Carter’s (NYSE:CRI) Announces Earnings Results, Beats Estimates By $0.20 EPS

Carter’s (NYSE:CRI) released its earnings results on Friday. The textile maker reported $1.90 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.70 by $0.20, FiscalAI reports. Carter’s had a net margin of 3.15% and a return on equity of 16.71%. The business had revenue of $925.45 million for the quarter, compared to analyst estimates of $912.36 million. During the same quarter in the previous year, the business earned $2.39 earnings per share. Carter’s’s revenue for the quarter was up 7.7% on a year-over-year basis. Carter’s updated its Q1 2026 guidance to 0.020-0.080 EPS.

Here are the key takeaways from Carter’s’ conference call:

• Carter’s reported a return to growth in 2025 with Q4 net sales up 8% (3% on a 13‑week basis), the third consecutive quarter of retail comp growth, higher AURs, D2C strength, and new customer gains among Gen Z and millennial families.
• Tariffs remain a material headwind — roughly $60M gross hit in 2025 and management expects the gross impact to rise to just over $200M in 2026 (about a $150M incremental increase), with first‑half pressure and guidance that excludes any potential recent tariff relief.
• 2026 guidance assumes net sales growth of low‑ to mid‑single digits and adjusted operating income growth in the same range, but EPS is expected to decline low‑double‑digits to mid‑teens versus 2025 due to higher interest (~$0.30 impact) and a higher tax rate (~22%), with results back‑end weighted and a weak first half.
• Management is pushing productivity initiatives and demand creation — roughly $40M of SG&A productivity (including ~$35M from workforce actions), about 60 store closures planned in 2026 (≈150 through 2028), and reinvestment in product make, marketing and technology to drive sustainable margin improvement.
• Balance sheet liquidity is strong with over $1B available (≈$500M cash) and a debt refinancing (new $575M 5‑year notes and $750M ABL), though inventories are elevated (≈$50M) due to higher tariffs even as seasonal mix and excess levels improved.

Carter’s Stock Performance

Shares of NYSE:CRI traded down $8.55 during midday trading on Friday, reaching $33.52. The company had a trading volume of 4,817,550 shares, compared to its average volume of 1,327,514. The company has a current ratio of 2.26, a quick ratio of 0.95 and a debt-to-equity ratio of 0.58. The stock has a market cap of $1.22 billion, a P/E ratio of 13.57 and a beta of 1.06. The company’s 50 day moving average price is $36.39 and its 200 day moving average price is $32.21. Carter’s has a 52-week low of $23.38 and a 52-week high of $44.44.

Key Headlines Impacting Carter’s

Here are the key news stories impacting Carter’s this week:

• Positive Sentiment: Q4 beat on top and bottom lines — Carter’s posted $1.90 EPS vs. $1.70 expected and revenue of $925.45M (up ~7.6% year-over-year), showing sales momentum across segments. This is the primary fundamental upside in the print. Carter’s (CRI) Q4 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Management cites improving traffic, new customer acquisition and sequential momentum in product demand in the press release and slide deck — evidence company-level initiatives are working even as margins are challenged. Business Wire: Carter’s Reports Fourth Quarter and Fiscal Year 2025 Results
• Neutral Sentiment: Industry context: analysts note Carter’s sits within apparel players leaning into premiumization and digital, a tailwind for growth but one that also brings higher costs and promotional risk — relevant but mixed for near-term earnings. 5 Shoes & Retail Apparel Stocks Capitalizing on Premiumization Trends
• Negative Sentiment: Soft forward guidance drove the sell-off — management lowered Q1 and FY26 EPS expectations (despite guiding to higher sales), signaling margin compression and lower profitability ahead; that outlook is the principal reason the stock is down. Carter’s Q4 Earnings Beat Estimates, Shares Fall on Soft EPS View
• Negative Sentiment: Margin pressure, tariff headwinds and weakening cash generation are being called out by commentators as structural near-term risks; these items amplify fears that higher sales won’t translate into proportional EPS growth. Carter’s (CRI) Shares Plunge on Margin Pressure, Tariff Headwinds, and Weakening Cash Generation
• Negative Sentiment: Gross-margin and pricing-power concerns highlighted by analysts could force more promotional activity or higher costs, pressuring near-term margins and investor expectations. Carter’s Gross Margins Show Challenges With Pricing Power

Analyst Ratings Changes

CRI has been the topic of several research analyst reports. Citigroup raised shares of Carter’s from a “neutral” rating to a “buy” rating and increased their target price for the stock from $34.00 to $50.00 in a research note on Wednesday, January 21st. Weiss Ratings upgraded shares of Carter’s from a “sell (d+)” rating to a “hold (c-)” rating in a report on Thursday, February 19th. The Goldman Sachs Group increased their price objective on shares of Carter’s from $26.00 to $29.00 and gave the stock a “sell” rating in a research report on Tuesday, January 13th. Zacks Research raised Carter’s from a “hold” rating to a “strong-buy” rating in a research report on Monday, January 19th. Finally, Wall Street Zen raised Carter’s from a “sell” rating to a “hold” rating in a research note on Sunday, January 11th. One analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, two have assigned a Hold rating and three have assigned a Sell rating to the company’s stock. According to MarketBeat, Carter’s currently has an average rating of “Hold” and a consensus price target of $34.00.

Institutional Trading of Carter’s

Several hedge funds have recently made changes to their positions in CRI. AQR Capital Management LLC grew its stake in shares of Carter’s by 113.7% during the 2nd quarter. AQR Capital Management LLC now owns 2,564,457 shares of the textile maker’s stock worth $77,267,000 after acquiring an additional 1,364,698 shares during the period. Morgan Stanley boosted its position in Carter’s by 15.7% during the fourth quarter. Morgan Stanley now owns 1,762,036 shares of the textile maker’s stock worth $57,143,000 after purchasing an additional 239,469 shares during the period. Charles Schwab Investment Management Inc. boosted its position in Carter’s by 5.4% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 1,597,901 shares of the textile maker’s stock worth $51,820,000 after purchasing an additional 82,498 shares during the period. Geode Capital Management LLC increased its stake in shares of Carter’s by 7.7% in the fourth quarter. Geode Capital Management LLC now owns 856,803 shares of the textile maker’s stock worth $27,791,000 after purchasing an additional 61,348 shares in the last quarter. Finally, Goldman Sachs Group Inc. raised its position in shares of Carter’s by 69.5% in the fourth quarter. Goldman Sachs Group Inc. now owns 738,067 shares of the textile maker’s stock valued at $23,936,000 after purchasing an additional 302,751 shares during the period.

Carter’s Company Profile

Carter’s, Inc (NYSE: CRI) is a leading designer and marketer of infant and young children’s apparel in North America. Headquartered in Atlanta, Georgia, the company’s core business focuses on creating clothing and accessories for babies and children, including bodysuits, sleepwear, layette, outerwear and accessories that blend comfort, safety and style. Carter’s flagship brand is complemented by its OshKosh B’gosh line, which offers heritage-inspired designs and durable fabrics for toddlers and young kids.

The company distributes its products through a diversified platform that includes wholesale partnerships with major department stores and mass merchandisers, direct‐to‐consumer e-commerce sites, and an extensive network of company-operated retail stores.