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Jun 28, 2025
Carter's Q2 2025 Earnings Report
Carter's reported Q2 2025 results with modest sales growth but significantly lower profitability.
Key Takeaways
Carter’s delivered $585.3M in revenue for Q2 2025, driven by U.S. Retail and International growth. However, net income fell sharply to $0.4M, and operating income dropped to $4.0M due to higher costs, pricing investments, and leadership transition expenses.
Revenue grew 3.7% YoY to $585.3M, driven by U.S. Retail and International segments.
Net income plunged to $0.4M from $27.6M YoY.
Adjusted EPS was $0.17 versus $0.76 last year.
International sales rose 14.1%, outpacing other segments.
Revenue by Segment
Forward Guidance
Carter’s remains cautious amid tariff uncertainties and has suspended full-year guidance, focusing on stabilizing retail momentum and cost management.
Positive Outlook
- U.S. Retail comparable sales increased 2.2%.
- International segment growth strong at 14.1%.
- Improved store traffic and Baby apparel demand in the U.S.
- Sequential AUM growth in Canada and Mexico.
- CEO emphasized long-term strategy focused on brand loyalty.
Challenges Ahead
- Operating margin collapsed to 0.7% from 7.0% YoY.
- Net income dropped sharply YoY.
- Higher performance-based compensation pressured profits.
- Investments in pricing and new stores reduced profitability.
- Tariff uncertainties pose significant future cost risks.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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