VAN NUYS, Calif. (AP) ¿ Cherokee Inc., which licenses and manages apparel brands, said Wednesday its first-quarter profit fell 18 percent as it was hurt by the stronger dollar and weaker demand.
Profit for the three months ended May 2 fell to $3.8 million, or 43 cents, from $4.7 million, or 52 cents, a year earlier.
Revenue fell 23 percent to $8.9 million from $11.5 million.
The stronger dollar pushed down revenue by 7 cents per share, as royalties from international licensees fell. Companies that do significant business overseas suffer when the dollar strengthens, dragging down revenue as profit is translated from local currencies into the dollar.Sales were also hurt by the closure of Mervyn's stores and weaker demand for adult apparel sold at Target stores, the company said in a statement. "Although we are not pleased with our first quarter revenue results, we are pleased with our prudent expense management and are very certain that our sales teams are focused on some exciting growth opportunities we hope to announce over the next six months," Chief Executive Robert Margolis said in a statement. Van Nuys, Calif.-based Cherokee shares fell 32 cents to $19.56 in late morning trading.