Carter's Stock Plunges to 52-Week Low: Time to Buy or Stay Cautious?

Core Insights - Carter's, Inc. (CRI) has reached a new 52-week low of $49.65, closing at$52.21, reflecting a 68% discount from its 52-week high of $88.03, indicating a challenging year for the company [1] - The stock has been trading below both the 200-day and 50-day simple moving averages (SMA), reinforcing a bearish outlook [2] - Over the past six months, CRI shares have lost 15.9%, underperforming the Zacks Shoes and Retail Apparel industry, which declined by 4.4% [4] Company Performance - CRI is facing challenges from inflation and high interest rates, which have pressured consumer spending and impacted overall performance [7] - The company has reported declining sales in recent quarters, with notable declines in U.S. Retail and International segments [8] - Higher selling, general and administrative (SG&A) expenses as a percentage of net sales are being driven by fixed-cost deleverage from lower sales and rising distribution costs [9] Future Outlook - CRI anticipates a decline in net sales and profitability for the fourth quarter of 2024, with U.S. Retail sales projected to decline in the high single to low double digits [10] - For 2024, the company expects a decline in net sales, adjusted operating income, and earnings per share compared to 2023 due to ongoing macroeconomic pressures [11] Strategic Initiatives - Carter's is implementing pricing strategies to enhance profitability and has seen favorable customer responses to its product offerings [12] - The company is utilizing omnichannel capabilities effectively, with 38% of digital orders fulfilled through stores, improving margins [14] - Investments in AI-driven marketing personalization are strengthening e-commerce performance and boosting key sales metrics [15]