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Friday, May 20, 2022

Cherokee Shares Jump on Solid Earnings

Cherokee Global Brands announced first-quarter net income higher than expectations, causing shares to jump more than 10 percent on Friday. The Sherman Oaks apparel brand licensing company reported net income of $3.57 million (41 cents a share) for the fiscal first quarter ended May 2, compared to $3.59 million (43 cents) for the same quarter a year earlier. Revenue increased 2.7 percent to $10 million Analysts on average expected earnings of 36 cents a share on revenue of $10 million, according to Thomson Financial Network. The company explained its results as a combination of lower sales and administrative expenses – which decreased 7.4 percent – and a tax provision. The company’s effective tax rate dropped to 27 percent compared to 36 percent for the same quarter last year. Chief Executive Henry Stupp said the quarter presented some challenges, including the closing of Target Corp. stores in Canada and the slowdown at the ports in Los Angeles. But new brands, including Everyday California and Sports Direct, helped drive sales. “Throughout the remainder of fiscal 2016 we will continue to promote the organic growth of our brands through additional category expansion and further international expansion,” he said in a statement. Cherokee announced its first-quarter results after market close on Thursday. Shares ended Friday up $2.51 or 10.6 percent to $26.10 on the Nasdaq.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

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