Cherokee Global Brands Q1 revenues decline 6 percent

Cherokee Global Brands, for its first quarter of fiscal 2020, reported revenues of 5.1 million dollars, a decrease of 6 percent, which the company said was due to non-renewal of the its Cherokee license in South Africa at the end of fiscal 2019, the sale of Flip Flop Shops in June 2018 and the impact of the economic uncertainty related to Brexit affecting several of the company’s European licensees. The company said that decreases in revenues were partially offset by revenues from its new design services agreement in China.

Commenting on the first quarter trading, the company’s Chief Executive Officer Henry Stupp said in a statement: "We have entered a new chapter in our operational model that is highlighted by reducing corporate spend, improving our bottom-line performance and driving revenue growth through our expanded brand portfolio and service model. Towards the end of June 2019, Cherokee Global Brands will officially rebrand to Apex Global Brands to appropriately reflect the company’s expanded brand portfolio and design services.”

Cherokee revises outlook for FY20

Operating income for the quarter was 0.6 million dollars compared to an operating loss of 0.2 million dollars in the first quarter 2019. Net loss was 2.3 million dollars or a loss of 15 cents per diluted share, compared to 2.7 million dollars or a loss of 20 cents per diluted share, in the first quarter of the prior year. Adjusted EBITDA increased to 1.2 million dollars compared to 1 million dollars in the prior year.

Updating its guidance for the remainder of its fiscal year ending February 1, 2020 to account for the potential continued negative impact on its licensees’ revenues due to economic uncertainty surrounding Brexit and potential tariff rate increases on domestic apparel and footwear, Cherokee Global Brands said, full year revenues are now anticipated to be in the range of 24.5 million dollars to 26.5 million dollars, an increase of up to 8 percent year over year.

The company added that adjusted EBITDA is now expected to be in the range of 10.5 million dollars to 11.5 million dollars, an increase of 7 percent to 17 percent year over year.

Picture:Facebook/Cherokee USA