Carter’s (NYSE:CRI) Issues Earnings Results, Beats Estimates By $0.20 EPS

Carter’s (NYSE:CRI) released its quarterly earnings data on Friday. The textile maker reported $1.90 earnings per share for the quarter, beating the consensus estimate of $1.70 by $0.20, FiscalAI reports. Carter’s had a net margin of 3.15% and a return on equity of 16.71%. The firm had revenue of $925.45 million for the quarter, compared to analyst estimates of $912.36 million. During the same quarter in the prior year, the business earned $2.39 EPS. The company’s revenue for the quarter was up 7.7% compared to the same quarter last year. Carter’s updated its Q1 2026 guidance to 0.020-0.080 EPS.

Here are the key takeaways from Carter’s’ conference call:

• Carter’s reported a return to growth in 2025 with Q4 net sales up 8% (3% on a 13‑week basis), the third consecutive quarter of retail comp growth, higher AURs, D2C strength, and new customer gains among Gen Z and millennial families.
• Tariffs remain a material headwind — roughly $60M gross hit in 2025 and management expects the gross impact to rise to just over $200M in 2026 (about a $150M incremental increase), with first‑half pressure and guidance that excludes any potential recent tariff relief.
• 2026 guidance assumes net sales growth of low‑ to mid‑single digits and adjusted operating income growth in the same range, but EPS is expected to decline low‑double‑digits to mid‑teens versus 2025 due to higher interest (~$0.30 impact) and a higher tax rate (~22%), with results back‑end weighted and a weak first half.
• Management is pushing productivity initiatives and demand creation — roughly $40M of SG&A productivity (including ~$35M from workforce actions), about 60 store closures planned in 2026 (≈150 through 2028), and reinvestment in product make, marketing and technology to drive sustainable margin improvement.
• Balance sheet liquidity is strong with over $1B available (≈$500M cash) and a debt refinancing (new $575M 5‑year notes and $750M ABL), though inventories are elevated (≈$50M) due to higher tariffs even as seasonal mix and excess levels improved.

Carter’s Trading Down 20.3%

Shares of CRI stock opened at $33.52 on Friday. Carter’s has a 12 month low of $23.38 and a 12 month high of $44.44. The company has a market cap of $1.22 billion, a PE ratio of 13.57 and a beta of 1.06. The company has a quick ratio of 0.95, a current ratio of 2.26 and a debt-to-equity ratio of 0.58. The business’s 50 day moving average is $36.42 and its two-hundred day moving average is $32.28.

Carter’s Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, March 27th. Shareholders of record on Friday, March 13th will be given a dividend of $0.25 per share. The ex-dividend date of this dividend is Friday, March 13th. This represents a $1.00 dividend on an annualized basis and a yield of 3.0%. Carter’s’s dividend payout ratio is presently 40.49%.

Analyst Ratings Changes

A number of research firms have recently weighed in on CRI. Citigroup raised shares of Carter’s from a “neutral” rating to a “buy” rating and upped their price target for the stock from $34.00 to $50.00 in a research note on Wednesday, January 21st. UBS Group upped their target price on Carter’s from $33.00 to $40.00 and gave the stock a “neutral” rating in a research report on Thursday, February 19th. The Goldman Sachs Group raised their price target on Carter’s from $26.00 to $29.00 and gave the stock a “sell” rating in a research note on Tuesday, January 13th. Wall Street Zen raised Carter’s from a “sell” rating to a “hold” rating in a research note on Sunday, January 11th. Finally, Zacks Research upgraded Carter’s from a “hold” rating to a “strong-buy” rating in a report on Monday, January 19th. One analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, two have given a Hold rating and three have assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company currently has an average rating of “Hold” and a consensus target price of $34.00.

Key Carter’s News

Here are the key news stories impacting Carter’s this week:

• Positive Sentiment: Q4 results beat estimates — stronger sales and an EPS beat, evidence of demand rebound and execution. Carter’s, Inc. Reports Fourth Quarter and Fiscal Year 2025 Results
• Positive Sentiment: Quarterly metrics: revenue and EPS topped estimates and sales grew ~7.6–7.7% year-over-year, supporting topline momentum. Carter’s (CRI) Q4 Earnings and Revenues Surpass Estimates
• Neutral Sentiment: Full press release, slide deck and conference call are available for details on segment trends and management commentary. Press Release / Slide Deck
• Neutral Sentiment: Earnings call transcript and coverage provide the exact cadence of management’s guidance and Q&A for deeper read-throughs. Carter’s (CRI) Q4 2025 Earnings Call Transcript
• Negative Sentiment: Company cut Q1 FY26 EPS guidance to $0.02–$0.08 vs. street $0.36, the primary catalyst for the share decline as investors reprice near-term profitability.
• Negative Sentiment: Analysts and media flagged a weak profit outlook despite the beat, noting the guide drove outsized share weakness. Carter’s slides after weak profit outlook
• Negative Sentiment: Coverage highlights margin pressure and tariff/headwind risks plus concerns about cash generation — factors that explain why FY26 EPS guidance was tempered. Carter’s (CRI) Shares Plunge on Margin Pressure, Tariff Headwinds, and Weakening Cash Generation
• Negative Sentiment: Analysis points to gross-margin challenges and constrained pricing power, which could keep near-term margins under pressure. Carter’s Gross Margins Show Challenges With Pricing Power
• Negative Sentiment: Post-earnings coverage summarizes the beat but underscores the soft guide as the reason shares fell sharply. Carter’s Q4 Earnings Beat Estimates, Shares Fall on Soft EPS View

Institutional Inflows and Outflows

Several institutional investors have recently bought and sold shares of the company. UMB Bank n.a. boosted its holdings in Carter’s by 445.8% during the fourth quarter. UMB Bank n.a. now owns 775 shares of the textile maker’s stock valued at $25,000 after acquiring an additional 633 shares during the period. Caitong International Asset Management Co. Ltd lifted its position in shares of Carter’s by 555.9% during the 3rd quarter. Caitong International Asset Management Co. Ltd now owns 1,115 shares of the textile maker’s stock worth $31,000 after purchasing an additional 945 shares during the last quarter. EverSource Wealth Advisors LLC lifted its position in shares of Carter’s by 202.6% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 1,486 shares of the textile maker’s stock worth $45,000 after purchasing an additional 995 shares during the last quarter. State of Wyoming boosted its stake in Carter’s by 1,380.6% during the 4th quarter. State of Wyoming now owns 2,132 shares of the textile maker’s stock valued at $69,000 after purchasing an additional 1,988 shares during the period. Finally, Aster Capital Management DIFC Ltd grew its holdings in Carter’s by 612.9% in the 4th quarter. Aster Capital Management DIFC Ltd now owns 2,659 shares of the textile maker’s stock valued at $86,000 after buying an additional 2,286 shares during the last quarter.

Carter’s Company Profile

Carter’s, Inc (NYSE: CRI) is a leading designer and marketer of infant and young children’s apparel in North America. Headquartered in Atlanta, Georgia, the company’s core business focuses on creating clothing and accessories for babies and children, including bodysuits, sleepwear, layette, outerwear and accessories that blend comfort, safety and style. Carter’s flagship brand is complemented by its OshKosh B’gosh line, which offers heritage-inspired designs and durable fabrics for toddlers and young kids.

The company distributes its products through a diversified platform that includes wholesale partnerships with major department stores and mass merchandisers, direct‐to‐consumer e-commerce sites, and an extensive network of company-operated retail stores.