Cherokee Inc. reported net income of $2.9 million, or $0.33 per diluted share, in the first quarter of 2010. The company earned $3.8 million, or $0.43 per diluted share, in the corresponding quarter in 2009.

Cherokee Inc. said that royalty revenues also fell on a year over year basis, from $8.9 million in the first quarter of 2009 to $8.2 million in the quarter that just ended.

The management of Cherokee Inc. said that the lower net income in the first quarter of 2010 relative to last year’s first quarter was caused by a lower than expected effective tax rate of 33.7% in the first quarter of 2009. The effective tax rate in the first quarter of 2010 was 40.3%.

Cherokee Inc. also reported a strong balance sheet at the end of the first quarter of 2010, with cash and cash equivalents of $7.4 million and no long or short-term debt.

Cherokee Inc. is headquartered in Van Nuys, California, and owns and licenses dozens of brands across the apparel and consumer segments. The company’s brands generate over $4 billion in sales on an annual basis.

For more information on the company, go to www.thecherokeegroup.com

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