Carter’s provides estimates on potential impact of tariffs

The company continues to closely monitor the Administration’s proposed plans to implement significant new tariffs on products imported into the United States from a wide range of countries. If implemented, these additional tariffs would add substantially to the approximately $110M in duties on imported product paid by the company in fiscal 2024. The company has estimated that the gross pre-tax earnings impact of additional import duties under an additional baseline tariff of 30% for China, 20% for Vietnam, 19% for Indonesia, and 10% for all other countries is expected to be approximately $125M-$150M on an annualized basis. Over time, the company intends to offset these additional costs through a combination of changes to its product assortments, cost sharing with its vendor partners, changes to the mix of its production by country, and raising prices to end consumers and its wholesale customers. In the second half of fiscal year 2025, the company anticipates a net additional baseline tariff impact to pre-tax earnings of approximately $35M. The gross amount of additional costs from incremental tariffs and the company’s actions to offset them will depend heavily on the final tariff schemes established by the U.S. government, if any. As announced previously, given the Company’s leadership transition in April 2025 and the ongoing and significant uncertainty surrounding proposed new tariffs and potential related impact on its business, the Company has suspended its fiscal 2025 guidance.