Carter’s (NYSE:CRI) Issues Earnings Results

Carter’s (NYSE:CRI) posted its quarterly earnings data on Friday. The textile maker reported $1.90 earnings per share for the quarter, topping the consensus estimate of $1.70 by $0.20, FiscalAI reports. Carter’s had a return on equity of 16.71% and a net margin of 3.15%.The firm had revenue of $925.45 million for the quarter, compared to analysts’ expectations of $912.36 million. During the same quarter last year, the business earned $2.39 EPS. The company’s quarterly revenue was up 7.7% compared to the same quarter last year. Carter’s updated its Q1 2026 guidance to 0.020-0.080 EPS.

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

• Carter’s reported a return to growth in 2025 with Q4 net sales up 8% (3% on a 13‑week basis), the third consecutive quarter of retail comp growth, higher AURs, D2C strength, and new customer gains among Gen Z and millennial families.
• Tariffs remain a material headwind — roughly $60M gross hit in 2025 and management expects the gross impact to rise to just over $200M in 2026 (about a $150M incremental increase), with first‑half pressure and guidance that excludes any potential recent tariff relief.
• 2026 guidance assumes net sales growth of low‑ to mid‑single digits and adjusted operating income growth in the same range, but EPS is expected to decline low‑double‑digits to mid‑teens versus 2025 due to higher interest (~$0.30 impact) and a higher tax rate (~22%), with results back‑end weighted and a weak first half.
• Management is pushing productivity initiatives and demand creation — roughly $40M of SG&A productivity (including ~$35M from workforce actions), about 60 store closures planned in 2026 (≈150 through 2028), and reinvestment in product make, marketing and technology to drive sustainable margin improvement.
• Balance sheet liquidity is strong with over $1B available (≈$500M cash) and a debt refinancing (new $575M 5‑year notes and $750M ABL), though inventories are elevated (≈$50M) due to higher tariffs even as seasonal mix and excess levels improved.

Carter’s Price Performance

Shares of CRI traded down $8.55 during trading hours on Friday, reaching $33.52. The stock had a trading volume of 4,817,550 shares, compared to its average volume of 1,327,514. Carter’s has a 12 month low of $23.38 and a 12 month high of $44.44. The stock has a market capitalization of $1.22 billion, a PE ratio of 13.57 and a beta of 1.06. The company has a debt-to-equity ratio of 0.58, a quick ratio of 0.95 and a current ratio of 2.26. The company’s 50-day moving average is $36.39 and its two-hundred day moving average is $32.21.

More Carter’s News

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

• Positive Sentiment: Q4 beat on top and bottom lines — Carter’s posted $1.90 EPS vs. $1.70 expected and revenue of $925.45M (up ~7.6% year-over-year), showing sales momentum across segments. This is the primary fundamental upside in the print. Carter’s (CRI) Q4 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Management cites improving traffic, new customer acquisition and sequential momentum in product demand in the press release and slide deck — evidence company-level initiatives are working even as margins are challenged. Business Wire: Carter’s Reports Fourth Quarter and Fiscal Year 2025 Results
• Neutral Sentiment: Industry context: analysts note Carter’s sits within apparel players leaning into premiumization and digital, a tailwind for growth but one that also brings higher costs and promotional risk — relevant but mixed for near-term earnings. 5 Shoes & Retail Apparel Stocks Capitalizing on Premiumization Trends
• Negative Sentiment: Soft forward guidance drove the sell-off — management lowered Q1 and FY26 EPS expectations (despite guiding to higher sales), signaling margin compression and lower profitability ahead; that outlook is the principal reason the stock is down. Carter’s Q4 Earnings Beat Estimates, Shares Fall on Soft EPS View
• Negative Sentiment: Margin pressure, tariff headwinds and weakening cash generation are being called out by commentators as structural near-term risks; these items amplify fears that higher sales won’t translate into proportional EPS growth. Carter’s (CRI) Shares Plunge on Margin Pressure, Tariff Headwinds, and Weakening Cash Generation
• Negative Sentiment: Gross-margin and pricing-power concerns highlighted by analysts could force more promotional activity or higher costs, pressuring near-term margins and investor expectations. Carter’s Gross Margins Show Challenges With Pricing Power

Institutional Investors Weigh In On Carter’s

Hedge funds have recently added to or reduced their stakes in the business. Royal Bank of Canada increased its position in Carter’s by 50.2% in the 1st quarter. Royal Bank of Canada now owns 40,649 shares of the textile maker’s stock valued at $1,663,000 after acquiring an additional 13,594 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in shares of Carter’s by 5.4% in the first 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 purchasing an additional 6,195 shares during the last quarter. Russell Investments Group Ltd. increased its holdings 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 purchasing an additional 734 shares during the period. Hsbc Holdings PLC raised its position in Carter’s by 71.5% during the 2nd quarter. Hsbc Holdings PLC now owns 9,390 shares of the textile maker’s stock worth $282,000 after purchasing an additional 3,915 shares during the last quarter. Finally, Invesco Ltd. raised its position in Carter’s by 30.4% during the 2nd 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 during the last quarter.

Analyst Ratings Changes

A number of research firms recently commented on CRI. Citigroup raised shares of Carter’s from a “neutral” rating to a “buy” rating and raised their price target for the stock from $34.00 to $50.00 in a research report on Wednesday, January 21st. Zacks Research raised shares of Carter’s from a “hold” rating to a “strong-buy” rating in a report on Monday, January 19th. UBS Group lifted their price target on shares of Carter’s from $33.00 to $40.00 and gave the company a “neutral” rating in a research report on Thursday, February 19th. Weiss Ratings raised Carter’s from a “sell (d+)” rating to a “hold (c-)” rating in a research report on Thursday, February 19th. Finally, The Goldman Sachs Group lifted their price objective on Carter’s from $26.00 to $29.00 and gave the company a “sell” rating in a report on Tuesday, January 13th. One investment analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating, two have issued a Hold rating and three have given a Sell rating to the stock. According to MarketBeat.com, the stock has a consensus rating of “Hold” and a consensus target price of $34.00.

About Carter’s

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.