CHEROKEE’S NET UP 68.6 PERCENT
VAN NUYS, Calif. — Cherokee, the licensor of the Cherokee and Sideout brands, racked up a 68.6 percent surge in second-quarter profits on a 30.8 percent gain in revenues.
Profits in the quarter ended July 31 soared to $2.2 million, or 25 cents a share, from $1.3 million, or 15 cents, a year ago. Royalty revenues jumped to $6.4 million from $4.9 million.
According to the company, retail sales of merchandise bearing the Cherokee brand rose 19 percent in the quarter to $319 million from $268 million a year ago. Zellers, the Canadian discounter, accounted for more than $25.6 million in sales of Cherokee merchandise in the period and plans to open stand-alone Cherokee stores in locations that don’t have a nearby Zellers, Cherokee said. The first unit is expected to open this fall.
Sales of merchandise carrying its recently acquired Sideout brand, launched at retail in the spring, met with “stronger-than-anticipated results,” Cherokee said.
In the latest quarter, Cherokee’s board authorized the repurchase of up to 1 million shares, or about 11.5 percent, of its outstanding common stock. Repurchases will be made from time to time in the open market, the company said.
Cherokee also said it has entered into an agreement with Metro-Goldwyn-Mayer Home Entertainment to assist it in engineering strategic licensing agreements. In addition, the company entered into a nonexclusive licensing arrangement for the “King of the Beach” brand and trademark with the Association of Volleyball Professionals.
As part of the deal, Cherokee will share in the revenues for the “King of the Beach” Tournament to be held Sept. 17-18 in Las Vegas.
In the 26-week period, earnings climbed 45.3 percent to $4.8 million, or 55 cents a share, from $3.3 million, or 38 cents, a year ago. Royalty revenues improved 30.7 percent to $13.3 million from $10.2 million.