Carter's, Inc. Reports Third Quarter Fiscal 2024 Results
Carter's, Inc. (NYSE:CRI), the largest branded marketer of apparel exclusively for babies and young children in North America, announced their financial results for the third quarter of the fiscal year 2024, demonstrating a blend of resilience and strategic adaptability in challenging economic conditions.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | YoY Change | Consensus Estimates |
|---|---|---|---|---|
| Net Sales | $758M | $792M | -4.2% | $755.61M |
| Operating Margin | 10.2% | 11.8% | -1.6 pp | N/A |
| Adjusted Operating Margin | 10.2% | 12.2% | -2.0 pp | N/A |
| Diluted EPS | $1.62 | $1.78 | -9.0% | $1.40 |
| Adjusted Diluted EPS | $1.64 | $1.84 | -10.9% | N/A |
Professional Interpretation : Carter’s exhibited a decline in both revenue and profitability year-over-year, which can be attributed to macroeconomic pressures such as inflation affecting consumer spending. However, the company exceeded the consensus revenue and earnings estimates for Q3 2024, showcasing strategic efficiency despite declining sales figures.
Revenue Breakdown by Segment
| Segment | Q3 2024 | YoY Change | Comments |
|---|---|---|---|
| U.S. Retail Sales | Down | -7.1% | Sales driven by improved pricing and marketing |
| U.S. Wholesale Sales | In line | Exclusive brand growth offset by department store decline | |
| International Sales | Down | -8.6% | Affected by weaker cooler apparel sales and currency factors |
Professional Interpretation : Carter’s U.S. Retail segment outperformed expectations due to strategic investments in pricing and brand marketing, while the international segment reflects challenges primarily from unfavorable weather impacts and currency fluctuations.
Key Developments and Operational Highlights
- Returned $138 million to shareholders via dividends and share repurchases during the first three quarters of fiscal 2024.
- Improved financial position: ended the third quarter with over $1 billion in liquidity without seasonal borrowings.
- Investment plans include $40 million in competitive pricing and $10 million in brand marketing.
- Reaffirmed fiscal year 2024 sales and profitability outlook, with an increased adjusted EPS projection.
Comments from Company Officers
Michael D. Casey, Chairman and CEO, highlighted a stronger-than-expected performance in U.S. Retail sales, crediting the company's strategic initiatives. He noted the company's focus on consolidating its market position amidst economic challenges, driven by successful pricing and enhanced customer reach through their partnership with major retailers like Target, Walmart, and Amazon.
Dividends and Share Repurchase
Carter’s issued a cash dividend of $0.80 per share in Q3 2024, totaling $28.8 million. The company also repurchased approximately 0.3 million shares for $16.7 million in the same period, exhibiting a commitment to returning capital to shareholders.
Forward Guidance
Carter’s reaffirmed its fiscal year 2024 guidance, projecting net sales between $2.785 billion and $2.825 billion and increased adjusted diluted EPS ranging from $4.70 to $5.15. The company anticipates continued strategic investments and macroeconomic pressure influencing consumer demand.
Stock Price Movement
Following the earnings release, Carter’s stock experienced a modest increase of approximately 0.9%, reflecting investor confidence in its strategic adjustments and robust market position.
In conclusion, despite external economic pressures, Carter's demonstrated strategic resilience and adaptiveness, leveraging its strong market position and efficient operational strategies to sustain shareholder value. The company continues to navigate through challenging times with a focus on consolidating its leadership in the children’s apparel market.
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