Carter's (CRI)
NYSE:CRI
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Carter's
(NYSE:CRI)
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Rating:52Neutral
Price Target:
$34.00
▼(-2.30% Downside)
Action:ReiteratedDate:02/28/26
The score is held back primarily by weakened profitability and sharply lower cash generation, reinforced by earnings-call guidance for margin pressure and an EPS decline driven largely by tariffs and higher interest. Offsetting factors include improved leverage, supportive valuation (moderate P/E and ~4.6% yield), and moderately positive momentum indicators alongside DTC and international operating momentum.
Positive Factors
Improved leverage
A materially lower debt-to-equity strengthens the capital structure and reduces refinancing and liquidity risk. This improvement gives management durable financial flexibility to fund capex, execute strategic initiatives, sustain the dividend, and absorb shocks over the next several quarters.
Negative Factors
Rising tariff headwind
A persistent, multi-hundred-million dollar tariff burden materially pressures gross margins and forces either higher pricing or margin compression. Given the scale and expected year-over-year increase, this is a structural profit headwind that will depress earnings power until tariffs or sourcing mix change.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved leverage
A materially lower debt-to-equity strengthens the capital structure and reduces refinancing and liquidity risk. This improvement gives management durable financial flexibility to fund capex, execute strategic initiatives, sustain the dividend, and absorb shocks over the next several quarters.
Read all positive factors
Carter's (CRI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.26B
Dividend Yield4.89%
Average Volume (3M)994.23K
Price to Earnings (P/E)12.8
Beta (1Y)0.71
Revenue Growth-0.34%
EPS Growth-61.00%
CountryUS
Employees15,350
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)1.90
Shares Outstanding36,386,140
10 Day Avg. Volume1,077,903
30 Day Avg. Volume994,232
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 Cap1.58
Enterprise Value/Revenue0.69
Enterprise Value/Gross Profit1.51
Enterprise Value/Ebitda9.79
Forecast
1Y Price Target
$43.25Price Target Upside24.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)3.06
Revenue Forecast (FY)$3.00B
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 Uni...
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 al...
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 Earnings Call Summary
Earnings Call Date:Feb 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: positive operational momentum (return to consolidated revenue growth, multi‑quarter comp gains, DTC strength, improved AURs, expanding consumer file, and strong liquidity) alongside substantial headwinds (large and rising tariff costs, meaningful margin pressure, EPS decline, higher inventories, and elevated interest/tax costs). Management is taking productivity and demand‑creation actions and is guiding for low‑to‑mid single‑digit sales and operating income growth in 2026, but expects near‑term profit pressure (first half) driven largely by tariffs and financing/tax impacts.Positive Updates
Return to Year‑Over‑Year Revenue Growth
Q4 net sales of $925,000,000, up 8% versus prior year; on a comparable 13‑week basis (ex. 53rd week) consolidated net sales rose 3% year‑over‑year. This marks the first year‑over‑year revenue growth since 2021 (even excluding the 53rd week).
Negative Updates
Material Tariff Headwind
Tariffs meaningfully pressured gross margins. Q4 gross margin was 43.2%, down 460 basis points year‑over‑year, with a gross tariff impact of ~$40,000,000 in the quarter. Management estimates the gross tariff impact was ~$60,000,000 in 2025 and expects the gross impact to rise to over $200,000,000 in 2026 (roughly $150,000,000 increase vs. 2025).
Read all updates
Q4-2025 Updates
Positive
Negative
Return to Year‑Over‑Year Revenue Growth
Q4 net sales of $925,000,000, up 8% versus prior year; on a comparable 13‑week basis (ex. 53rd week) consolidated net sales rose 3% year‑over‑year. This marks the first year‑over‑year revenue growth since 2021 (even excluding the 53rd week).
