Cherokee Q4 revenues rise 4.1 percent on Flip Flop acquisition

GAAP revenues of 7.8 million dollars increased 4.1 percent in the fourth quarter at Cherokee Global Brands, compared to 7.5 million dollars in the prior-year period. The company said that the increase in GAAP revenues partially reflects the contribution of Flip Flop Shops, which the company acquired in October 2015. Annual GAAP revenues of 34.7 million dollars however decreased 0.9 percent as compared to 35 million dollars in the prior year.

“Reflecting on the fourth quarter and full year, we were pleased with our ability to successfully navigate through the many changes that impacted our business, and to position Cherokee Global Brands for further growth. Our ability to do so is a testament to our 360-degree platform, our strong brand portfolio, and our newly-acquired businesses,” noted Henry Stupp, Chief Executive Officer.

Fourth quarter and full year result highlights

Fourth quarter operating income totalled 1.9 million dollars, or 24 percent of GAAP revenues, which is down from 2.7 million dollars, or 36 percent of GAAP revenues, in the prior-year period. GAAP net income totalled 1.4 million dollars, or 0.16 dollar per diluted share. This compares to 1.7 million dollars, or 0.19 dollar per diluted share, in the prior-year period.

The company said annual GAAP revenues declined primarily due to the closing of Target Canada and the transition from Tesco to Argos, in addition to the effect of foreign exchange rates on international royalties. This decrease was partially offset by revenues from the October 2015 acquisition of Flip Flop Shops.

Operating income totalled 13.3 million dollars, or 38 percent of GAAP revenues, compared to 15.4 million dollars, or 44 percent of GAAP revenues, in the prior year. GAAP net income totalled 8.4 million dollars, or 0.95 dollar per diluted share.

“We enter fiscal 2017 with a strong, unlevered balance sheet that will allow us to capitalize on prudent acquisitions while continuing to drive organic growth, particularly in the U.S. as we move forward with our licensing partners for our namesake Cherokee brand. As we continue to add domestic licensees, our efforts are focused on identifying and on-boarding new retail partners to ensure continued product placement for spring 2017,” added Stupp.