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Carter's
(NYSE:CRI)
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Rating:58Neutral
Price Target:
$39.00
▲(0.65% Upside)
Action:Reiterated
Date:07/31/26
The score is held back mainly by weakened profitability despite stable revenue, with only partial offset from improved leverage and a recent cash-flow rebound. Technicals are mixed (short-term below key moving averages but supported longer-term), while valuation and dividend are moderately supportive. The latest earnings call added a modest positive tilt via tightened guidance and improving adjusted EBITDA, though GAAP losses and leverage remain important risks.
Positive Factors
Brand leadership & diversified channels
Carter’s iconic Carter’s and OshKosh brands plus a mix of company stores, eCommerce and wholesale create durable revenue diversification. Brand recognition and multi-channel distribution support steady demand, resilience to single-channel shocks and long-term pricing/placement leverage.
Negative Factors
Profitability compression
A multi-year decline in operating and net margins indicates structural pressure from higher operating costs or heavier discounting. Sustained margin compression erodes earnings quality, free cash generation and the firm's ability to fund growth or returns without structural cost or pricing fixes.
Read all positive and negative factors
Positive Factors
Negative Factors
Brand leadership & diversified channels
Carter’s iconic Carter’s and OshKosh brands plus a mix of company stores, eCommerce and wholesale create durable revenue diversification. Brand recognition and multi-channel distribution support steady demand, resilience to single-channel shocks and long-term pricing/placement leverage.
Read all positive factors
Carter's Key Performance Indicators (KPIs)
Any
Net Sales By Segment
Shows revenue performance across various segments, indicating which product lines or services are most successful and where there might be potential for growth or need for strategic adjustments.
Shows revenue performance across various segments, indicating which product lines or services are most successful and where there might be potential for growth or need for strategic adjustments.
Data provided by:
The Fly
The FlyCarter's (CRI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.42B
Dividend Yield2.59%
Average Volume (3M)1.15M
Price to Earnings (P/E)7.1
Beta (1Y)0.80
Revenue Growth5.17%
EPS Growth41.92%
CountryUS
Employees15,400
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)2.54
Shares Outstanding36,850,117
10 Day Avg. Volume869,350
30 Day Avg. Volume1,146,100
Financial Highlights & Ratios
PEG Ratio-0.26
Price to Book (P/B)1.27
Price to Sales (P/S)0.41
P/FCF Ratio17.15
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$44.00Price Target Upside13.55% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)3.26
Revenue Forecast (FY)$3.02B
Carter's Business Overview & Revenue Model
Company Description
Carter's, Inc., together with its subsidiaries, designs, sources, and markets branded childrenswear in the United States and internationally. It operates through three segments: U.S. Retail, U.S. Wholesale, and International. The company’s product...
How the Company Makes Money
Carter’s makes money primarily by selling children’s apparel and accessories through two main channels: (1) retail and (2) wholesale. In its retail channel, Carter’s generates revenue from direct-to-consumer sales through company-operated Carter’s...
Carter's Earnings Call Summary
Earnings Call Date:Jul 31, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 23, 2026
Earnings Call Sentiment Positive
Overall the call was constructive: the company reported strong top-line growth (23% YoY), materially improved adjusted EBITDA (+48% YoY) and margin expansion, substantial progress on platform adoption (AsureCentral majority migration) and AI/automation (Luna adoption), and provided tightened/upgraded guidance for 2026. Headline positives outweigh the negatives, though there are near-term headwinds and execution items to monitor—namely ongoing GAAP losses, cash/debt levels, expected reduction in non-recurring revenue versus prior-year comparables, a near-term revenue impact from Lathem's HaaS transition, and that some AI-driven cost benefits and salesforce productivity gains remain early in their ramp. On balance, momentum and profitability trajectory dominate the narrative.Positive Updates
Strong Revenue Growth
Total revenue of $37.1M in Q2 2026, up 23% year-over-year from $30.1M (Q2 2025).
Negative Updates
Ongoing GAAP Net Loss and Leverage
GAAP net loss remained at $4.4M in Q2 2026 (improved but still negative). Cash of $19.7M vs. total debt of $68.9M as of June 30, 2026 indicates leverage and modest liquidity cushion.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth
Total revenue of $37.1M in Q2 2026, up 23% year-over-year from $30.1M (Q2 2025).
