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

Carter’s (NYSE:CRI) released its quarterly earnings data on Friday. The textile maker reported $0.26 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.06 by $0.20, FiscalAI reports. The business 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 firm’s quarterly revenue was up 5.2% compared to the same quarter last year. During the same period in the prior 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 Performance

NYSE CRI opened at $38.65 on Friday. The company has a market cap of $1.42 billion, a P/E ratio of 7.24 and a beta of 0.86. The company has a fifty day simple moving average of $39.85 and a 200 day simple moving average of $37.62. 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 has a 12-month low of $23.38 and a 12-month high of $44.44.

Carter’s Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Friday, June 5th. Stockholders of record on Tuesday, May 26th were given a dividend of $0.25 per share. This represents a $1.00 dividend on an annualized basis and a dividend yield of 2.6%. The ex-dividend date of this dividend was Tuesday, May 26th. Carter’s’s dividend payout ratio is presently 40.32%.

Carter’s News Roundup

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

Institutional Trading of Carter’s

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Invesco Ltd. grew its holdings in Carter’s by 23.0% during the fourth quarter. Invesco Ltd. now owns 268,789 shares of the textile maker’s stock worth $8,717,000 after buying an additional 50,243 shares in the last quarter. Corient Private Wealth LLC grew its position in Carter’s by 579.1% in the 4th quarter. Corient Private Wealth LLC now owns 78,913 shares of the textile maker’s stock worth $2,559,000 after purchasing an additional 67,292 shares in the last quarter. Mercer Global Advisors Inc. ADV lifted its position in shares of Carter’s by 2.1% during the 4th quarter. Mercer Global Advisors Inc. ADV now owns 30,279 shares of the textile maker’s stock worth $982,000 after buying an additional 629 shares in the last quarter. XTX Topco Ltd bought a new position in shares of Carter’s in the fourth quarter valued at approximately $331,000. Finally, VARCOV Co. bought a new stake in Carter’s during the fourth quarter worth $274,000.

Analyst Upgrades and Downgrades

CRI has been the subject of several research reports. Weiss Ratings downgraded Carter’s from a “hold (c-)” rating to a “sell (d+)” rating in a research report on Monday, May 4th. Citigroup reiterated a “buy” rating on shares of Carter’s in a report on Tuesday, July 21st. Wells Fargo & Company raised Carter’s from an “underweight” rating to an “equal weight” rating and lifted their target price for the stock from $30.00 to $42.00 in a report on Wednesday, June 17th. Monness Crespi & Hardt upped their target price on Carter’s from $45.00 to $50.00 and gave the company a “buy” rating in a report on Thursday, May 7th. Finally, Zacks Research lowered shares of Carter’s from a “strong-buy” rating to a “hold” rating in a research note on Monday, May 25th. Four analysts have rated the stock with a Buy rating, three have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, the stock currently has a consensus rating of “Hold” and a consensus 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.