Cherokee reports Q1 non-GAAP net loss of 0.07 dollar per share

Cherokee Global Brands’ consolidated revenues for the fiscal 2018 first quarter ended April 29, 2017, including the contribution from Hi-Tec, were 11.1 million dollars. On a year-over-year comparable basis, Cherokee Global Brand revenues, excluding Hi-Tec, were 5.2 million dollars, a decrease of 51.4 percent from 10.7 million dollars in the prior year period. GAAP net loss totalled 3.3 million dollars or 0.25 dollar per diluted share, compared to net income of 2.6 million dollars or 0.29 dollar per diluted share, in the prior-year period. Non-GAAP net loss totalled 0.9 million dollars or 0.07 dollar per diluted share compared to net income of 3 million dollars or 0.34 dollar per diluted share, in the prior-year period.

“Operationally, fiscal 2018 is off to a solid start,” said Henry Stupp, CEO of Cherokee Global Brands in a press release, adding, “During the first quarter, we continued to make progress in diversifying our global points of distribution and building upon the relevance of our high-equity brands through category expansion and new format initiatives. Today, our business model is more balanced and demonstrative of our go-forward strategy whereby revenue contribution will be more evenly split across brand, product category and geography.”

First quarter result highlights

The company said drop in comparable sales was due to the decrease in North America revenues related to the Cherokee brand as the company continues to transition to new wholesale licensees. During the quarter, the company said, some of the decrease was offset by global revenue increases, particularly in Europe, Asia and South Africa as the demand for Cherokee-branded products continues to grow.

Hi-Tec revenues totalled 5.9 million dollars and included 4.3 million dollars in indirect product sales related to distribution and government contracts, as well as 1.7 million dollars in licensing revenues stemming from new and existing licensing deals for the Hi-Tec portfolio of brands. Gross profit from Hi-Tec indirect product sales was 1.3 million dollars, and is inclusive of 3 million dollars in cost of goods sold.

GAAP operating loss totalled 2.1 million dollars, compared with GAAP operating income of 4.3 million dollars in the prior-year period. Non-GAAP operating income for the first quarter of fiscal 2018 was 0.1 million dollars or 1 percent of revenues, compared with 5 million dollars or 47 percent of revenues, in the prior year period. Adjusted EBITDA was 0.7 million dollars compared to 5.4 million dollars in the prior year period.

Picture:Facebook/Hi-Tec