Carter's (CRI) AI Stock Analysis

• Market Cap: $1.40B
• Dividend Yield: 4.89%
• Average Volume (3M): 994.23K
• Price to Earnings (P/E): 14.9
• Beta (1Y): 0.78
• 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: 1,077,903
• 30 Day Avg. Volume: 994,232
• 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: 1.70
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 1.79
• Enterprise Value/Ebitda: 11.91
• 1Y Price Target: $34.67
• Price Target Upside: -9.85% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $40.00 ▲(4.00% Upside)

Carter's overall stock score reflects a company facing significant operational challenges, particularly in revenue and profitability declines. While the valuation is attractive and recent corporate events provide some positive outlook, the financial performance and earnings call highlight ongoing risks. Investors should weigh these factors carefully, considering the company's strategic initiatives to improve future performance.

Positive Factors

Strong brand portfolio and multichannel reach

Long-established brands and a diversified go-to-market model (owned stores, e-commerce, wholesale) provide durable customer recognition, repeat purchases, and channel flexibility. This breadth helps absorb regional and channel-specific demand shifts and supports long-term revenue resilience.

Improved liquidity via new asset-based revolver

A large five-year ABL materially strengthens near- and medium-term liquidity and working capital access, lowering refinancing risk. Enhanced borrowing capacity supports inventory management, restructuring execution, and funding of productivity initiatives over the next several years.

Identified structural cost savings and productivity plan

Concrete cost-reduction targets and headcount cuts are structural levers to restore margins. Realizing $45M in savings improves operating leverage and funds reinvestment in product and demand creation, supporting sustainable margin recovery if execution remains on track.

Negative Factors

Sharp revenue contraction

A large, sustained decline in revenue compresses scale benefits and pressures fixed-cost absorption. Persistent top-line weakness hinders margin recovery, reduces cash generation, and raises reliance on structural fixes and capital markets to finance operations until sales stabilize.

Tariff-driven gross margin pressure

Elevated product costs from tariffs represent a lasting headwind to gross margins unless offset by sustained price increases or sourcing shifts. Passing costs risks volume loss; failure to fully offset tariffs would structurally compress profitability over multiple quarters.

Weakening cash generation

Deteriorating cash conversion reduces the firm's ability to self-fund inventory, capex, and debt service. Weak operating cash increases dependence on external financing and constrains strategic flexibility, making sustained recovery and reinvestment more challenging.

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 signs of pressure, with declining revenue and profitability margins. While the balance sheet reflects improved leverage, cash flow challenges could impact future operations. The company needs to focus on reversing revenue declines and enhancing cash flow generation to strengthen its financial position.

Income Statement

Carter's income statement shows a mixed performance. The gross profit margin is relatively stable, but there is a noticeable decline in net profit margin over the TTM period. Revenue growth has been negative, indicating a contraction in sales. EBIT and EBITDA margins have also decreased, reflecting challenges in maintaining operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio, which has improved over the TTM period, suggesting better financial leverage management. Return on equity has decreased, indicating reduced profitability for shareholders. The equity ratio remains stable, showing a balanced asset structure.

Cash Flow

Cash flow analysis indicates a significant decline in free cash flow growth, raising concerns about liquidity. The operating cash flow to net income ratio has decreased, suggesting less cash generation from operations relative to net income. However, the free cash flow to net income ratio remains healthy, indicating efficient cash conversion.

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: Positive
• Last Price: 38.46
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 38.46 is above the 20-day moving average (MA) of 35.80, above the 50-day MA of 33.56, and above the 200-day MA of 31.00, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 64.46 is Neutral, neither overbought nor oversold. The STOCH value of 71.77 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
VSCO	72 Outperform	$4.89B	29.86	31.50%	―	2.97%	9.85%
CRI	68 Neutral	$1.40B	14.93	10.27%	4.89%	-0.34%	-61.00%
GCO	63 Neutral	$308.56M	-155.21	-0.13%	―	2.76%	96.01%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SFIX	54 Neutral	$633.42M	-21.38	-14.67%	―	-0.08%	73.05%
PLCE	38 Underperform	$90.22M	-1.55	―	―	-10.09%	81.44%

Carter's Corporate Events

Carter’s CTO Raghu Sagi Announces Resignation

On November 21, 2025, Raghu Sagi, the Chief Information & Technology Officer of Carter’s, Inc., announced his resignation, which will take effect on January 20, 2026. The company expressed its well wishes for Mr. Sagi’s future endeavors, indicating a significant change in its leadership structure.

The most recent analyst rating on (CRI) stock is a Hold with a $33.00 price target. To see the full list of analyst forecasts on Carter’s stock, see the CRI Stock Forecast page.

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.