Carter's, Inc. (CRI) has faced a challenging period in 2024, with its shares dropping 21.5% over the past month. This decline contrasts with the broader performance of the Zacks Shoes and Retail Apparel industry, which saw a moderate decrease of 3.7%. The company's dismal performance is due to the curtailed consumer discretionary spending, owing to rising inflation and higher interest rates.Image Source: Zacks Investment ResearchCarter’s current stock price of $52.84 reflects a 40% discount from its 52-week ...

Normally, we would expect to see a boost in stock price after such a large earnings beat, but the reality is that the details play a much more important role than what we see in the Seeking **Effective 8/20/2023 the in-depth retirement article series for John & Jane will be available in video format on YouTube. Please consider watching, commenting, and subscribing as I expand on my analysis. I am trying to keep the videos about 30 minutes or less but hope they will be even more interesting for those who hav ...

Carter's, Inc. (NYSE: CRI ) presented Q3 2024 results last week, with sales falling 4%, arresting what seemed like a looming crisis with comparable sales falling double digits in July 2024. The price paid for that recovery was Long-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the co ...

Carter's, Inc. (CRI) announced its third-quarter 2024 results, wherein the top and the bottom line beat the Zacks Consensus Estimate, while both decreased from the year-ago period's actuals. The top line remained soft on weak sales across the U.S. Retail, International and U.S. Wholesale segments. Also, the impacts of inflation, which led to reduced spending and currency headwinds, hurt the performance. Carter's adjusted earnings per share (EPS) of $1.64 surpassed the Zacks Consensus Estimate of $1.29. Howe ...

Financial Data and Key Metrics - Q3 2024 net sales were $758 million, down 4% YoY, with U.S. retail sales declining 6% and international sales down 9% [22][28] - Operating income was $77 million, with an operating margin of 10.2%, down from 13% YoY [22][30] - Adjusted EPS was $1.64, down 11% YoY, driven by lower sales and higher marketing investments [22][26] - Inventory levels improved, with a 2% decline YoY, and the company ended the quarter with over $1 billion in liquidity [34] - Full-year sales guidance is reaffirmed at $2.785 billion to $2.825 billion, with U.S. retail sales expected to decline 8% [46] Business Segment Performance - U.S. retail sales declined 6%, with eCommerce comps improving from -14% in H1 to -5% in Q3 [28][29] - U.S. wholesale sales were flat YoY, with strong growth in exclusive brands offsetting declines in department store and off-price sales [31] - International sales declined 9%, with Canada seeing a high single-digit decrease due to warmer weather and economic pressures, while Mexico grew 9% [32] - Baby apparel sales grew 2% YoY, contributing over 50% of total apparel sales, while toddler sales were slightly lower [5] Market and Competitive Trends - The company observed a "barbell-shaped" trend in U.S. retail sales, with strong growth in opening price point and premium products, but a 10% decline in mid-tier offerings [6] - Competitive pricing strategies, including $40 million in price reductions and $10 million in marketing, helped improve U.S. retail trends, with comps improving from -13% in July to -5% in August and September [7][8] - The company gained market share in baby and toddler apparel, which represents over 80% of its business [72] Strategic Initiatives and Outlook - The company is shifting its product assortment to increase penetration of opening price point and premium products by 10 points each, while reducing mid-tier offerings [38][39] - Investments in technology, including AI-driven marketing personalization and a new inventory allocation system, are expected to improve customer acquisition and retention [14][44] - The company plans to open 40 high-margin stores and close 30 low-margin stores in 2024, with 98% of stores cash flow positive over the past 12 months [13] - Full-year adjusted operating income is expected to be $240 million to $260 million, with adjusted EPS raised to $4.70 to $5.15 due to a lower tax rate and reduced interest expenses [46] Management Commentary on Market Conditions - Management noted that inflation and higher interest rates continue to weigh on demand from families with young children, particularly in the U.S. and Canada [28][32] - The company believes its value proposition, with average retail price points under $11, positions it well in an inflationary environment [19] - Weather trends, particularly cooler temperatures, have improved holiday-related apparel sales in recent weeks [6][81] Q&A Session Highlights Question: Gross Margin Pressure and Pricing Strategy - Gross margin declined 60 bps in Q3, with a 170 bps impact from pricing investments, and is expected to decline 200 bps in Q4 due to mix shifts and continued pricing actions [50][51] - The company focused on reducing prior season inventory in Q3, with prices on prior season goods down 10%, while in-season goods saw only a 3% price reduction [52] Question: U.S. Retail Trends and ROI of Pricing Investments - U.S. retail comps improved from -13% in July to -5% in August and September, with October comps running down less than 5% [47][54] - The ROI of pricing investments is measured through unit volume growth, transaction increases, and improved conversion rates [55][58] Question: Wholesale Business and Spring/Summer 2025 Orders - Wholesale demand for spring/summer 2025 is showing modest growth, with exclusive brands expected to outperform non-exclusive partners [62] - Off-price sales are forecasted to decline nearly 50% in 2024, with low single-digit growth expected in U.S. wholesale sales excluding off-price [16] Question: Share Repurchase Pause and Capital Allocation - The company has paused share repurchases due to a reduction in free cash flow forecasts, with plans to revisit capital allocation in 2025 [70][71] Question: Assortment Shift and Gross Margin Impact - The shift towards opening price point and premium products is not expected to significantly impact gross margins, as the mid-tier segment has been underperforming [77][78] Question: Weather Impact and Inventory Management - Warmer weather in late Q3 slowed sales, but the company made significant progress in clearing spring and summer inventory, improving the inventory position heading into Q4 [80][81] Question: Tariff Risks and Sourcing Strategy - Less than 5% of the company's finished goods are sourced from China, with diversification into countries like Vietnam, Cambodia, and India reducing exposure to potential tariffs [82]

Carter's (CRI) came out with quarterly earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.29 per share. This compares to earnings of $1.84 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 27.13%. A quarter ago, it was expected that this maker of children's apparel and accessories would post earnings of $0.45 per share when it actually produced earnings of $0.76, delivering a surprise of 68.89%.Over the last ...

EXHIBIT 99.1 carter's, inc. Contact: Sean McHugh Vice President & Treasurer (678) 791-7615 Carter's, Inc. Reports Third Quarter Fiscal 2024 Results • Net sales $758 million vs. $792 million in Q3 2023 • Operating margin 10.2% vs. 11.8% in Q3 2023; adjusted operating margin 10.2% vs. 12.2% in Q3 2023 • Diluted EPS $1.62 vs. $1.78 in Q3 2023; adjusted diluted EPS $1.64 vs. $1.84 in Q3 2023 • Returned $138 million to shareholders through dividends and share repurchases through the first three quarters of fisca ...

Carter's, Inc. (CRI) is scheduled to release third-quarter 2024 results on Oct. 25, before the opening bell. The branded marketer of apparel exclusively for babies and children in North America is likely to witness a decline in the top and bottom lines when it reports the quarterly numbers.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The Zacks Consensus Estimate for third-quarter revenues is pegged at $748 million, indicating a decline of 5.5% from the figure reported in the year ...

Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in CRI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking ...

Carter's Inc. (CRI) has shown a steady growth in recent times, with its stock price increasing by 10.5% in just a month. This rise is attributed to the launch of its "More Than Just Cute" back-to-school campaign, which focuses on the practical features of its children's apparel. By collaborating with the agency Mischief for the first time, Carter's is targeting millennial and Gen Z parents. The campaign's emphasis on functionality and style helps the company connect with these younger parents. However, Cart ...