Carter’s(US:CRI)2025-04-25 10:17Financial Performance - Net sales for Q1 fiscal 2025 decreased by $31.7 million, or 4.8%, to $629.8 million compared to $661.5 million in Q1 fiscal 2024[11] - Diluted EPS for Q1 fiscal 2025 was $0.43, down from $1.04 in Q1 fiscal 2024; adjusted diluted EPS was $0.66 compared to $1.04 in the prior year[6] - Operating income fell by $28.9 million, or 52.6%, to $26.1 million, with an operating margin of 4.1%, down from 8.3% in the previous year[12] - Net income for the quarter was $15.5 million, down from $38.0 million in the same quarter last year[36] - For the fiscal quarter ended March 29, 2025, the net income was $15.5 million, a decrease of 59.3% compared to $38.0 million for the same period in 2024[47] - The diluted net income per common share for the quarter was $0.43, down from $1.04 in the prior year, reflecting a decline of 58.7%[47] - Adjusted EBITDA for the quarter was $48.6 million, compared to $69.6 million in the same quarter last year, representing a decrease of 30.2%[47] Sales Performance - U.S. Retail comparable net sales declined by 5.2%, while eCommerce outperformed physical stores[11] - International segment net sales declined by 4.9%, with strong demand noted in Canada and Mexico[5] - U.S. Retail segment net sales were $294.4 million, down 4.3% from $307.6 million year-over-year, while U.S. Wholesale segment net sales decreased by 5.3% to $250.1 million from $264.1 million[30] - Consolidated net sales for the fiscal quarter ended March 29, 2025, were $629.8 million, a decrease of 4.8% from $661.5 million for the same period in 2024[30] - The impact of foreign currency translation on consolidated net sales was a decrease of $6.4 million, leading to constant currency net sales of $636.2 million[52] - International segment net sales were $85.3 million, with a 4.9% decline due to foreign currency impact, but showed a 2.2% increase on a constant currency basis compared to the previous year[52] Operational Costs - The company incurred pre-tax expenses of $6.1 million related to the previous CEO's retirement and $3.2 million for operating model improvements[9] - The company experienced a significant increase in stock-based compensation expense, rising to $9.8 million from $5.2 million year-over-year[36] - The company incurred $9.3 million in adjustments to EBITDA, primarily related to leadership transition and operating model improvement costs[47] Cash Flow and Assets - Net cash used in operations increased to $48.6 million in Q1 fiscal 2025, compared to $25.6 million in the prior year[15] - Cash and cash equivalents at the end of the period were $320.8 million, a decrease from $412.9 million at the beginning of the period[36] - Total assets decreased to $2.33 billion from $2.43 billion at the end of the previous quarter[34] - The company reported a net cash used in operating activities of $48.6 million, compared to $25.6 million in the prior year[36] Shareholder Returns and Future Guidance - The company returned $29 million to shareholders through dividends in Q1 fiscal 2025[17] - The leadership transition and tariff uncertainties have led the company to suspend forward-looking guidance[20] - The company plans to evaluate future capital distributions based on business conditions and financial performance[17] - The company allocated $285,000 to participating securities, compared to $691,000 in the previous year, indicating a reduction in this allocation[47] - The company has excluded $8.2 million in after-tax expenses from its adjusted results for the fiscal quarter ended March 29, 2025[47]