Carter's (CRI) AI Stock Analysis

• Market Cap: $1.15B
• Dividend Yield: 3.11%
• Average Volume (3M): 1.63M
• Price to Earnings (P/E): 7.0
• Beta (1Y): 0.68
• Revenue Growth: -3.39%
• EPS Growth: -28.96%
• Country: US
• Employees: 15,350
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Apparel - Retail
• EPS (TTM): 0.66
• Shares Outstanding: 36,441,223
• 10 Day Avg. Volume: 1,896,376
• 30 Day Avg. Volume: 1,634,120
• PEG Ratio: -0.61
• Price to Book (P/B): 3.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 60.35
• Enterprise Value/Market Cap: 3.37
• Enterprise Value/Revenue: 0.34
• Enterprise Value/Gross Profit: 2.88
• Enterprise Value/Ebitda: 2.84
• 1Y Price Target: $28.75
• Price Target Upside: -8.70% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 4

• Rating: 67 Neutral
• Price Target: $35.00 ▲(11.15%Upside)

Carter's stock score is influenced primarily by its mixed financial performance and undervaluation, providing potential for income-focused investors. However, bearish technical indicators and uncertainties from the earnings call and industry challenges pose risks. The recent CEO appointment is a positive strategic move, offering hope for operational improvements.

Positive Factors

Exclusive Brand Performance

Carter’s exclusive brand business with Walmart, Target, and Amazon continues to perform well.

Leadership and Growth Strategy

New CEO Palladini has identified several opportunities to help return CRI to growth, which are expected to be outlined in the company's upcoming earnings call.

Wholesale Business Performance

Wholesale business continues its track record of beating expectations.

Negative Factors

Dividend and Profitability

The company's dividend was misaligned with their current level of profitability, highlighting ongoing financial challenges.

Tariff and Cost 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.

US Retail Segment Performance

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.

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 channels, primarily driven by the sale of its children's apparel products. The key revenue streams include sales from company-operated retail stores, e-commerce sales through its branded websites, and wholesale distribution to national and international retailers. The company also benefits from strategic partnerships with major retail chains such as Target and Walmart, which further extend its market reach. Additionally, Carter's taps into licensing agreements for certain product categories, enhancing its brand presence and contributing to its financial performance.

Carter's Financial Statement Overview

Summary

Carter's financial performance indicates mixed results. While profitability margins and cash flow generation remain robust, the declining revenue trend and slight pressure on equity suggest the need for strategic initiatives to bolster growth. Maintaining financial stability amidst industry challenges will be crucial for future success.

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	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.81B	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	287.02M	320.07M	400.35M	455.01M	592.69M	328.90M
Net Income	163.01M	185.51M	232.50M	250.04M	339.75M	109.72M
Balance Sheet
Total Assets	2.33B	2.43B	2.38B	2.44B	3.20B	3.39B
Cash, Cash Equivalents and Short-Term Investments	320.79M	412.93M	351.21M	211.75M	984.29M	1.10B
Total Debt	1.12B	1.13B	1.08B	1.18B	1.58B	1.73B
Total Liabilities	1.48B	1.58B	1.53B	1.64B	2.25B	2.45B
Stockholders Equity	847.25M	854.56M	845.25M	796.41M	950.19M	938.03M
Cash Flow
Free Cash Flow	221.20M	242.62M	469.27M	48.00M	230.82M	557.02M
Operating Cash Flow	275.69M	298.79M	529.13M	88.36M	268.26M	589.89M
Investing Cash Flow	-54.49M	-56.16M	-59.86M	-40.36M	-32.44M	-32.87M
Financing Cash Flow	-163.06M	-174.82M	-332.64M	-819.27M	-352.71M	324.84M

Carter's Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 31.49
• 50DMA: Negative
• 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 Neutral. The current price of 31.49 is above the 20-day moving average (MA) of 31.19, below the 50-day MA of 32.79, and below the 200-day MA of 46.44, indicating a neutral trend. The MACD of -0.54 indicates Negative momentum. The RSI at 52.73 is Neutral, neither overbought nor oversold. The STOCH value of 58.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CRI.

Carter's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BKE	78 Outperform	$2.44B	12.27	44.55%	2.94%	-1.08%	-8.20%
AEO	69 Neutral	$1.79B	10.55	12.19%	4.85%	-0.95%	-10.51%
CRI	67 Neutral	$1.15B	6.97	18.91%	3.11%	-3.39%	-28.96%
VSCO	64 Neutral	$1.64B	10.33	31.35%	―	1.45%	59.09%
Sector *	62 Neutral	$16.85B	11.50	-7.38%	2.96%	1.59%	-23.36%
FL	55 Neutral	$2.36B	194.63	-12.85%	―	-2.62%	0.93%
PLCE	40 Underperform	$107.07M	―	-521.67%	―	-12.15%	75.86%

Carter's Corporate Events

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.