2011. Net income for the quarter was $1.5 million or $0.18 per diluted share, compared with $44,000 in the prior year time period. For fiscal 2012, net income totaled $7.5 million, or $0.89 per diluted share, roughly on par with $7.7 million or $0.87 per diluted share for the prior fiscal year.
"Fiscal 2012 represented a year of accomplishment for Cherokee," said Cherokee Group Chief Executive Officer Henry Stupp. "We saw a meaningful increase in our global brand recognition despite declines from Tesco's sale of Cherokee branded products and the non-renewal of the Norma Kamali license with Wal-Mart.
“I am pleased to note that Cherokee products are now available in more countries than they have been in prior years and, except for the declines that we have experienced in the United Kingdom and certain countries within Central Europe, we are seeing an increase in the sale of Cherokee products in most of our major markets. This bodes well for our partners, our brands, and the new business methods we have instituted."
Mr. Stupp continued, "With the global expansion of our sales and marketing teams along with the creation and successful implementation of our proprietary 360 degree service-model, we are well positioned to leverage our merchandising and product development skills and extensive relationships with global retailers and manufacturers.
“Most gratifying were the fourth quarter results we achieved here at home; Target Stores, our first Cherokee partner, generated a double-digit retail sales increase of about 26% over the prior year resulting in a corresponding royalty revenue increase of nearly 10%. After experiencing positive results for both Back-To-School and Holiday 2011, early indications bode well for this positive momentum continuing into our new fiscal year.
“We are excited for further growth at Nishimatsuya in Japan and Magnit in Russia which both recently launched the Cherokee brand. We also look forward to our new collaboration with Tesco in fiscal 2013, representing a resurgence of our business in the U.K. and Central Europe with increased dedication from both the Cherokee Group and Tesco. Each of the investments we have made over the past year has been carefully considered to ensure that the Cherokee Group generates the highest quality product while simultaneously ensuring a strong financial position and creating long term sustainable value for our shareholders."
At January 28, 2012, the Company had cash and cash equivalents of $7.4 million, down from $8.0 million at October 28, 2011 which was primarily due to the $0.7 million orderly pay down of the Company's sole loan to US Bank, leaving a remaining balance of $6.94 million.
Net revenues were $6.0 million for the fourth quarter and $25.6 million for the year, compared with $7.4 million and $30.8 million in the fourth quarter and fiscal year 2011, respectively. For the quarter, SG&A expenses totaled $3.5 million, a decrease from $7.3 million in the prior year quarter.
For the year, SG&A totaled $14.9 million, a decrease from $17.9 million in FY 2011. Net income for the quarter was $1.5 million or $0.18 per diluted share, compared with $44,000 in the prior year time period. For fiscal 2012, net income totaled $7.5 million, or $0.89 per diluted share, roughly on par with $7.7 million or $0.87 per diluted share for the prior fiscal year.
"Fiscal 2012 represented a year of accomplishment for Cherokee," said Cherokee Group Chief Executive Officer Henry Stupp. "We saw a meaningful increase in our global brand recognition despite declines from Tesco's sale of Cherokee branded products and the non-renewal of the Norma Kamali license with Wal-Mart.
“I am pleased to note that Cherokee products are now available in more countries than they have been in prior years and, except for the declines that we have experienced in the United Kingdom and certain countries within Central Europe, we are seeing an increase in the sale of Cherokee products in most of our major markets. This bodes well for our partners, our brands, and the new business methods we have instituted."
Mr. Stupp continued, "With the global expansion of our sales and marketing teams along with the creation and successful implementation of our proprietary 360 degree service-model, we are well positioned to leverage our merchandising and product development skills and extensive relationships with global retailers and manufacturers.
“Most gratifying were the fourth quarter results we achieved here at home; Target Stores, our first Cherokee partner, generated a double-digit retail sales increase of about 26% over the prior year resulting in a corresponding royalty revenue increase of nearly 10%. After experiencing positive results for both Back-To-School and Holiday 2011, early indications bode well for this positive momentum continuing into our new fiscal year.
“We are excited for further growth at Nishimatsuya in Japan and Magnit in Russia which both recently launched the Cherokee brand. We also look forward to our new collaboration with Tesco in fiscal 2013, representing a resurgence of our business in the U.K. and Central Europe with increased dedication from both the Cherokee Group and Tesco. Each of the investments we have made over the past year has been carefully considered to ensure that the Cherokee Group generates the highest quality product while simultaneously ensuring a strong financial position and creating long term sustainable value for our shareholders."
At January 28, 2012, the Company had cash and cash equivalents of $7.4 million, down from $8.0 million at October 28, 2011 which was primarily due to the $0.7 million orderly pay down of the Company's sole loan to US Bank, leaving a remaining balance of $6.94 million.
Cherokee Inc
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