Shares of Cherokee Inc. plummeted 25% toward a 20-year low in premarket trade Friday, after the marketing and fashion brands company reported a surprise fiscal first-quarter loss. Separately, the company said it had failed to comply with certain covenants in the Cerberus credit facility, but Cerberus agreed to not exercise its rights or remedies under the facilities agreements through July 7. Cherokee said it was in "advanced discussions" with Cerberus to amend the facility, but if an amendment agreement can't be reached, Cerberus will have the right to accelerate the debt. The company, which brands include Tony Hawk, Hi-Tec and Sideout, reported late Thursday a net loss of $3.3 million, or 25 cents a share, compared with a profit of $2.6 million, or 29 cents a share, in the same period a year ago. Excluding non-recurring items, the adjusted loss per share was 7 cents, missing the FactSet consensus for a per-share profit of 13 cents. Total revenue rose to $11.1 million from $10.7 million, while royalty revenue fell to $6.8 million from $10.7 million. The stock has tumbled 26% year to date through Thursday, while the S&P 500 has gained 7.6%.
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