Carter's (CRI) AI Stock Analysis

• Market Cap: $1.05B
• Dividend Yield: 7.26%
• Average Volume (3M): 1.47M
• Price to Earnings (P/E): 7.7
• Beta (1Y): 0.69
• Revenue Growth: -1.46%
• EPS Growth: -41.93%
• Country: US
• Employees: 15,350
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Apparel - Retail
• EPS (TTM): 0.17
• Shares Outstanding: 36,432,175
• 10 Day Avg. Volume: 1,396,197
• 30 Day Avg. Volume: 1,473,049
• 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: 1.76
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 1.38
• Enterprise Value/Ebitda: 7.22
• 1Y Price Target: $25.25
• Price Target Upside: -12.75% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 4

• Rating: 68 Neutral
• Price Target: $31.00 ▲(7.12% Upside)

Carter's stock score reflects a mix of strengths and challenges. The low P/E ratio and high dividend yield suggest potential undervaluation, while technical indicators show short-term bullish momentum. However, financial performance concerns, particularly in cash flow and leverage, along with earnings call highlights of tariff impacts and profitability challenges, weigh on the overall score.

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 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 statements indicate 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. The company should focus on improving revenue growth and managing its debt to enhance financial stability.

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	1.34B	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: Positive
• Last Price: 28.94
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRI, the sentiment is Positive. The current price of 28.94 is above the 20-day moving average (MA) of 27.04, above the 50-day MA of 28.14, and below the 200-day MA of 38.85, indicating a neutral trend. The MACD of 0.49 indicates Negative momentum. The RSI at 61.28 is Neutral, neither overbought nor oversold. The STOCH value of 73.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CRI.

Carter's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BKE	81 Outperform	$3.04B	14.87	43.13%	6.61%	1.62%	-2.57%
AEO	75 Outperform	$3.17B	17.67	12.17%	2.78%	-2.73%	-16.71%
VSCO	72 Outperform	$2.06B	14.29	26.29%	―	2.30%	8.85%
CRI	68 Neutral	$1.05B	7.68	15.95%	7.26%	-1.46%	-41.93%
Sector *	61 Neutral	$18.02B	12.77	-0.74%	3.01%	1.30%	-13.03%
FL	49 Neutral	$2.29B	194.63	-13.84%	―	-3.58%	-4.20%
PLCE	47 Neutral	$139.66M	―	-521.67%	―	-12.08%	93.16%

Carter's Corporate Events

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.

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.

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.