Carter's (CRI) AI Stock Analysis

• Market Cap: $1.04B
• Dividend Yield: 6.47%
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 11.6
• Beta (1Y): 0.75
• Revenue Growth: -0.34%
• EPS Growth: -61.00%
• Country: US
• Employees: 15,350
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 0.74
• Shares Outstanding: 36,447,870
• 10 Day Avg. Volume: 934,260
• 30 Day Avg. Volume: 1,191,797
• PEG Ratio: -0.58
• Price to Book (P/B): 2.26
• Price to Sales (P/S): 0.68
• P/FCF Ratio: 7.97
• Enterprise Value/Market Cap: 1.95
• Enterprise Value/Revenue: 0.72
• Enterprise Value/Gross Profit: 1.53
• Enterprise Value/Ebitda: 10.17
• 1Y Price Target: $28.80
• Price Target Upside: 0.66% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 5
• EPS Forecast (FY): 2.96
• Revenue Forecast (FY): $2.85B

• Rating: 66 Neutral
• Price Target: $33.00 ▲(15.34% Upside)

Carter's overall stock score reflects financial pressures with declining revenue and profitability, despite some positive valuation metrics. The earnings call provided a balanced view, with strategic initiatives aimed at addressing current challenges. Technical analysis indicates mixed momentum, and the high dividend yield offers some investor appeal.

Positive Factors

Diversified Sales Channels

Carter's diversified sales channels, including retail stores, e-commerce, and third-party retailers, enhance distribution and visibility, supporting stable revenue generation.

Cost Savings and Efficiency Measures

The company's focus on cost savings and efficiency measures, including workforce reduction and operational efficiencies, is expected to improve profitability and financial health.

Positive Growth in U.S. Retail and International Segments

Growth in U.S. Retail and International segments indicates strong market demand and effective strategies, contributing to long-term revenue stability.

Negative Factors

Declining Revenue and Profitability

The decline in revenue and profitability margins suggests challenges in maintaining growth and operational efficiency, potentially impacting long-term financial performance.

Impact of Tariffs on Gross Margin

Tariffs have significantly impacted gross margins, increasing costs and reducing profitability, which could persist if trade policies remain unchanged.

Significant Decline in Operating Income

The sharp decline in operating income indicates reduced operational efficiency and profitability, posing a risk to sustainable financial performance.

Carter's Business Overview & Revenue Model

Company Description

Carter's, Inc., together with its subsidiaries, designs, sources, and markets branded childrenswear under the Carter's, OshKosh, Skip Hop, Child of Mine, Just One You, Simple Joys, Carter's My First Love, little planet, and other brands in the United States and internationally. The company operates through three segments: U.S. Retail, U.S. Wholesale, and International. Its Carter's products include babies and young children products, such as bodysuits, pants, dresses, knit sets, blankets, layette essentials, bibs, booties, sleep and play products, rompers, and jumpers; and OshKosh brand products comprise playclothes, such as denim apparel products with multiple wash treatments and coordinating garments, overalls, woven bottoms, knit tops, and bodysuits. The company also provides products for playtime, travel, mealtime, bathtime, and homegear, as well as kid's bags and diaper bags under the Skip Hop brand. In addition, it offers bedding, cribs, diaper bags, footwear, gift sets, hair accessories, jewelry, outerwear, paper goods, socks, shoes, swimwear, and toys. The company operates 18,800 wholesale locations, including department stores, national chain stores, and specialty stores. As of December 31, 2021, it operated 980 retail stores. The company also sells its products through its eCommerce websites, such as carters.com, oshkoshbgosh.com, oshkosh.com, and skiphop.com, as well as other international wholesale accounts and licensees. Carter's, Inc. was founded in 1865 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

Carter's generates revenue through multiple streams, primarily from the sale of its branded apparel and accessories. The bulk of its sales comes from direct-to-consumer channels, including its brick-and-mortar stores and online platforms, which allow the company to reach a broad customer base. Additionally, Carter's benefits from partnerships with major retail chains and department stores that carry its products, enhancing distribution and visibility. The company also engages in seasonal promotions and marketing campaigns to drive sales, and its focus on product quality and brand loyalty contributes to repeat purchases, further solidifying its revenue. Overall, Carter's diversified sales channels and strong brand recognition play a significant role in its financial success.