Read all positive updates
Company Guidance
Carter's 2026 guidance targets net sales growth of low- to mid-single-digits versus 2025, with U.S. Retail up low-single-digits (comp sales mid-single-digits; Q1 Retail growth expected high-single-digits with comps mid-single-digits), U.S. Wholesale up mid-single-digits for the year but down low-single-digits in Q1, and International up mid-single-digits for the year (double-digit in Q1); adjusted operating income is expected to grow low- to mid-single-digits year-over-year but be back‑half weighted (Q1 adjusted operating income $12M–$15M); full-year gross margin is expected to decline somewhat vs. 2025 with Q1 gross margin down ~400 bps; the company assumes a gross tariff impact of over $200M in 2026 (vs. ~$60M in 2025) offset materially by planned mid-single-digit pricing gains and supply‑chain mitigation; net interest expense is expected at just under $40M for the year (≈$9M in Q1) with a ~ $0.30 EPS headwind from higher interest, the full-year effective tax rate is planned at ~22% (Q1 ~37% due to stock‑comp effects), adjusted EPS is expected to be down low‑double‑digits to down mid‑teens vs. 2025’s $3.47, operating cash flow is planned at $110M–$120M, CapEx about $55M, and productivity actions (including ~60 store closures in 2026, ~$35M of workforce savings and roughly $40M of SG&A productivity benefit) are expected to largely offset investments in demand creation and technology.Carter's Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
61
Positive
Cash Flow
36
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.90B | 2.84B | 2.95B | 3.21B | 3.49B |
| Gross Profit | 1.31B | 1.37B | 1.40B | 1.47B | 1.66B |
| EBITDA | 203.32M | 343.49M | 400.35M | 424.79M | 592.69M |
| Net Income | 91.80M | 185.51M | 232.50M | 250.04M | 339.75M |
Balance Sheet | |||||
| Total Assets | 2.57B | 2.43B | 2.38B | 2.44B | 3.19B |
| Cash, Cash Equivalents and Short-Term Investments | 487.07M | 412.93M | 351.21M | 211.75M | 984.29M |
| Total Debt | 1.21B | 1.13B | 1.08B | 1.18B | 1.57B |
| Total Liabilities | 1.64B | 1.58B | 1.53B | 1.64B | 2.24B |
| Stockholders Equity | 925.05M | 854.56M | 845.25M | 796.41M | 950.19M |
Cash Flow | |||||
| Free Cash Flow | 68.63M | 242.62M | 469.27M | 48.00M | 230.82M |
| Operating Cash Flow | 122.33M | 298.79M | 529.13M | 88.36M | 268.26M |
| Investing Cash Flow | -53.70M | -56.16M | -59.86M | -40.36M | -32.44M |
| Financing Cash Flow | 2.04M | -174.82M | -332.64M | -819.27M | -352.71M |
Carter's Technical Analysis
Negative
34.80
Price Trends
36.48
Negative
34.64
Positive
31.78
Positive
Market Momentum
-0.14
Negative
46.70
Neutral
29.77
Neutral
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 34.8 is below the 20-day moving average (MA) of 35.07, below the 50-day MA of 36.48, and above the 200-day MA of 31.78, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 46.70 is Neutral, neither overbought nor oversold. The STOCH value of 29.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $354.52M | 22.59 | 2.46% | ― | 2.76% | 96.01% | |
60 Neutral | $442.33M | -60.75 | -12.23% | ― | -0.08% | 73.05% | |
54 Neutral | $4.05B | 28.27 | 22.70% | ― | 2.97% | 9.85% | |
52 Neutral | $1.26B | 12.82 | 10.27% | 4.89% | -0.34% | -61.00% | |
41 Neutral | $63.08M | -0.50 | 532.94% | ― | -10.09% | 81.44% |
* Consumer Cyclical Sector Average
CRI
Carter's
34.80
0.05
0.16%
GCO
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32.93
15.01
83.76%
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2.99
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-44.93%
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VSCO
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48.55
32.62
204.77%
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.