- Prachi Singh |
Third quarter revenues at Cherokee Global Brands decreased 25 percent to 5.8 million dollars in the third quarter, as the company said, it continues to transition from its DTR licenses to new wholesale licensing partners in the United States, which was partially offset by revenues from the company’s new product development and design agreement. Revenue generated from the Hi-Tec brand portfolio grew 1.6 million dollars to 8.6 million dollars for the nine-month period, an increase of 22 percent compared to the first nine months of the prior year.
“Although it’s early, our licensees and retail partners are seeing a significant revenue opportunity for the Hi-Tec portfolio of brands as they introduce new categories into new distribution channels on a global scale,” said Henry Stupp, the company’s CEO in a statement, adding, “Looking to the remainder of fiscal 2019 and beyond, we intend to expand the reach of our brand portfolio through category growth, new territories, new design partnerships and new licensees.”
Cherokee Q3 revenues decline
The company added that year-over-year decline in revenue largely reflects the transition of the company’s Tony Hawk, Cherokee, and the Liz Lange brands in the US from a direct-to-retail model to new wholesale licensing partners. Revenues in the prior year quarter included 2.4 million dollars from non-renewed licenses and Flip Flop Shops, which was divested in June 2018. These declines were partially offset by revenues from the company’s new multi-year product development and design agreement in China. Revenues from relationships that existed in the third quarter of fiscal 2018 increased 0.4 million dollars or 8 percent year over year.
Revenues for the first nine months were 18.3 million dollars, a decrease of 4.2 million dollars or 19 percent. Non-renewed licenses and Flip Flop Shops represented 8 million dollars of revenues in the first nine months of the prior year. These declines were partially offset by revenue increases for the Cherokee and Hi-Tec portfolio of brands along with revenues from the new product development and design agreement. Revenues from relationships that existed in the first nine months of the year increased 3.8 million dollars or 26 percent.
Net income from continuing operations was 0.1 million dollars or zero cents per diluted share in the third quarter of the current year, as compared to a net loss of 2.4 million dollars or 17 cents per diluted share in the prior year. The net loss from continuing operations for the first nine months was 11.7 million dollars or 83 cents per diluted share, compared to net loss of 10.7 million dollars or 81 cents per diluted share in the prior year.
Adjusted EBITDA increased 1.1 million dollars or 68 percent to 2.6 million dollars for the third quarter compared to 1.6 million dollars in the prior year. Adjusted EBITDA during the first nine months increased 2.8 million dollars or 69 percent to 6.7 million dollars compared to 4 million dollars in the first nine months of the prior year.
The company is narrowing its guidance for the fiscal year ending February 2, 2019 and expects revenues to be in the range of 25 to 26 million dollars and adjusted EBITDA to be in the range of 9 to 10 million dollars.