Carter’s (NYSE:CRI) Posts Earnings Results

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

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%

NYSE:CRI traded up $0.86 during mid-day trading on Friday, hitting $38.65. The company had a trading volume of 2,427,314 shares, compared to its average volume of 1,138,816. The business has a fifty day simple moving average of $39.82 and a 200-day simple moving average of $37.61. The firm has a market capitalization of $1.42 billion, a price-to-earnings ratio of 15.59 and a beta of 0.86. Carter’s has a 1 year low of $23.38 and a 1 year high of $44.44. The company has a current ratio of 2.80, a quick ratio of 1.72 and a debt-to-equity ratio of 0.61.

Carter’s Announces Dividend

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

Key Stories Impacting Carter’s

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

Wall Street Analyst Weigh In

A number of research analysts recently weighed in on the company. Wall Street Zen cut Carter’s from a “buy” rating to a “hold” rating in a report on Saturday, July 25th. Wells Fargo & Company upgraded Carter’s from an “underweight” rating to an “equal weight” rating and raised their price objective for the stock from $30.00 to $42.00 in a report on Wednesday, June 17th. UBS Group reaffirmed a “buy” rating on shares of Carter’s in a research note on Wednesday, July 8th. Weiss Ratings cut Carter’s from a “hold (c-)” rating to a “sell (d+)” rating in a report on Monday, May 4th. Finally, Zacks Research downgraded shares of Carter’s from a “strong-buy” rating to a “hold” rating in a research report on Monday, May 25th. Four research analysts have rated the stock with a Buy rating, three have given a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat.com, the company currently has a consensus rating of “Hold” and an average price target of $41.17.

Institutional Investors Weigh In On Carter’s

A number of large investors have recently modified their holdings of CRI. AQR Capital Management LLC raised its holdings in shares of Carter’s by 113.7% during the 2nd quarter. AQR Capital Management LLC now owns 2,564,457 shares of the textile maker’s stock valued at $77,267,000 after buying an additional 1,364,698 shares during the period. Morgan Stanley boosted its holdings in Carter’s by 15.7% in the 4th quarter. Morgan Stanley now owns 1,762,036 shares of the textile maker’s stock worth $57,143,000 after acquiring an additional 239,469 shares during the period. Charles Schwab Investment Management Inc. boosted its holdings in Carter’s by 5.4% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 1,597,901 shares of the textile maker’s stock worth $51,820,000 after acquiring an additional 82,498 shares during the period. Geode Capital Management LLC grew its position in Carter’s by 7.7% in the fourth quarter. Geode Capital Management LLC now owns 856,803 shares of the textile maker’s stock valued at $27,791,000 after acquiring an additional 61,348 shares in the last quarter. Finally, Goldman Sachs Group Inc. grew its position in Carter’s by 69.5% in the fourth quarter. Goldman Sachs Group Inc. now owns 738,067 shares of the textile maker’s stock valued at $23,936,000 after acquiring an additional 302,751 shares in the last quarter.

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.