Cherokee (CHKE) Misses Q2 EPS by 2c, Target Doesn't Renew License of Cherokee Brand

Cherokee (NASDAQ: CHKE) reported Q2 EPS of $0.22, $0.02 worse than the analyst estimate of $0.24. Revenue for the quarter came in at $8.5 million versus the consensus estimate of $8.62 million.

Cherokee Global Brands also announced that Target Corporation has elected not to renew the license of the Cherokee brand in the US, which will expire at the end of its current term on January 31, 2017. The Target license, including the existing royalty obligations, will remain in effect and continue to generate revenues to Cherokee in Fiscal 2016 and 2017. The Company does not expect the non-renewal to have any material impact on Cherokee Global Brands' revenue in Fiscal 2016. Cherokee Global Brands anticipates that it will establish new channels for Cherokee branded products in the U.S. that will be available in Fiscal 2018. The license agreement with Target for the Liz Lange brand remains in place at this time. The non-renewal does not have any impact on other licenses of the Cherokee brand to other partners around the world.

"Target Corporation has been a great partner for nearly 20 years. Moving forward, Cherokee Global Brands is in a strong position to enter into new platform partnerships that will expand Cherokee's presence in the U.S.," said Henry Stupp, Chief Executive Officer. "Large-scale retailers and wholesalers have frequently expressed interest in the Cherokee brand based on its multi-category relevance and high consumer awareness. In the end, though, consumers make brands successful, and we know that Cherokee has a unique connection with many millions of consumers in the U.S. and around the globe."

Mr. Stupp continued, "The transitions in our business continue to present exciting opportunities. We now have a full-spectrum Cherokee platform partnership with Sears Canada after transitioning from a previous partner. We have achieved a similar scale of success with Argos in both the UK and Ireland after transitioning from another partner. Retail moves fast, and agility is the hallmark of Cherokee Global Brands' approach as we actively identify and engage with desirable new licensing partners that fully leverage our platform capabilities. Cherokee is a strong family brand with a proven track record of forging productive, profitable, multi-category partnerships around the globe."

For earnings history and earnings-related data on Cherokee (CHKE) click here.

You May Also Be Interested In

• Blackhawk Network (HAWK) Reports Q2 Loss of $0.07; Offers Guidance
• Lument Finance Trust (LFT) Misses Q2 EPS by 17c
• MapLight Therapeutics, Inc. (MPLT) Misses Q2 EPS by 33c