Carter's (CRI) AI Stock Analysis

• Market Cap: $957.80M
• Dividend Yield: 10.08%
• Average Volume (3M): 1.62M
• Price to Earnings (P/E): 7.0
• Beta (1Y): 0.71
• Revenue Growth: -1.46%
• EPS Growth: -41.93%
• Country: US
• Employees: 15,350
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Apparel - Retail
• EPS (TTM): 0.17
• Shares Outstanding: 36,432,175
• 10 Day Avg. Volume: 1,316,884
• 30 Day Avg. Volume: 1,620,552
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.93
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 1.38
• Enterprise Value/Ebitda: 7.22
• 1Y Price Target: $26.17
• Price Target Upside: 0.38% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6

• Rating: 64 Neutral
• Price Target: $28.00 ▲(7.40% Upside)

Carter's overall stock score is driven by its attractive valuation and strategic plans to address profitability challenges. However, financial performance and technical analysis indicate potential risks, with high leverage and bearish technical indicators.

Positive Factors

New Strategy

CEO Doug Palladini gave an early glimpse at his new strategy, which includes focusing on higher quality 'best' product which has been trending and driving AUR growth.

Retail Performance

Retail comps improved, partly aided by Easter timing.

Wholesale Business

Wholesale business continues its track record of beating expectations.

Negative Factors

Declining Sales

The US Retail business has been the largest issue at Carters, with sales in the Retail segment declining 25% and EBIT margins declining by 1,000bp.

Dividend Reduction

Carter's cuts quarterly dividend to $0.25/share, indicating a realignment to the company's current level of profitability ahead of further investments and tariffs.

Tariff Challenges

CRI faces a challenging macro environment with the possibility of much higher costs due to tariffs, along with declining margins and concerning birthrate trends.

Carter's Business Overview & Revenue Model

Company Description

Carter's, Inc. (CRI) is a leading American retailer of children's apparel and accessories, primarily targeting infants and toddlers. The company operates through its well-known brands, including Carter's and OshKosh B'gosh, offering a wide range of products such as clothing, sleepwear, and accessories. With a diverse presence in the retail sector, Carter's serves customers through various channels, including its extensive network of retail stores, e-commerce platforms, and partnerships with other retailers.

How the Company Makes Money

Carter's generates revenue primarily through the sale of its children's clothing and accessories across multiple channels. The company's key revenue streams include direct sales from its branded retail stores and online platforms, which have increasingly contributed to its income as e-commerce continues to grow. Additionally, Carter's benefits from wholesale partnerships by selling its products to other retailers, expanding its reach to a larger customer base. Seasonal collections and promotional campaigns also play a significant role in driving sales. The company's strong brand recognition and customer loyalty, coupled with strategic marketing efforts, further enhance its earnings potential.

Carter's Financial Statement Overview

Summary

Carter's financial performance shows robust profitability margins and cash flow generation, but faces challenges with declining revenue and equity pressure. Strategic initiatives are needed to bolster growth amidst industry challenges.

Income Statement

Carter's shows a declining revenue trend over recent periods with a noticeable drop from annual to TTM data. The Gross Profit Margin and Net Profit Margin are healthy but have decreased compared to prior periods, indicating pressure on profitability. EBIT and EBITDA margins are also solid but declining, reflecting challenges in maintaining operational efficiency.

Balance Sheet

The company's Debt-to-Equity Ratio is moderate, indicating a balanced approach to leveraging. However, the declining trend in Stockholders' Equity and relatively stable debt levels suggest potential risks if profitability doesn't rebound. The Equity Ratio remains stable, reflecting an adequate proportion of equity financing.

Cash Flow

Carter's has a strong Operating Cash Flow to Net Income Ratio, showcasing efficient cash conversion. The Free Cash Flow has seen fluctuations but remains positive, indicating operational resilience. There is a notable decrease in Free Cash Flow compared to net income, suggesting potential constraints in cash flexibility.

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	1.34B	1.37B	1.40B	1.47B	1.66B	1.31B
EBITDA	256.28M	320.07M	400.35M	455.01M	592.69M	328.90M
Net Income	135.59M	185.51M	232.50M	250.04M	339.75M	109.72M
Balance Sheet
Total Assets	2.46B	2.43B	2.38B	2.44B	3.20B	3.39B
Cash, Cash Equivalents and Short-Term Investments	338.18M	412.93M	351.21M	211.75M	984.29M	1.10B
Total Debt	1.12B	1.13B	1.08B	1.18B	1.57B	1.73B
Total Liabilities	1.60B	1.58B	1.53B	1.64B	2.25B	2.45B
Stockholders Equity	853.90M	854.56M	845.25M	796.41M	950.19M	938.03M
Cash Flow
Free Cash Flow	140.36M	242.62M	469.27M	48.00M	230.82M	557.02M
Operating Cash Flow	198.76M	298.79M	529.13M	88.36M	268.26M	589.89M
Investing Cash Flow	-58.40M	-56.16M	-59.86M	-40.36M	-32.44M	-32.87M
Financing Cash Flow	-118.28M	-174.82M	-332.64M	-819.27M	-352.71M	324.84M

Carter's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 26.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 26.07 is below the 20-day moving average (MA) of 26.82, below the 50-day MA of 29.52, and below the 200-day MA of 41.11, indicating a bearish trend. The MACD of -1.33 indicates Negative momentum. The RSI at 43.76 is Neutral, neither overbought nor oversold. The STOCH value of 91.37 is Negative, 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
BKE	79 Outperform	$2.87B	14.44	44.55%	7.02%	-1.08%	-8.20%
AEO	72 Outperform	$2.19B	12.93	12.19%	3.85%	-0.95%	-10.51%
VSCO	69 Neutral	$1.79B	11.22	31.35%	―	1.45%	59.09%
CRI	64 Neutral	$957.80M	6.98	15.95%	10.08%	-1.46%	-41.93%
Sector *	63 Neutral	AU$3.11B	28.69	25.32%	4.52%	2.39%	-30.11%
FL	50 Neutral	$2.45B	194.63	-12.85%	―	-2.62%	0.93%
PLCE	44 Neutral	$105.74M	―	-521.67%	―	-12.15%	75.86%

Carter's Corporate Events

Carter’s Announces Quarterly Dividend of $0.25 Per Share

On August 14, 2025, Carter’s, Inc. announced a quarterly dividend of $0.25 per share, payable on September 12, 2025, to shareholders of record as of August 26, 2025. This decision reflects the company’s commitment to returning value to its shareholders and is subject to future business conditions and financial performance, as determined by the Board of Directors.

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.

Carter’s Board Member Hali Borenstein to Step Down

On July 8, 2025, Hali Borenstein, a member of Carter’s, Inc. Board of Directors, announced she will not seek re-election at the 2026 annual shareholders’ meeting. Her decision is not due to any disagreements with the company but to focus on her role as CEO of Reformation LLC and her family. Ms. Borenstein will continue her duties on the Board until the meeting in 2026, and the company expressed gratitude for her service.

The most recent analyst rating on (CRI) stock is a Sell with a $41.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

Carter’s Announces Strategic Plan and Dividend Update

On May 14, 2025, Carter’s held its Annual Meeting of Stockholders, where all eleven director nominees were elected for a one-year term. Additionally, the stockholders approved the 2024 executive compensation and ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for fiscal 2025. On May 20, 2025, Carter’s announced updates to its strategic plan and declared a $0.25 quarterly dividend, reflecting a realignment of its capital allocation strategy amid challenging market conditions and potential cost increases due to proposed tariffs. The company aims to return to consistent, profitable growth and will present its strategic plan in the upcoming earnings call.

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.