Carter’s (NYSE:CRI) Releases Quarterly Earnings Results

Carter’s (NYSE:CRI) released its quarterly earnings results on Friday. The textile maker reported $0.26 EPS for the quarter, beating the consensus estimate of $0.06 by $0.20, FiscalAI reports. Carter’s had a net margin of 3.07% and a return on equity of 13.06%. The business had revenue of $615.49 million for the quarter, compared to analyst estimates of $605.68 million. During the same period in the prior year, the business earned $0.17 earnings per share. The company’s quarterly revenue was up 5.2% on a year-over-year basis.

Here are the key takeaways from Carter’s’ conference call:

• Second-quarter results exceeded outlook: Net sales rose 5% to $615 million, adjusted operating income increased 54%, and adjusted EPS grew 53% to $0.26. U.S. retail comparable sales increased 5%, extending the company’s streak to five consecutive quarters of growth.
• Digital and customer acquisition trends were strong. E-commerce comparable sales grew double digits for the fourth consecutive quarter, while Gen Z customers increased at a mid-teens rate; management also cited higher engagement and profitability from website, app, marketing, and AI investments.
• Wholesale demand is expected to soften in the second half because some fall sales were pulled forward into the second quarter and customers are taking more cautious inventory positions. Carter’s reduced full-year sales growth guidance to 2%–3% from its prior low- to mid-single-digit outlook.
• Gross margin declined 180 basis points to 46.3% in Q2, pressured by tariffs, product investments, and additional clearance activity. Management expects roughly 200 basis points of gross-margin expansion in Q3 as higher tariffs anniversary, but expects less expansion in Q4 due partly to a greater wholesale mix.
• The company received $132 million in tariff refunds and ended the quarter with more than $650 million of cash, lifting projected full-year operating cash flow to $230 million–$240 million. Management improved its adjusted EPS outlook to a high-single-digit to low-double-digit decline, while retaining cash because tariff policy and consumer demand remain uncertain.

Carter’s Stock Up 2.3%

Shares of CRI opened at $38.65 on Friday. Carter’s has a fifty-two week low of $23.38 and a fifty-two week high of $44.44. The company’s fifty day moving average is $39.85 and its two-hundred day moving average is $37.62. The firm has a market cap of $1.42 billion, a PE ratio of 15.59 and a beta of 0.86. The company has a quick ratio of 1.72, a current ratio of 2.80 and a debt-to-equity ratio of 0.61.

Carter’s Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Friday, June 5th. Shareholders of record on Tuesday, May 26th were issued a $0.25 dividend. This represents a $1.00 dividend on an annualized basis and a dividend yield of 2.6%. The ex-dividend date was Tuesday, May 26th. Carter’s’s dividend payout ratio (DPR) is 40.32%.

Analyst Upgrades and Downgrades

Several brokerages have recently issued reports on CRI. UBS Group restated a “buy” rating on shares of Carter’s in a research report on Wednesday, July 8th. Wells Fargo & Company raised shares of Carter’s from an “underweight” rating to an “equal weight” rating and raised their price target for the stock from $30.00 to $42.00 in a research note on Wednesday, June 17th. The Goldman Sachs Group raised shares of Carter’s from a “neutral” rating to a “buy” rating and set a $38.00 price objective for the company in a research report on Thursday, April 9th. Weiss Ratings lowered shares of Carter’s from a “hold (c-)” rating to a “sell (d+)” rating in a research report on Monday, May 4th. Finally, Monness Crespi & Hardt boosted their price target on Carter’s from $45.00 to $50.00 and gave the company a “buy” rating in a report on Thursday, May 7th. Four analysts have rated the stock with a Buy rating, three have given a Hold rating and two have given a Sell rating to the stock. According to MarketBeat, the stock currently has an average rating of “Hold” and an average target price of $41.17.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in the company. Royal Bank of Canada grew its stake in shares of Carter’s by 50.2% in the first quarter. Royal Bank of Canada now owns 40,649 shares of the textile maker’s stock valued at $1,663,000 after buying an additional 13,594 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its holdings in Carter’s by 5.4% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 120,964 shares of the textile maker’s stock worth $4,947,000 after acquiring an additional 6,195 shares during the period. Russell Investments Group Ltd. grew its position in Carter’s by 4.7% in the second quarter. Russell Investments Group Ltd. now owns 16,482 shares of the textile maker’s stock valued at $497,000 after acquiring an additional 734 shares in the last quarter. Hsbc Holdings PLC raised its stake in shares of Carter’s by 71.5% during the second quarter. Hsbc Holdings PLC now owns 9,390 shares of the textile maker’s stock valued at $282,000 after purchasing an additional 3,915 shares during the period. Finally, Invesco Ltd. lifted its position in shares of Carter’s by 30.4% during the second quarter. Invesco Ltd. now owns 223,731 shares of the textile maker’s stock worth $6,741,000 after purchasing an additional 52,103 shares in the last quarter.

Key Carter’s News

Here are the key news stories impacting Carter’s this week:

• Positive Sentiment: Carter’s reported second-quarter adjusted earnings of $0.26 per share, substantially above analyst estimates of approximately $0.02–$0.06 and up from $0.17 a year earlier. Carter’s Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Revenue increased 5.2% year over year to $615.5 million, exceeding the roughly $605.7 million consensus estimate. Management also said adjusted operating profit rose 54% and that results exceeded its prior outlook. Carter’s Reports Second Quarter Fiscal 2026 Results
• Neutral Sentiment: Full-year 2026 revenue guidance was maintained or updated at approximately $3.0 billion, broadly in line with consensus. The available guidance report did not provide a comparable full-year EPS figure. Carter’s Q2 2026 Earnings Call Transcript
• Negative Sentiment: Third-quarter revenue guidance of approximately $750 million fell well below the analyst consensus of $797 million. The shortfall creates concern about near-term sales momentum despite the strong second-quarter performance. Carter’s Q2 Sales and Guidance

Carter’s Company Profile

Carter’s, Inc (NYSE: CRI) is a leading designer and marketer of infant and young children’s apparel in North America. Headquartered in Atlanta, Georgia, the company’s core business focuses on creating clothing and accessories for babies and children, including bodysuits, sleepwear, layette, outerwear and accessories that blend comfort, safety and style. Carter’s flagship brand is complemented by its OshKosh B’gosh line, which offers heritage-inspired designs and durable fabrics for toddlers and young kids.

The company distributes its products through a diversified platform that includes wholesale partnerships with major department stores and mass merchandisers, direct‐to‐consumer e-commerce sites, and an extensive network of company-operated retail stores.