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Jul 01, 2023
Carter's Q2 2023 Earnings Report
Reported second quarter fiscal 2023 results, achieving sales and earnings objectives.
Key Takeaways
Carter's, Inc. reported a decrease in net sales by 14.3% to $600.2 million compared to the second quarter of fiscal 2022. Diluted EPS and adjusted diluted EPS both stood at $0.64. The company returned $58 million to shareholders through share repurchases and dividends. The company is forecasting a significant improvement in operating cash flow this year which they expect will enable Carter’s to continue investing in our growth strategies and returning excess capital to our shareholders through dividends and share repurchases.
Net sales were $600 million.
Diluted EPS was $0.64; adjusted diluted EPS was $0.64.
Returned $58 million to shareholders through share repurchases and dividends in Q2; $97 million returned in the first half of fiscal 2023.
Comparable retail sales in the second quarter were in line with forecast.
Revenue by Segment
Forward Guidance
For the third quarter of fiscal 2023, the Company expects approximately: •$770 million to $790 million in net sales (compared to $819 million in Q3 fiscal 2022); •$80 million to $85 million in adjusted operating income (compared to $92 million in Q3 fiscal 2022); and •$1.45 to $1.55 in adjusted diluted earnings per share (compared to $1.67 in Q3 fiscal 2022).
Positive Outlook
- Improved gross margin, reflecting improved price realization and lower transportation and inventory-related costs
- Lower average number of shares outstanding
- In the second half, improved demand trend as inflation moderates
- Gross margin expansion, driven by improved price realization and lower transportation and inventory-related costs
- Continued return of excess capital
Challenges Ahead
- Continued macroeconomic pressure on consumer demand and cautious inventory commitments by wholesale customers
- SG&A rate deleverage on lower sales
- Comparable interest expense and a higher effective tax rate
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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