Read all positive updates
Company Guidance
Management tightened 2026 guidance to full‑year revenue of $159–$163 million with adjusted EBITDA margins of 24%–25%, and Q3 revenue of $38–$40 million with adjusted EBITDA of $8–$10 million; they expect positive levered free cash flow in the mid‑to‑high‑teens after roughly $15 million of capitalized software and ~$6 million of cash interest. Key operating metrics: Q2 revenue was $37.1 million (+23% YoY) with recurring revenue $34.0 million (91% of total, +19% YoY), Q2 adjusted EBITDA $7.7 million (21% margin, +48% YoY), cash $19.7 million and total debt $68.9 million at June 30, and an ~ $80 million contracted backlog with ~41% expected to convert in the next 12 months. Management said Q2 organic growth was 5% (down from 7% in Q1) but expects double‑digit organic/recurring growth in H2 2026, no further growth‑rate cuts this year, a ~$600k revenue headwind in H1 2027 from Lathem’s HaaS transition, a 150 sales‑rep headcount goal by year‑end, and a medium‑term target of $180–$200 million in revenue with ≥30% adjusted EBITDA margins.Carter's Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
58
Neutral
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.95B | 2.90B | 2.84B | 2.95B | 3.21B | 3.49B |
| Gross Profit | 1.32B | 1.31B | 1.37B | 1.40B | 1.47B | 1.66B |
| EBITDA | 206.18M | 203.32M | 343.49M | 400.35M | 424.79M | 592.69M |
| Net Income | 90.59M | 91.80M | 185.51M | 232.50M | 250.04M | 339.75M |
Balance Sheet | ||||||
| Total Assets | 2.48B | 2.57B | 2.43B | 2.38B | 2.44B | 3.19B |
| Cash, Cash Equivalents and Short-Term Investments | 473.44M | 487.07M | 412.93M | 351.21M | 211.75M | 984.29M |
| Total Debt | 1.20B | 1.21B | 1.13B | 1.08B | 1.18B | 1.57B |
| Total Liabilities | 1.56B | 1.64B | 1.58B | 1.53B | 1.64B | 2.24B |
| Stockholders Equity | 928.46M | 925.05M | 854.56M | 845.25M | 796.41M | 950.19M |
Cash Flow | ||||||
| Free Cash Flow | 127.08M | 68.63M | 242.62M | 469.27M | 48.00M | 230.82M |
| Operating Cash Flow | 177.40M | 122.33M | 298.79M | 529.13M | 88.36M | 268.26M |
| Investing Cash Flow | -50.32M | -53.70M | -56.16M | -59.86M | -40.36M | -32.44M |
| Financing Cash Flow | 23.40M | 2.04M | -174.82M | -332.64M | -819.27M | -352.71M |
Carter's Technical Analysis
Neutral
38.75
Price Trends
39.66
Negative
37.55
Positive
35.60
Positive
Market Momentum
-0.50
Positive
48.20
Neutral
31.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRI, the sentiment is Neutral. The current price of 38.75 is above the 20-day moving average (MA) of 38.64, below the 50-day MA of 39.66, and above the 200-day MA of 35.60, indicating a neutral trend. The MACD of -0.50 indicates Positive momentum. The RSI at 48.20 is Neutral, neither overbought nor oversold. The STOCH value of 31.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CRI.
Carter's Risk Analysis
Carter's disclosed 42 risk factors in its most recent earnings report. Carter's reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Carter's Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $536.37M | -27.94 | -9.35% | ― | 4.66% | 68.21% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $424.51M | 19.91 | 3.68% | ― | 4.60% | ― | |
58 Neutral | $1.42B | 7.14 | 20.84% | 2.58% | 5.17% | 41.92% | |
41 Neutral | $54.26M | -0.50 | 245.71% | ― | -13.13% | -54.20% |
* Consumer Cyclical Sector Average
CRI
Carter's
38.57
14.41
59.65%
GCO
Genesco
38.22
13.70
55.87%
PLCE
Children's Place
2.44
-2.12
-46.49%
SFIX
Stitch Fix
4.02
-0.65
-13.92%
Carter's Corporate Events
DividendsShareholder Meetings
Carter’s Declares Quarterly Dividend, Affirming Capital Return Strategy
Positive
May 14, 2026
At its May 13, 2026 annual meeting, Carter’s shareholders elected eight directors to one-year terms and gave advisory approval to 2025 executive compensation, signaling continued support for current leadership and pay practices. Investors al...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Carter’s Names Sharon Price John as New CEO
Positive
May 1, 2026
On May 1, 2026, Carter’s announced that Sharon Price John, a veteran children’s consumer and retail executive, will become Chief Executive Officer and President and join the board effective June 15, 2026, following her 13-year tenure l...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.