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Dec 28, 2024
Carter's Q4 2024 Earnings Report
Carter's reported slight increase in net sales, but a decrease in operating margin and diluted EPS compared to the same quarter last year.
Key Takeaways
Carter's, Inc. reported its fourth quarter and fiscal year 2024 results. Net sales increased slightly, but operating margin and diluted EPS decreased compared to the fourth quarter of fiscal 2023. The company's U.S. Wholesale segment grew, while U.S. Retail and International segments declined. Macroeconomic factors continued to weigh on families with young children and demand for the company's brands.
Net sales increased $1.8 million, or 0.2%, to $859.7 million.
Operating margin decreased 620 basis points to 9.7%.
Adjusted operating margin decreased 250 basis points to 13.4%.
Diluted earnings per share decreased 41.0% to $1.71.
Revenue by Segment
Forward Guidance
For fiscal year 2025, the Company projects net sales of $2.780 billion to $2.855 billion, adjusted operating income of $180 million to $210 million, and adjusted diluted earnings per share of $3.20 to $3.80.
Positive Outlook
- Sales and earnings contributions weighted to the second half, driven by planned improvements in our product assortments and a better overall inventory position in the second half
- Targeted pricing investments and freight costs to be less impactful in the second half
- Comparable to a mid-single-digit decline in U.S. Retail sales
- Low single-digit growth to a low single-digit decline in U.S. Wholesale sales
- Low single-digit growth to comparable International sales
Challenges Ahead
- Lower gross margin rate, reflecting targeted retail pricing investments, changes in customer mix within wholesale, adverse currency exchange rate impacts, and higher product costs
- Increased SG&A, principally reflecting higher variable compensation provisions and growth-related investments, partially offset by productivity initiatives
Historical Earnings Impact
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Avg. Return Before/After Earnings
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