Carter's Q3 profit tops estimates on higher pricing
Overview
U.S. children's apparel retailer's Q3 sales fell 0.7% yr/yr
Adjusted EPS for Q3 rose 39% and beat analyst expectations
Profitability improved on higher pricing and productivity initiatives, offsetting cost inflation
Outlook
Carter's sees FY 2026 net sales between $2.91 bln and $2.93 bln
Company expects FY 2026 adjusted operating income of $178 mln to $187 mln
Carter's forecasts FY 2026 adjusted diluted EPS of $3.05 to $3.23
Result Drivers
HIGHER PRICING & PRODUCTIVITY - Co said improved profitability was driven by higher realized pricing and productivity initiatives, offsetting increased marketing investments and cost inflation
SEGMENT PERFORMANCE - Co reported growth in International segment and slight increase in U.S. Retail comparable sales, while U.S. Wholesale sales declined
MARKETING ADJUSTMENTS - Co said U.S. Retail team adjusted marketing and promotional efforts to respond to macroeconomic challenges
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Sales | $752 mln | ||
Q3 Adjusted EPS | Beat | $1.03 | $0.85 (7 Analysts) |
Q3 EPS | $1 | ||
Q3 Adjusted Operating Margin | 7.60% |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the apparel & accessories retailers peer group is "buy."
Wall Street's median 12-month price target for Carter's, Inc. is $39.00, about 16.8% above its October 29 closing price of $33.38
The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 12 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)