Carter’s (NYSE:CRI) Releases Quarterly Earnings Results, Beats Expectations By $0.20 EPS

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

CRI stock traded down $8.55 during mid-day trading on Friday, reaching $33.52. The company’s stock had a trading volume of 4,818,083 shares, compared to its average volume of 1,327,584. The company has a current ratio of 2.26, a quick ratio of 0.95 and a debt-to-equity ratio of 0.58. The company’s 50 day moving average is $36.39 and its two-hundred day moving average is $32.21. Carter’s has a fifty-two week low of $23.38 and a fifty-two week high of $44.44. The stock has a market cap of $1.22 billion, a PE ratio of 13.57 and a beta of 1.06.

Key Headlines Impacting Carter’s

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

• Positive Sentiment: Q4 results beat estimates — stronger sales and an EPS beat, evidence of demand rebound and execution. Carter’s, Inc. Reports Fourth Quarter and Fiscal Year 2025 Results
• Positive Sentiment: Quarterly metrics: revenue and EPS topped estimates and sales grew ~7.6–7.7% year-over-year, supporting topline momentum. Carter’s (CRI) Q4 Earnings and Revenues Surpass Estimates
• Neutral Sentiment: Full press release, slide deck and conference call are available for details on segment trends and management commentary. Press Release / Slide Deck
• Neutral Sentiment: Earnings call transcript and coverage provide the exact cadence of management’s guidance and Q&A for deeper read-throughs. Carter’s (CRI) Q4 2025 Earnings Call Transcript
• Negative Sentiment: Company cut Q1 FY26 EPS guidance to $0.02–$0.08 vs. street $0.36, the primary catalyst for the share decline as investors reprice near-term profitability.
• Negative Sentiment: Analysts and media flagged a weak profit outlook despite the beat, noting the guide drove outsized share weakness. Carter’s slides after weak profit outlook
• Negative Sentiment: Coverage highlights margin pressure and tariff/headwind risks plus concerns about cash generation — factors that explain why FY26 EPS guidance was tempered. Carter’s (CRI) Shares Plunge on Margin Pressure, Tariff Headwinds, and Weakening Cash Generation
• Negative Sentiment: Analysis points to gross-margin challenges and constrained pricing power, which could keep near-term margins under pressure. Carter’s Gross Margins Show Challenges With Pricing Power
• Negative Sentiment: Post-earnings coverage summarizes the beat but underscores the soft guide as the reason shares fell sharply. Carter’s Q4 Earnings Beat Estimates, Shares Fall on Soft EPS View

Analysts Set New Price Targets

A number of research analysts have recently issued reports on the stock. The Goldman Sachs Group lifted their price objective on shares of Carter’s from $26.00 to $29.00 and gave the stock a “sell” rating in a research report on Tuesday, January 13th. Wall Street Zen upgraded Carter’s from a “sell” rating to a “hold” rating in a research note on Sunday, January 11th. UBS Group upped their target price on Carter’s from $33.00 to $40.00 and gave the company a “neutral” rating in a research report on Thursday, February 19th. Zacks Research raised Carter’s from a “hold” rating to a “strong-buy” rating in a report on Monday, January 19th. Finally, Citigroup upgraded Carter’s from a “neutral” rating to a “buy” rating and boosted their price target for the stock from $34.00 to $50.00 in a research note on Wednesday, January 21st. One investment analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, two have assigned a Hold rating and three have given a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of “Hold” and an average price target of $34.00.

Institutional Trading of Carter’s

Hedge funds and other institutional investors have recently modified their holdings of the stock. AQR Capital Management LLC boosted its stake in shares of Carter’s by 113.7% in the second quarter. AQR Capital Management LLC now owns 2,564,457 shares of the textile maker’s stock valued at $77,267,000 after purchasing an additional 1,364,698 shares during the period. Rubric Capital Management LP acquired a new stake in Carter’s in the fourth quarter valued at approximately $14,918,000. Quantinno Capital Management LP lifted its stake in Carter’s by 1,679.7% in the second quarter. Quantinno Capital Management LP now owns 370,791 shares of the textile maker’s stock worth $11,172,000 after acquiring an additional 349,957 shares during the last quarter. Millennium Management LLC grew its holdings in Carter’s by 104.3% during the 3rd quarter. Millennium Management LLC now owns 661,920 shares of the textile maker’s stock worth $18,679,000 after acquiring an additional 337,880 shares in the last quarter. Finally, Ameriprise Financial Inc. grew its holdings in Carter’s by 278.9% during the 3rd quarter. Ameriprise Financial Inc. now owns 421,738 shares of the textile maker’s stock worth $11,901,000 after acquiring an additional 310,421 shares in the last quarter.

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.