Carter's Financial Statement Overview

Summary

Carter's financial performance shows challenges in revenue growth and profitability, with high leverage posing potential risks. Operational efficiency is evident, but the decline in cash flow growth and high debt levels are concerning.

Income Statement

Carter's shows a mixed performance in its income statement. The TTM data indicates a slight decline in revenue and profit margins compared to previous years. The gross profit margin remains stable, but the net profit margin has decreased, reflecting challenges in maintaining profitability. Revenue growth has been negative, indicating potential market challenges or competitive pressures. However, the company maintains a reasonable EBIT and EBITDA margin, suggesting operational efficiency.

Balance Sheet

The balance sheet reveals a moderate financial position with a high debt-to-equity ratio, indicating significant leverage. However, the return on equity remains healthy, suggesting effective use of equity to generate profits. The equity ratio is stable, reflecting a balanced asset structure. The company should focus on managing its debt levels to reduce financial risk.

Cash Flow

Carter's cash flow statement shows a decline in free cash flow growth, which is a concern for future liquidity. The operating cash flow to net income ratio is below 1, indicating potential challenges in converting income into cash. However, the free cash flow to net income ratio remains strong, suggesting that the company is still generating sufficient cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.83B	2.84B	2.95B	3.21B	3.49B	3.02B
Gross Profit	1.33B	1.37B	1.40B	1.47B	1.66B	1.31B
EBITDA	199.55M	343.49M	400.35M	424.79M	592.69M	328.90M
Net Income	89.09M	185.51M	232.50M	250.04M	339.75M	109.72M
Balance Sheet
Total Assets	2.47B	2.43B	2.38B	2.44B	3.19B	3.39B
Cash, Cash Equivalents and Short-Term Investments	184.19M	412.93M	351.21M	211.75M	984.29M	1.10B
Total Debt	1.18B	1.13B	1.08B	1.18B	1.57B	1.73B
Total Liabilities	1.60B	1.58B	1.53B	1.64B	2.24B	2.45B
Stockholders Equity	864.64M	854.56M	845.25M	796.41M	950.19M	938.03M
Cash Flow
Free Cash Flow	91.97M	242.62M	469.27M	48.00M	230.82M	555.62M
Operating Cash Flow	151.16M	298.79M	529.13M	88.36M	268.26M	588.49M
Investing Cash Flow	-59.19M	-56.16M	-59.86M	-40.36M	-32.44M	-31.47M
Financing Cash Flow	-81.85M	-174.82M	-332.64M	-819.27M	-352.71M	324.84M

Carter's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.61
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRI, the sentiment is Negative. The current price of 28.61 is below the 20-day moving average (MA) of 31.54, below the 50-day MA of 30.57, and below the 200-day MA of 33.31, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 39.30 is Neutral, neither overbought nor oversold. The STOCH value of 9.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRI.

Carter's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VSCO	69 Neutral	$2.79B	19.47	26.29%	―	2.30%	8.85%
CRI	66 Neutral	$1.04B	11.58	10.27%	6.47%	-0.34%	-61.00%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
GES	59 Neutral	$881.98M	168.20	6.23%	6.65%	7.84%	-81.20%
GCO	56 Neutral	$327.96M	―	-4.81%	―	2.66%	-4772.54%
SFIX	55 Neutral	$537.11M	―	-14.79%	―	-5.26%	79.25%
PLCE	46 Neutral	$155.62M	―	―	―	-12.08%	93.16%

Carter's Corporate Events

Carter’s Secures New $750 Million Credit Facility

On November 17, 2025, The William Carter Company, a subsidiary of Carter’s, Inc., entered into a new five-year senior secured asset-based revolving credit facility of up to $750 million, replacing its existing facility. This new ABL Facility, which includes a $100 million sub-limit for letters of credit and a $50 million swing line sub-limit, is expected to enhance the company’s financial flexibility and support its operational needs, with a borrowing base estimated at approximately $799 million and availability of $743 million.

The most recent analyst rating on (CRI) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

Carter’s Completes $575 Million Senior Notes Sale

On November 13, 2025, The William Carter Company, a subsidiary of Carter’s, Inc., completed the sale of $575 million in senior notes due 2031, receiving approximately $567 million after fees. The proceeds will be used to redeem existing 5.625% senior notes due 2027, cover related expenses, and for general corporate purposes. This financial maneuver is part of Carter’s strategy to manage its debt and improve its financial standing, potentially impacting its market position and stakeholder interests.

