Carter’s to cut 150 stores and 15% of office jobs amid tariff challenges

Core Insights - Carter's plans to close 150 stores across North America by 2028 due to financial strain from tariffs [1][5] - The company will reduce its office workforce by 300, representing a 15% cut, by the end of 2025 [1] - The annual gross pre-tax impact of additional import duties is estimated to be between $200 million and $250 million [2] Financial Performance - In the third quarter of 2025, net sales decreased by 0.1% to $757.8 million, down from $758.5 million in the same period of the previous fiscal year [2] - The US wholesale segment saw a decline of 5.1%, while gains were noted in US retail and international segments [3] - Operating income fell by 62.2% to $29.1 million, with operating margin shrinking to 3.8% from 10.2% a year earlier [3] Net Income and Future Outlook - Net income for the quarter was $11.6 million, or $0.32 per diluted share, compared to $58.3 million, or $1.62 per diluted share, in the third quarter of 2024 [4] - The company anticipates additional charges in the fourth quarter related to severance and outplacement services, estimated between $4 million to $5 million [5] - Planned store closures are expected to impact stores contributing approximately $110 million in annual net sales [6] Strategic Adjustments - Carter's is adjusting its sourcing strategy, with countries like Vietnam, Cambodia, Bangladesh, and India expected to account for 75% of product sourcing spend in fiscal 2025, while China's share will drop to less than 3% [6]