UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to __________ Commission file number: 001-31829 CARTER'S, INC. (Exact name of registrant as specified in its charter) incorporation or organizat ...

Financial Data and Key Metrics Changes - The company reported net sales of $600 million in the second quarter, a decline of 13% year-to-date compared to the previous year [11][87] - Adjusted diluted earnings per share were $0.64, down from $1.30 in the prior year [7] - The effective tax rate increased to 23.6%, up about 200 basis points from last year [7] - Operating income for the second quarter was $38 million, ahead of forecasts due to lower spending [62] Business Line Data and Key Metrics Changes - U.S. retail sales declined 15% in the second quarter, with comparable sales down 16% [44][37] - U.S. wholesale sales decreased by 17%, although this was better than forecasted [8] - International sales were down 8%, primarily due to lower demand in Canada [93] - The company expects a high single-digit percentage growth in sales to its wholesale partner in Brazil, Riachuelo [10] Market Data and Key Metrics Changes - The company forecasts U.S. wholesale sales of $1 billion, down 7% from last year [28] - In Canada, sales are expected to decline, while double-digit percentage growth is anticipated in Mexico [30] - The average household income of target consumers is $75,000, with many families pulling back on spending due to inflation [17] Company Strategy and Development Direction - The company plans to focus on margin preservation and cash flow while investing in growth strategies [35] - There is an emphasis on expanding the distribution of the new Little Planet brand and opening about 50 retail stores in high-traffic areas [52][73] - The company aims to maintain a competitive pricing strategy, keeping prices within $1 or $2 of private label competitors [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of the year, expecting improved sales and earnings trends compared to the first half [15][34] - The company is cautious about the impact of inflation and higher interest rates on consumer demand [106] - Management noted that the inventory position is in good shape to support second-half demand [104] Other Important Information - The company has reduced borrowings and interest expenses, returning over $100 million to shareholders through dividends and share repurchases [22] - The supply chain has been a source of strength, with excellent on-time shipping performance and lower ocean freight rates benefiting second-half earnings [31] Q&A Session Summary Question: Can you elaborate on the gross margin outlook for the fourth quarter? - Management indicated that over half of the gross margin expansion is related to lower inbound transportation costs, with improved margins expected in the retail business [83][135] Question: What is the expectation for the wholesale replenishment business in the second half? - Management stated that replenishment sales are planned to be up over 10% in the second half, contrasting with a planned decline in seasonal demand [84] Question: How does the current inventory situation compare to competitors? - Management noted that larger retailers are running leaner inventories, which has led to better sell-throughs and improved price realization [114][116] Question: What is the outlook for the wholesale business moving forward? - Management expressed confidence in the wholesale business, expecting to resume growth in early 2024 based on current bookings [123]

Second Quarter 2023 Results & Business Update July 28, 2023 Second Quarter 2023 Results (GAAP Basis) | --- | --- | --- | --- | --- | --- | |-------------------------------------|-------------|----------------|-------------|--------------|--------| | | Q2 \n2023 | % of \nSales | Q2 \n2022 | % of \nSales | Change | | Net sales | $600 | | $701 | | (14%) | | Gross profit | 292 | 48.6% | 331 | 47.3% | (12%) | | Royalty income | 4 | 0.7% | 6 | 0.8% | (23%) | | SG&A | 259 | 43.1% | 261 | 37.3% | (1%) | | Operating ...

