Cherokee Global Brands beat analyst estimates for fourth-quarter earnings and sales.
Net income for the quarter totaled $1.4 million, or 16 cents a diluted share, down from $1.7 million, or 19 cents, a year ago. Due diligence and business costs were included in the results. Earnings came in 3 cents ahead of the 13 cents analysts expected, according to FactSet, and helped push shares of Cherokee up more than 7 percent in after hours trading to $18.10.
Sales for the three months ended Jan. 30 increased 4.1 percent to $7.8 million from $7.5 million a year earlier. This beat the FactSet estimate for sales of $7.37 million. The sales reflected the contribution of Flip Flop Shops that was acquired in October 2015.
For the full year, the company’s revenues decreased 0.9 percent to $34.7 million from last year’s $35 million. Net income for the full year totaled $8.4 million, or 95 cents per diluted share. The decrease in revenues was related to the closing of Target Canada and the company’s transition away from Tesco toward a new partnership with Argos.
Legal and business development costs reduced the earnings by $1.2 million, or 9 cents. This compared with the previous year’s net income of $9.8 million, or $1.15 a diluted share.
“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,” said Henry Stupp, chief executive officer.
Cherokee did not give any guidance for the year, but Stupp did make some comments about the coming year.
“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,” Stupp said. “As we continue to add domestic licensees, our efforts are focused on identifying new retail partners to ensure continued product placement for spring 2017.”