Core Insights - Carter's reported fourth-quarter net sales of $925 million, an 8% increase year over year, with a 3% increase on a comparable 13-week basis [2][5] - The company faced a gross margin decline of 460 basis points to 43.2%, primarily due to tariffs and higher product costs [2][5] - Adjusted EPS for the quarter was $1.90, down from $2.39 in the prior year [5][6] Financial Performance - The fourth-quarter results exceeded internal forecasts, marking the first year-over-year revenue increase since 2021 [2] - Adjusted SG&A expenses rose 5% to $315 million, influenced by costs associated with the 53rd week, demand-creation spending, and increased wage and rent expenses [6] - The company ended the fiscal year with over $1 billion in liquidity, including approximately $500 million in cash [3][14] Fiscal 2026 Outlook - For fiscal 2026, Carter's expects net sales and adjusted operating income to grow low- to mid-single digits, while adjusted EPS is projected to decline low double digits to mid-teens [4][17] - The company anticipates a gross tariff impact exceeding $200 million in 2026, with pricing expected to offset some of this impact [4][17] - First-quarter 2026 guidance includes mid-single-digit net sales growth and adjusted operating income of $12 million to $15 million [19] Retail and Consumer Trends - U.S. retail net sales increased 9% in the quarter, with comparable sales up 4.7%, marking the third consecutive quarter of positive retail comps [7] - The company is focusing on a growth strategy centered on "quality growth," reducing promotions, and enhancing brand storytelling [8] - Carter's active consumer count is growing, particularly among Gen Z and millennial families, with a higher mix of "better and best" products [10] Wholesale and International Performance - U.S. wholesale net sales increased 3%, but profitability was pressured by tariffs, with approximately $20 million of the quarter's tariff impact affecting this segment [11][12] - International net sales grew 10%, driven by strong performance in Canada and Mexico, with operating profit increasing slightly year over year [13] Inventory and Capital Allocation - Year-end inventory was $545 million, up 8% in dollars but down 4% in units, with tariffs increasing inventory value by $50 million [15] - The company refinanced its debt, issuing $575 million in new 5-year senior notes at a 7.375% coupon [14]

Dear founders:- Preserve runway & survive until you're inevitable- Cut personal burnrate, be a cockroach- Ship early and often and in public- Join @superteam, @colosseum, @alliance, etc. to accelerate time to market and growth- Find a cofounder for emotional balance- Don't launch your product, just keep improving- 100 users that love your product > 1000 that just like it- Build on Solana for the biggest possible community, network, and distribution- Never give up. DON'T DIE!It's shipping szn 🚢 ...