Carter’s (NYSE:CRI – Get Free Report) issued 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. Carter’s had a return on equity of 13.06% and a net margin of 3.07%.The business had revenue of $615.49 million during the quarter, compared to analysts’ expectations of $605.68 million. During the same quarter in the previous year, the firm posted $0.17 EPS. The company’s revenue for the quarter 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 Price Performance
Carter’s stock traded up $0.86 during midday trading on Friday, reaching $38.65. The company had a trading volume of 2,447,139 shares, compared to its average volume of 1,138,953. The company has a debt-to-equity ratio of 0.61, a current ratio of 2.80 and a quick ratio of 1.72. Carter’s has a 12-month low of $23.38 and a 12-month high of $44.44. The company has a market capitalization of $1.42 billion, a P/E ratio of 15.59 and a beta of 0.86. The firm’s fifty day simple moving average is $39.82 and its 200-day simple moving average is $37.61.
Carter’s Announces Dividend
More 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
Hedge Funds Weigh In On Carter’s
Hedge funds and other institutional investors have recently made changes to their positions in the company. UMB Bank n.a. increased its position in shares of Carter’s by 445.8% during the fourth quarter. UMB Bank n.a. now owns 775 shares of the textile maker’s stock worth $25,000 after purchasing an additional 633 shares in the last quarter. Caitong International Asset Management Co. Ltd raised its stake in Carter’s by 555.9% in the 3rd quarter. Caitong International Asset Management Co. Ltd now owns 1,115 shares of the textile maker’s stock valued at $31,000 after purchasing an additional 945 shares during the last quarter. EverSource Wealth Advisors LLC lifted its holdings in Carter’s by 202.6% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 1,486 shares of the textile maker’s stock valued at $45,000 after purchasing an additional 995 shares in the last quarter. State of Wyoming lifted its holdings in Carter’s by 1,380.6% in the 4th quarter. State of Wyoming now owns 2,132 shares of the textile maker’s stock valued at $69,000 after purchasing an additional 1,988 shares in the last quarter. Finally, Aster Capital Management DIFC Ltd boosted its stake in Carter’s by 612.9% during the 4th quarter. Aster Capital Management DIFC Ltd now owns 2,659 shares of the textile maker’s stock worth $86,000 after purchasing an additional 2,286 shares during the last quarter.
Analyst Upgrades and Downgrades
Several research analysts recently weighed in on the company. Wells Fargo & Company upgraded Carter’s from an “underweight” rating to an “equal weight” rating and lifted their price target for the company from $30.00 to $42.00 in a research report on Wednesday, June 17th. Zacks Research cut shares of Carter’s from a “strong-buy” rating to a “hold” rating in a research note on Monday, May 25th. Wall Street Zen downgraded shares of Carter’s from a “buy” rating to a “hold” rating in a report on Saturday, July 25th. The Goldman Sachs Group upgraded shares of Carter’s from a “neutral” rating to a “buy” rating and set a $38.00 price target on the stock in a research report on Thursday, April 9th. Finally, UBS Group reaffirmed a “buy” rating on shares of Carter’s in a report on Wednesday, July 8th. Four equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat.com, Carter’s currently has an average rating of “Hold” and an average target price of $41.17.
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.
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