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Dec 28, 2019
Carter's Q4 2019 Earnings Report
Carter's achieved its fourth quarter sales objective with growth driven by retail and international businesses, but profitability was lower than last year due to continued investments and higher inventory-related costs.
Key Takeaways
Carter's, Inc. reported a 1.3% increase in net sales to $1.1 billion for the fourth quarter of fiscal 2019, driven by growth in the U.S. Retail and International segments. Diluted EPS was $2.82, while adjusted diluted EPS was $2.81, a decline of 1.1%. Profitability in the quarter was lower than the previous year, reflecting continued investments in the business and higher inventory-related costs.
Net sales increased by 1.3% to $1.1 billion, driven by U.S. Retail and International segments.
Diluted EPS was reported at $2.82, with adjusted diluted EPS at $2.81, reflecting a 1.1% decrease.
Operating income decreased by 4.6% to $162.8 million, with operating margin decreasing to 14.8%.
The Board of Directors authorized a new $500 million share repurchase program and a 20% increase in the quarterly dividend.
Revenue by Segment
Forward Guidance
For fiscal year 2020, the company projects net sales will increase approximately 2% to 3% and adjusted diluted earnings per share will increase approximately 4% to 6% compared to adjusted diluted earnings per share of $6.46 in fiscal 2019.
Positive Outlook
- Net sales are projected to increase by 2% to 3%.
- Adjusted diluted earnings per share are expected to increase by 4% to 6%.
- New share repurchase program authorized for $500 million.
- Quarterly cash dividend increased by 20% to $0.60 per share.
- Company returned $287 million to shareholders through share repurchases and dividends in fiscal 2019
Challenges Ahead
- Expenses of approximately $10 million to $12 million related to organizational restructurings are anticipated.
- The company is monitoring the outbreak of a respiratory illness caused by a novel coronavirus, which may affect textile production and manufacturing.
- The financial impact of any delayed receipts from China is not known at this time.
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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