Cherokee Inc. (NASDAQ: CHKE), a leading innovator and global marketer of style-focused lifestyle brands around the world, today reported financial results for the third quarter ended October 27, 2012.
Net revenues were $6.7 million for the quarter, up from $6.0 million in the prior-year period. The higher revenues in the quarter were driven by increased sales of Cherokee-branded products at Target and year-to-date progress at Zellers Canada. Together these revenues more than offset declines at Tesco.
SG&A expenses in the quarter totaled $3.4 million, a significant decrease from the $4.2 million of SG&A expenses in the third quarter of Fiscal 2012. Net income for the quarter was $2.1 million, or $0.25 per diluted share, compared with $1.0 million, or $0.12 per diluted share, in the prior-year period.
“With the holiday season in front of us and a new year in sight, the Cherokee Group is very pleased with the progress we have made and our positive growth outlook with our existing partners,” said Cherokee Group Chief Executive Officer Henry Stupp. “For the third quarter revenues were up 12% year-over-year, while SG&A expenses declined 19%. Our ability to maintain top-line growth while carefully managing our bottom line speaks to the global strength of our retail partners, our strong management team, and our exceptional group of designers, innovators, and relationship builders.”“With regard to Tesco, we continue to see strong progress in the re-launch of Cherokee and expect to see improved revenues from this relationship during Q1 of Fiscal 2014. In addition, we are gratified to say that we continued to see an uptick in sales at Target for our Cherokee brand, with year-to-date revenues increasing 19.2% year-over-year.” Mr. Stupp continued, “While carefully managing our general expenses, we strategically invested for the future and proved successful in bringing new additions into our family of style-focused lifestyle brands. Most notably, at the beginning of the third quarter we welcomed Liz Lange Maternity and the Completely Me Brands to the Cherokee Group, marking our debut in the maternity category. The integration of Liz Lange is now fully complete, and we are currently working to build the brand with both Target and HSN while aggressively seeking new business opportunities internationally.”