Core Insights - Carter's, Inc. (CRI) reported mixed third-quarter 2025 results, with net sales exceeding estimates but earnings per share (EPS) falling short and declining significantly year-over-year [1][2][3] Financial Performance - Consolidated net sales reached $757.8 million, surpassing the Zacks Consensus Estimate of $751 million, remaining stable year-over-year despite lower U.S. Wholesale sales [3] - Adjusted EPS was 74 cents, missing the Zacks Consensus Estimate of 78 cents, and down 54.9% from $1.64 in the prior-year quarter [2][9] - U.S. Retail segment sales increased by 2.6% year-over-year to $299.6 million, while U.S. Wholesale sales decreased by 5.1% to $192.9 million [4][9] - International segment sales grew by 4.9% year-over-year to $92.8 million [5] Margins and Costs - Gross profit fell by 4% year-over-year to $341.6 million, with gross margin contracting by 180 basis points to 45.1% [6] - Adjusted operating income decreased by 48.9% to $39.4 million, with adjusted operating margin down 500 basis points to 5.2% due to increased costs [6] - Adjusted SG&A expenses rose by 8.1% year-over-year to $307.7 million, accounting for 40.6% of net sales, an increase of 310 basis points [7] Strategic Initiatives - The company plans to cut approximately 300 roles and close 150 stores, targeting $35 million in annual savings starting in 2026 [9][11][12] - Carter's aims for over $10 million in annual spending reductions across various categories, with savings beginning in 2026 [12] - The closures are expected to be accretive to profitability due to sales transfer to nearby stores and online channels [13] Financial Position - As of the end of Q3 2025, Carter's had cash and cash equivalents of $184.2 million, net long-term debt of $498.7 million, and shareholders' equity of $864.6 million [8] - The company paid a cash dividend of 25 cents per share in Q3, totaling $9.1 million, with total cash dividends for the first nine months amounting to $47.2 million [8] Outlook and Challenges - The company faces challenges from new tariffs, with an estimated $110 million in duties paid in 2024 and projected annualized impacts of $200-$250 million from additional import duties [14][15] - Carter's has suspended its 2025 guidance due to uncertainties surrounding tariffs and their potential impact on business [16]

Group 1 - Ralph Lauren Corporation (RL) is leveraging its unique brand portfolio and product innovations to execute its Next Great Chapter plan, focusing on digital transformation through personalization and data-driven insights [1][2] - The Next Great Chapter initiative emphasizes brand elevation, consumer centricity, and operational agility, aiming to expand into high-growth markets like Asia while strengthening its core regions [2][4] - In Q1 fiscal 2026, global direct-to-consumer comparable store sales increased by 13%, supported by positive retail performance across all regions and channels [2][8] Group 2 - Ralph Lauren is optimizing its distribution and enhancing its retail network, which has led to significant growth in digital channels, with digital sales up 19% in North America, 11% in Europe, and 35% in Asia during the reported quarter [3][4] - Continuous investments in personalization, mobile capabilities, and loyalty integration have strengthened digital sales and engagement with younger, more diverse consumer segments [3][4] - The company's retail and wholesale operations are core to its premium lifestyle business, contributing to a balanced revenue mix and reinforcing its leadership in the luxury lifestyle space [4][8]