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]

Inventory Management - For fiscal year 2022, the company's inventories increased by $96.8 million, or 14.9%, to $744.6 million, primarily due to longer holding periods and planned earlier inventory ownership [65]. - "Pack and hold" inventory increased by $70.1 million, or 240.6%, to $99.2 million, reflecting the company's strategy to manage excess inventory [65]. - The company has taken actions to align inventory with planned demand, including canceling and reducing inventory purchases [65]. Retail Operations - The company operates 993 company-owned retail stores and approximately 19,350 wholesale locations, along with eCommerce websites in North America [63]. - The company has exclusive brands available at major retailers, including Child of Mine at Walmart and Just One You at Target [62]. Market Position - The approximate aggregate market value of the voting stock held by non-affiliates was $2.68 billion as of July 2, 2022 [71]. - The company is the largest branded marketer of young children's apparel in North America, owning brands such as Carter's and OshKosh B'gosh [66]. - The company's market share data is based on the NPD Group's Consumer Panel Track for the twelve-month period ended December 2022 [77]. Fiscal Year Information - Fiscal 2022 contained 52 weeks, consistent with fiscal 2021, which also contained 52 weeks [78]. - The company's gross profit and gross margin may not be comparable to other entities due to different metric definitions [64].

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 ...