Cherokee Inc. (NASDAQ: CHKE), a global brand management company, today reported financial results for the first quarter ended April 28, 2012. Net revenues were $7.5 million for the quarter, up from $6.9 million in the prior year period. For the quarter, SG&A expenses totaled $4.2 million, an increase from $3.3 million in the prior year quarter. Net income for first quarter of Fiscal 2013 was $2.1 million or $0.25 per diluted share, compared with $3.3 million, or $0.38 per diluted share. Fiscal 2012 net income included a one-time tax refund from the California Franchise Tax Board that contributed approximately $0.14 per diluted share.
“Our first quarter marked a strong quarter for the Cherokee Group and a solid start to the fiscal year,” said Cherokee Group Chief Executive Officer Henry Stupp. “Consistent with the long-term strategic plan introduced last quarter, we have continued to make investments in our brands and partnerships; we have begun to see meaningful increases with some of our key partners as well as further global brand recognition. Despite the declines from Tesco and Norma Kamali during the first quarter, we reported a nearly 35% growth in the balance of our business over the past three months. This significant growth is emblematic of the emphasis we have placed on improving our product and brand penetration, developing our partnerships, and refining our direct-to-retail model.”
Mr. Stupp continued, “Particularly gratifying this quarter is the success we have achieved both domestically and abroad for our namesake Cherokee brand. Domestically, Cherokee branded sales at Target made notable strides, with US retail sales up 38% year-over-year. Internationally, we continue to develop, refine, and strengthen our relationship with Tesco in the U.K. Following our new mutual agreement with Tesco, which we announced in April, Tesco’s management has shown a greater commitment to the Cherokee brand. You can expect to see a newly redesigned collection of Cherokee men, women, kids, and baby for Tesco in stores later this year, with an even larger offering at Tesco stores in spring 2013.”
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