The most recent analyst rating on (CRI) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

Carter’s Updates By-Laws to Streamline Governance

On November 13, 2025, Carter’s, Inc. announced amendments to its By-Laws, effective immediately, which include changes to the procedures for special meetings, proxy requirements, and director nominations. These changes aim to streamline governance and align with Delaware’s General Corporation Law. Additionally, the company declared a quarterly cash dividend of $0.25 per share, payable on December 5, 2025, reflecting its ongoing commitment to shareholder returns.

The most recent analyst rating on (CRI) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

Carter’s Increases Senior Notes Offering to $575M

On October 29, 2025, Carter’s, Inc. announced the pricing of a $575 million senior notes offering by its subsidiary, The William Carter Company, marking a $75 million increase from the initial proposal. The proceeds from this offering will be used to redeem existing notes due in 2027, cover related fees, and for general corporate purposes, potentially impacting the company’s financial strategy and market positioning.

The most recent analyst rating on (CRI) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

Carter’s Announces $500M Senior Notes Offering

On October 28, 2025, Carter’s, Inc. announced the commencement of a senior notes offering by its subsidiary, The William Carter Company, aiming to raise $500 million to redeem its 5.625% Senior Notes due 2027. This financial maneuver is part of a broader strategy to restructure its debt, which includes entering a new $750 million asset-based revolving credit facility, replacing the existing one. These moves are expected to impact the company’s financial flexibility and market positioning, although they are subject to market conditions and other factors.

The most recent analyst rating on (CRI) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

Carter’s Inc. Faces Risks and Challenges in Restructuring Efforts: Potential Impacts on Profitability

Carter’s Inc. faces significant risks associated with its recently announced restructuring plans and operational changes, which aim to align financial resources with business priorities and improve profitability. However, the company may not achieve the desired operational efficiencies, potentially leading to adverse effects on its financial condition and results of operations. Challenges such as unexpected implementation costs, management distraction, and workforce attrition could further complicate the execution of these initiatives. Consequently, failure to realize the expected benefits could negatively impact Carter’s Inc.’s profitability and earnings in the short term.

Carter’s Inc. Reports Q3 2025 Earnings and Strategic Actions

Carter’s, Inc. is North America’s largest apparel company specializing in clothing for babies and young children, known for its iconic brands such as Carter’s and OshKosh B’gosh. The company operates over 1,000 stores across the U.S., Canada, and Mexico, and sells its products online and through major retailers.

Carter’s Inc. Earnings Call: Growth Amid Challenges

Carter’s Inc. Earnings Call: A Mixed Bag of Growth and Challenges

Carter’s Announces Organizational Restructuring Plan

On September 16, 2025, Carter’s, Inc. announced an organizational restructuring plan to optimize its cost structure and enhance future profitability, with expected charges of $10.1 million to $11.1 million, primarily related to severance and termination benefits. The plan includes closing low-margin retail stores and refining product choices, aiming to generate significant savings and improve the company’s financial performance, despite challenges such as elevated product costs and higher tariffs impacting profitability.

The most recent analyst rating on (CRI) stock is a Sell with a $25.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

Carter’s Adopts Stockholder Rights Agreement Amid Acquisition

On September 22, 2025, Carter’s, Inc. announced the adoption of a stockholder rights agreement to prevent any entity from gaining control of the company through open market accumulation without paying a control premium. This decision was made following the rapid acquisition of 16.86% of the company’s common stock by RWWM, Inc., which was disclosed on September 4, 2025. The agreement, effective from October 3, 2025, aims to protect the interests of all stockholders and ensure the board can make informed decisions. The rights agreement will expire on September 21, 2026, unless terminated earlier under specific conditions.

The most recent analyst rating on (CRI) stock is a Hold with a $32.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

Carter’s Announces Departure of Chief Product Officer

Carter’s, Inc. announced the departure of Chief Product Officer Kendra D. Krugman as part of an organizational restructuring to enhance decision-making and competitiveness, effective October 21, 2025. Additionally, the company decided to terminate its Deferred Compensation Plan due to low participation and administrative complexity, transitioning to a Safe Harbor 401(k) Plan, with the plan termination effective September 30, 2025.

The most recent analyst rating on (CRI) stock is a Hold with a $49.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.