Financial Data and Key Metrics Changes - The company reported net sales of $696 million, a decline of 11% year-over-year, but exceeded previous guidance due to stronger-than-planned demand in the U.S. Wholesale business [81][98] - Adjusted operating income was $58 million, representing an adjusted operating margin of 8.3%, down from 13.1% in the prior year [85][90] - Adjusted diluted earnings per share were $0.98 compared to $1.66 in the prior year [87] Business Line Data and Key Metrics Changes - U.S. Retail sales declined 12%, with comparable sales down 13%, in line with expectations [120] - Wholesale sales decreased by 9%, reflecting a conservative stance from customers regarding inventory commitments [107][72] - International sales declined by 14%, with a mid-single-digit decrease in Canada, while Mexico saw double-digit growth [121][76] Market Data and Key Metrics Changes - The company noted that the birth trends in the U.S. are stable, with an improving outlook for births, which supports demand for baby apparel [34][135] - The company is the largest supplier of young children's apparel in North America, holding a significant market share compared to private label brands [46][70] Company Strategy and Development Direction - The company plans to focus on productivity, earnings, and cash flow, with expectations for improved performance in the second half of the year [128] - There is a strategic emphasis on maintaining lean inventories to improve sell-throughs and reduce promotional activity [116][155] - The company aims to expand its presence in international markets, particularly in Mexico and Brazil, through co-branded stores and e-commerce [76][78] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, anticipating better trends in sales and profitability due to lower product and freight costs [130][65] - The company acknowledged the impact of inflation and high interest rates on consumer demand but remains confident in the resilience of consumers [79][149] - Management noted that the market for baby apparel is expected to stabilize, with a potential for improvement as inflation moderates [135][79] Other Important Information - The company has successfully reduced inventories, leading to improved cash flow, and expects to continue this trend throughout the year [63][88] - The company has reaffirmed its sales and earnings outlook for 2023, targeting approximately $3 billion in sales and adjusted EPS of $6.15 [139] Q&A Session All Questions and Answers Question: Can you provide insights on the impact of ocean freight costs? - Management indicated that ocean freight costs were up in the first quarter but not as significantly as the previous year, with expectations for substantial relief in the second half [146][142] Question: How does the size of the kids' market in Mexico compare to Canada? - The market in Mexico is larger, with significant growth potential as the company expands its co-branded stores [157] Question: What are the expectations for retail sales outlook adjustments? - The company reduced its retail sales outlook by 1%, reflecting a slower start to spring sales, with adjustments primarily affecting the second quarter [148]

As of the end of fiscal 2022, approximately 160 employees were unionized employees, all of whom were in Mexico. We believe we have good labor relationships with our employees. 8 Health and Safety 9 The ongoing COVID-19 pandemic and other global crises have had and may in the future have a significant adverse ef ect on our business, financial condition, and results of operations. Global crises, including political instability or other global events that result in the disruption of trade, the production and d ...

Carter's, Inc. (NYSE:CRI) Q4 2022 Earnings Conference Call February 24, 2023 8:30 AM ET Company Participants Michael Casey – Chairman and Chief Executive Officer Richard Westenberger – Executive Vice President and Chief Financial Officer Brian Lynch – President and Chief Operating Officer Conference Call Participants Warren Cheng – Evercore ISI Jim Chartier – Monness, Crespi, Hardt & Co. Jay Sole – UBS Equity Tom Nikic – Wedbush Securities Operator Welcome to Carter's Fourth Quarter Fiscal 2022 Earnings Con ...

Fourth Quarter Reconciliation of Adjusted Fiscal Quarter Ended | --- | --- | --- | |-----------------------------------------------------------------------------|-------------------|-----------------| | | December 31, 2022 | January 1, 2022 | | Weighted-average number of common and common equivalent shares outstanding: | | | | Basic number of common shares outstanding | 37,453,066 | 41,335,042 | | Dilutive effect of equity awards | 11,001 | 136,992 | | Diluted number of common and common equivalent shares o ...

Carter's, Inc. (NYSE:CRI) Q3 2022 Results Conference Call October 28, 2022 8:30 AM ET Company Participants Michael Casey - Chairman and Chief Executive Officer Richard Westenberger - Executive Vice President and Chief Financial Officer Brian Lynch - President and Chief Operating Officer Sean McHugh - Vice President and Treasurer Conference Call Participants Warren Cheng - Evercore ISI Tom Nikic - Wedbush Securities Jay Sole - UBS Ike Boruchow - Wells Fargo Chris Nardone - Bank of America Operator Welcome to ...

Second Quarter Fiscal 2022 Results & Business Outlook July 29, 2022 Second Quarter 2022 Results (GAAP Basis) Diluted EPS $0.93 $1.62 (43%) Weighted average shares outstanding 39 44 (10%) EBITDA1$73 10.4% $131 17.5% (44%) $ in millions, except EPS | --- | --- | --- | --- | --- | --- | |--------------------------------|-------|-------|-------|-------|--------| | | Q2 | % of | Q2 | % of | | | | 2022 | Sales | 2021 | Sales | Change | | Net sales | $701 | | $746 | | (6%) | | Gross profit | 331 | 47.3% | 369 | 49 ...

carter's | --- | --- | --- | --- | |-------------------------------------|-------|-------|-------| | | | | | | First Quarter Fiscal 2022 Results & | | | | | Business Outlook | | | | | April 29, 2022 | | | | | | | | | | | | | | First Quarter 2022 Results (GAAP Basis) Weighted average shares outstanding 40 43 (7%) EBITDA1$117 15.0% $153 19.4% (23%) | --- | --- | --- | --- | --- | --- | |-------------------------|-----------|------------------------------------------|-----------|------------|------------------ ...