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CRICarters Inc

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Company Info

CEO

Michael D. Casey

Location

Georgia, USA

Exchange

NYSE

Website

https://carters.com

Summary

Carter's, OshKosh, Skip Hop, Child of Mine, Just One You, Simple Joys, SimpleJoys, Carter's My First Love, little planet, and other brands.

Company Info

CEO

Michael D. Casey

Location

Georgia, USA

Exchange

NYSE

Website

https://carters.com

Summary

Carter's, OshKosh, Skip Hop, Child of Mine, Just One You, Simple Joys, SimpleJoys, Carter's My First Love, little planet, and other brands.

AI Insights for CRI
2 min read

Quick Summary

Carter’s, Inc. is a leading American apparel manufacturer specializing in clothing and products for babies and young children. The company owns and operates several well-known brands such as Carter’s, OshKosh B’gosh, Skip Hop, and others, selling products both through its own retail footprint and via wholesale channels. Its primary customer base consists of new and expecting parents, families with infants, toddlers, and young children, as well as gift-givers. Carter’s operates over 900 retail stores across North America and sells through mass-market retailers and ecommerce platforms. It is widely regarded for its brand reputation, focus on quality, and broad product distribution, making it a go-to destination for children’s apparel and essentials.

The Bull Case

  • Carter’s possesses significant brand recognition and customer loyalty within the U.S.
  • children’s apparel market, especially among parents and gift-givers.
  • Its broad portfolio of trusted brands provides diversification and market coverage, allowing it to capture different price points and demographics.
  • The company benefits from its large retail and wholesale distribution network, giving it multiple points of presence both in physical stores and online.
  • Carter’s has historically maintained a strong balance sheet and solid operating cash flows, supporting dividends and shareholder returns.

The Bear Case

  • Major weaknesses for Carter’s include vulnerability to shifts in birth rates, which directly impact demand for its core products.
  • The company faces ongoing margin pressure from tariffs, rising supply chain costs, and the need for frequent discounting in a crowded retail sector.
  • Carter’s is exposed to disruptions from its large retail footprint, which is costly to maintain amid the shift to ecommerce and changing consumer behaviors.
  • Leadership uncertainty, as the company seeks a new CEO, and a heavy dependence on key suppliers and overseas manufacturing, particularly in China, are additional concerns.
  • Recent underperformance versus prior years and declining guidance highlight ongoing execution and strategy challenges.

Key Risks

  • Carter’s faces several significant risks, including ongoing exposure to U.S.
  • tariffs on goods manufactured abroad, which could add $200–$250 million to annual costs.
  • Declining birth rates and increased industry competition from mass retailers and online entrants put downward pressure on organic sales growth.
  • Persistent margin compression from inflation, promotional pricing, and operational expenses is a concern, as is leadership risk due to executive transitions.

What to Watch

UpcomingIn the most recent quarter, Carter’s saw a modest increase in Q2 sales, with a 3.7% rise to $585.3 million that beat forecasts.
UpcomingHowever, its adjusted EPS sharply missed estimates, dropping to $0.17 due to margin pressure from higher costs, tariffs, and changes in pricing strategies.
UpcomingThe company announced plans to close 150 stores in North America by 2028 and reduce its office workforce by 15% in a bid to manage expenses and improve profitability.
ExpectedFor the upcoming quarter, Carter’s management expects continued pressure on profitability, with margins likely to remain under strain from tariffs, compensation costs, and broader input price increases.

Price Drivers

  • The stock price of Carter’s is driven primarily by its quarterly earnings reports, which reflect revenue trends, profit margins, and earnings per share.
  • Other key drivers include macroeconomic conditions affecting consumer spending, such as inflation, tariff impacts on imported goods, and declining birth rates.
  • Margin pressure from rising costs, tariffs, and promotional pricing can also move the stock significantly, as can management guidance and strategic actions like store closures or new product launches.
  • Investor sentiment is occasionally swayed by trends in broader apparel retail, leadership changes, and external events like changes in U.S.–China trade policy.

Recent News

  • Recent news about Carter’s has highlighted weaker-than-expected earnings, ongoing profit and margin pressure, and plans for significant store closures and staff reductions due to high tariffs and rising operational costs.
  • The board has commenced a CEO search as part of its leadership transition.
  • The company’s performance has lagged, with share prices falling sharply year-to-date and trading well below 52-week highs, driven by missed revenue expectations and profitability challenges.
  • Management is responding with supply chain shifts, targeted pricing adjustments, and a greater focus on exclusive and international brand strategies.

Market Trends

  • The children's apparel industry is confronting headwinds from declining U.S.
  • birth rates, increased competition from both traditional retailers and ecommerce-focused brands, and persistent challenges from global tariffs.
  • Broader market trends include consumers moving toward value and convenience, fueling growth for retailers with robust ecommerce and omnichannel offerings.
  • There is also heightened demand for sustainable and premium children’s products, providing growth opportunities for innovative brands.

AI-generated summary. Not investment advice. DYOR.

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Topics: Company overview • Products • Competitors • Strengths & Risks

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