NEW YORK, NY / ACCESSWIRE / August 7, 2018 / Shares of Cherokee were exploding on Monday after Wall Street learned that the company had announced debt refinancing. Shares of Newell weren’t as fortunate, sinking down towards a 5.5-year low after warning that tariffs would affect the company’s full year results.
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Newell Brands Inc.
Newell Brands Inc. shares closed down 14.34% on Monday with roughly 34.6 million shares traded. The consumer goods company with brands that include Mr. Coffee, Yankee Candles, and Sharpie, saw its shares fall toward a 5.5-year low after reporting second quarter results and warning that tariffs could significantly take away from full-year results. The company posted a decline in both sales and profit for the second quarter. Net income declined to $131.7 million, or 27 cents a share, from $223.0 million, or 46 cents a share, in the same period a year ago. Excluding special items, normalized earnings per share came to 82 cents, four cents above analysts' estimates. According to Chief Executive Michael Polk, as tariffs currently stand, the annualized impact on results could be as much as $100 million. He stated, "While we’ve announced incremental pricing [increases], we’re simultaneously appealing the application, the bulk of these tariffs to the U.S. trade representative office and are considering...possible alternative sourcing options. Virtually, every business has been impacted with the greatest exposure on baby, appliances and food.”
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Cherokee Inc. was up over 112% by the close on Monday with a little over 15 million shares traded. Average trading volume for the stock is just under 400,000 shares. The global brand marketing platform announced that it has replaced its former credit facility with a new $40 million three-year financing agreement with Gordon Brothers Finance Company and Gordon Brothers and new subordinated promissory notes with existing subordinated lenders. CEO Henry Stupp remarked, "Completing this refinancing on favorable terms marks a significant step forward for the company and our global licensing partners and shareholders. The new facility increases our financial flexibility, adding over $5 million in liquidity which will support the company’s ability to realize its strategic objectives. Since the start of fiscal 2019, we have hit several benchmarks, including strengthening of our management team, successfully refining our operations and divesting non-royalty businesses. We are now better positioned to realize the full potential of our high-growth brand opportunities with the support of this more focused and efficient infrastructure. On behalf of my associates and our board of directors, I offer thanks to key stakeholders and licensees and retail partners who remained committed to Cherokee Global Brands’ success throughout this process.”
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