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Cherokee Inc. (CHKE) Message Board

  • photofool321 photofool321 Nov 25, 2009 8:20 PM Flag

    So when does the dividend get chopped again?

     

    Has to be soon, yes?

    Because they certainly can't afford this $2-per-year crap much longer....

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    • If you go back to my post in June I was just a bit early. CHKE rose then has dropped since October. I thought the drop would occur before then, but estimated 2 quarters might be where the weakness shows. I am surprised they kept the dividend this quarter. It is steadily draining money. However, CHKE seems to have no plan to SPEND to grow. They do not acquire brands or licenses at significant cost. They do not market the brand names. Therefore, CHKE can still keep the div for awhile and just continually drain cash until they get to a low operational level. The dividend will drop eventually. I expect after the Xmas quarter it goes down, unless retail has a great year end.

      The China deal does not seem good to me. One caveat is if it allows them to get to more chains in China it might play out. But the chain they are with is a nonevent. They are a food mart that carries cheap clothes, thus LOWERING the brand potential in China. If they were a Target of China (Lottemart), I'd be buying- but they are NOT. Also, in my experience, the Chinese will not be paying traditional royalties. I expect the deal is not nearly as profitable as prior US deals and many of the other deals. This will continue to strain the dividend.

      If they suspend the dividend for one year, they save 20+M. If they 1/2 it, they could plow that into advertising the brand and add coupons, maybe the retailers see value in CHKE grow, thus increasing the deals. I'd keep my stock at $17 if they implemented this. Then I'd have a stock with a 5% dividend with growth potential. Sounds good to me. As of now, no holdings in CHKE since June.

    • div cut is prised in

      it's the future earnings that matter most and CHKE has made some nice deals

      they are producing a nice cash flow even in this tough environment

      all IMHO

    • Yep......been hearing that for three years now. And here it gets paid again! Go figure

 
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