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 ...

Financial Data and Key Metrics Changes - Net sales for Q4 2022 were $912 million, a decline of 14% year-over-year, primarily due to high inflation impacting consumer spending and aggressive inventory management by wholesale customers [41][41][41] - Adjusted operating income for Q4 was $119 million, maintaining an adjusted operating margin of 13%, comparable to the prior year [70][70][70] - Full year adjusted operating margin was 12.1%, down from 14.4% in the previous year, reflecting higher ocean freight rates and inventory provisions [124][124][124] Business Line Data and Key Metrics Changes - U.S. retail sales declined 13% in Q4, with comparable sales also down 13%, against a strong growth of 15% in the same quarter last year [31][126][126] - International sales decreased by 12% in Q4, with a decline of 8% on a constant currency basis, while sales in Mexico grew by 11% [127][127][127] - U.S. wholesale adjusted operating margin was 12.7%, down from 14.1% the previous year, impacted by higher product costs and ocean freight rates [71][71][71] Market Data and Key Metrics Changes - The company expects the largest decrease in sales from U.S. wholesale customers, with a planned decline of about 10% for the year [8][8][8] - International sales are expected to be slightly lower, particularly in the Middle East, Central America, and Europe, but growth is anticipated in Brazil and Argentina [115][115][115] - The company plans to open over 50 new co-branded stores in 2023, which are expected to support online transactions and enhance market presence [33][33][33] Company Strategy and Development Direction - The company aims to capture market opportunities as competitors downsize, focusing on opening new stores and enhancing e-commerce capabilities [10][10][10] - Investments will continue in e-commerce, store growth, and distribution capabilities, with a focus on improving marketing personalization [49][49][49] - The company plans for gross margin expansion driven by improved pricing and inventory management capabilities, alongside a favorable trend in product costs [38][38][38] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation has significantly impacted consumer demand, with many families living paycheck to paycheck [6][6][6] - The company anticipates a return to more stable growth beginning in 2024, following a challenging 2023 [35][35][35] - Management expressed optimism about improved supply chain performance and on-time deliveries, which are expected to enhance customer experience [110][110][110] Other Important Information - The company generated over $300 million in operating cash flow in Q4, bringing the full year total to $88 million, which declined due to lower earnings and higher inventory [20][20][20] - The company returned $418 million to shareholders in 2022, including $118 million in dividends and $300 million in share repurchases [69][69][69] - The Little Planet brand saw sales double last year, with plans for expanded wholesale distribution [36][36][36] Q&A Session Summary Question: What is the outlook for the first quarter? - Management expects the first quarter to represent the largest decrease in sales and earnings compared to 2022, with performance expected to improve in subsequent quarters [26][26][26] Question: How is inventory management being handled? - The company has a good inventory position in wholesale, with less carryover and a better mix of inventory planned for the year [55][55][55] Question: What are the expectations for gross margin in the first quarter? - Management anticipates good gross margin expansion in the first quarter, with stronger performance expected in the second half of the year [62][62][62]

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%) | --- | --- | --- | --- | --- | --- | |-------------------------|-----------|------------------------------------------|-----------|------------|------------------ ...

Carter’s, Inc. (NYSE:CRI) Q4 2021 Earnings Conference Call February 25, 2022 8:30 AM ET Company Participants Michael Casey - Chairman and Chief Executive Officer Richard Westenberger - Executive Vice President and Chief Financial Officer Conference Call Participants Chris Nardone - Bank of America Kelly Crago - Citigroup Susan Anderson - B. Riley Jim Chartier - Monness, Crespi, Hardt Jay Sole - UBS Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this pag ...

ITT carter's, inc. Fourth Quarter/Fiscal Year 2021 Results & Business Update February 25, 2022 Fourth Quarter 2021 Results (GAAP Basis) Diluted EPS $2.31 $2.26 2% | --- | --- | --- | --- | --- | --- | |----------------------|--------------------------------------------------|--------------|----------------------|------------|------------------------| | | $ in millions, except EPS \nQ4 2021 (13 weeks) | % of Sales | Q4 2020 (14 weeks) | % of Sales | Increase / (Decrease) | | Net sales | $1,062 | | $990 | | 7 ...