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

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 business had revenue of $925.45 million during the quarter, compared to analysts’ expectations of $912.36 million. During the same quarter in the previous year, the firm earned $2.39 EPS. The firm’s 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 Trading Down 20.3%

CRI stock opened at $33.52 on Friday. 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 2.26, a quick ratio of 0.95 and a debt-to-equity ratio of 0.58. The business’s 50 day moving average is $36.42 and its 200-day moving average is $32.33. The firm has a market cap of $1.22 billion, a P/E ratio of 13.30 and a beta of 1.06.

Carter’s Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, March 27th. Shareholders of record on Friday, March 13th will be issued a dividend of $0.25 per share. This represents a $1.00 dividend on an annualized basis and a yield of 3.0%. The ex-dividend date of this dividend is Friday, March 13th. Carter’s’s payout ratio is presently 40.49%.

Carter’s News Summary

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

Institutional Trading of Carter’s

Several institutional investors have recently bought and sold shares of the stock. AQR Capital Management LLC raised its stake in Carter’s by 113.7% during the second quarter. AQR Capital Management LLC now owns 2,564,457 shares of the textile maker’s stock worth $77,267,000 after acquiring an additional 1,364,698 shares in the last quarter. Morgan Stanley grew its holdings in shares of 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 purchasing an additional 239,469 shares during the last quarter. Charles Schwab Investment Management Inc. grew its holdings in shares of 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 purchasing an additional 82,498 shares during the last quarter. Geode Capital Management LLC increased its position in shares of Carter’s by 7.7% during the 4th quarter. Geode Capital Management LLC now owns 856,803 shares of the textile maker’s stock worth $27,791,000 after purchasing an additional 61,348 shares in the last quarter. Finally, Goldman Sachs Group Inc. lifted its holdings in Carter’s by 69.5% during the 4th quarter. Goldman Sachs Group Inc. now owns 738,067 shares of the textile maker’s stock valued at $23,936,000 after purchasing an additional 302,751 shares during the last quarter.

Analyst Ratings Changes

A number of brokerages have recently commented on CRI. The Goldman Sachs Group upped their price target on Carter’s from $26.00 to $29.00 and gave the stock a “sell” rating in a report on Tuesday, January 13th. Zacks Research raised shares of Carter’s from a “hold” rating to a “strong-buy” rating in a research report on Monday, January 19th. Weiss Ratings raised shares of Carter’s from a “sell (d+)” rating to a “hold (c-)” rating in a report on Thursday, February 19th. UBS Group raised their price target on shares of Carter’s from $33.00 to $40.00 and gave the stock a “neutral” rating in a research report on Thursday, February 19th. Finally, Wall Street Zen upgraded shares of Carter’s from a “sell” rating to a “hold” rating in a report on Sunday, January 11th. One investment analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, two have given a Hold rating and three have assigned a Sell rating to the company. According to MarketBeat.com, the stock has an average rating of “Hold” and an average target price of $34.00.

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.