Overview

* Carter's Q3 net sales were flat yr/yr at $758 mln

* Adjusted EPS for Q3 beats analyst expectations

* Company to cut 300 office-based positions, close 150 stores, cut $10 mln annual spending across categories

* CEO and Board of Directors to reduce their 2026 compensation

Outlook

* Carter's to close 150 stores over the next three years vs 100 stores planned earlier

* Company expects $35 mln annual savings from restructuring starting 2026

* Carter's suspends fiscal 2025 guidance due to tariff uncertainty

Result Drivers

* U.S. RETAIL DEMAND - Improved demand in U.S. Retail business with positive comparable sales and better pricing

* HIGHER COSTS - Elevated product costs and additional investments weighed on profitability

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q3 Sales $758 mln

Q3 Beat $0.74 $0.73 (5

Adjusted Analysts

EPS )

Q3 EPS $0.32

Q3 Beat $26.8 $24.2

Adjusted mln mln (4

Net Analysts

Income )

Q3 Net $11.6

Income mln

Q3 Beat $39.4 $38.5

Adjusted mln mln (4

Operatin Analysts

g Income )

Q3 5.20%

Adjusted

Operatin

g Margin

Q3 $29.1

Operatin mln

g Income

Analyst Coverage

* The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 3 "hold" and 3 "sell" or "strong sell"

* The average consensus recommendation for the apparel & accessories retailers peer group is "buy."

* Wall Street's median 12-month price target for Carter's Inc is $25.00, about 29.4% below its October 24 closing price of $32.35

* The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 10 three months ago

Press Release:

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)