Carter's Q1 Revenue of $681M Beats Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 06 2026
0mins
Reports Q1 revenue $681M, consensus $660.8M. U.S. Retail comparable sales increased 10.5%, the fourth consecutive quarter of growth. "We saw strong demand for our brands during the first quarter across each of our U.S. Retail, U.S. Wholesale and International channels," said Richard Westenberger, interim Chief Executive Officer & President, Chief Financial Officer & Chief Operating Officer. "We posted strong results over the Easter holiday selling period which occurred earlier this year and our investments in marketing drove meaningful traffic increases in our U.S. Retail store and eCommerce businesses. Our profitability in the quarter was negatively affected by higher tariffs, investment spending and other inflationary cost pressures and higher interest costs. We expect the impact of these items to moderate as we move through the year and today we have reiterated our full year outlook for both sales and operating profit growth in 2026. As announced last week, we look forward to welcoming Sharon Price John as our new Chief Executive Officer next month. Sharon's extensive industry experience, especially in the children's space, and her demonstrated record of success position her well to lead the next chapter of Carter's transformation and growth."
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Analyst Views on CRI
Wall Street analysts forecast CRI stock price to fall
3 Analyst Rating
1 Buy
0 Hold
2 Sell
Moderate Sell
Current: 38.150
Low
25.00
Averages
34.67
High
50.00
Current: 38.150
Low
25.00
Averages
34.67
High
50.00
About CRI
Carter's, Inc. is a marketer of young children's apparel in North America. Its segments include U.S. Retail, U.S. Wholesale, and International. The U.S. Retail segment includes sales of products in the United States through its retail stores and eCommerce websites. The U.S. Wholesale segment consists of sales in the United States of products to its wholesale partners. The International segment includes sales of products outside the United States, through its retail stores and e-commerce websites in Canada and Mexico, and sales to its international wholesale customers and licensees. It owns Carter's and OshKosh B'gosh brands. These brands are sold in department stores, national chains, and specialty retailers domestically and internationally. They are also sold through nearly 1,000 Company-operated stores in the United States, Canada, and Mexico and online at www.carters.com, www.oshkosh.com, www.cartersoshkosh.ca, and www.carters.com.mx. It also owns Little Planet and Skip Hop brands.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Analysis of Prospects in the Footwear and Retail Apparel Industry
- Industry Growth Drivers: The footwear and retail apparel industry benefits from premium brands and product innovation, as consumer preference for high-performance, high-quality products enhances brand loyalty and pricing power, which is expected to drive overall sales growth.
- Accelerated Digital Transformation: Brands are significantly increasing investments in e-commerce and direct-to-consumer channels, enhancing customer relationships and inventory efficiency through data analytics and faster delivery, thereby strengthening market competitiveness and profitability.
- Cost Pressure Challenges: Despite the overall positive outlook for the industry, sustained margin pressure from high promotional intensity and rising costs for materials, freight, and wages is forcing brands to compromise on pricing to maintain sales volumes.
- Future Growth Reliance on Innovation: Sustainable growth in the industry will depend on innovation capabilities, digital proficiency, and supply chain agility, with leading brands like Adidas and Steven Madden actively seeking long-term growth opportunities while managing near-term challenges.
See More
Carter's Earnings Report Disappoints, Yet Shareholders Remain Unfazed
- Profit Performance Analysis: Carter's reported a statutory profit reduction of $17 million over the past year due to unusual items; however, analysts believe these unusual expenses are unlikely to recur, potentially leading to improved future profits.
- Future Profit Expectations: The impact of unusual items suggests that Carter's statutory profit may understate its earnings potential, with analysts forecasting better performance in the current quarter, despite a decline in earnings per share over the past year.
- Shareholder Reaction: Despite the lackluster earnings report, shareholders appear unconcerned, indicating confidence in the company's strong fundamentals, which may benefit from future profit improvements.
- Risk Warnings: The analysis highlights two warning signs for Carter's, suggesting that while focusing on profit potential, investors should also consider these risks to make more informed investment decisions.
See More
Carter's Declares Quarterly Dividend of $0.25 per Share
- Quarterly Dividend Declaration: Carter's has declared a quarterly dividend of $0.25 per share, consistent with previous distributions, indicating the company's stable cash flow and shareholder return strategy, which is likely to attract more investor interest.
- Dividend Yield: The forward yield of 2.96% reflects the company's appeal in the current market environment, potentially boosting investor confidence and supporting stock price stability.
- Payment Schedule: The dividend is payable on June 5, with a record date of May 26 and an ex-dividend date also on May 26, providing shareholders with a clear timeline that aids in financial planning.
- Earnings Beat Expectations: Carter's reported a non-GAAP EPS of $0.39 for Q1 2026, exceeding expectations by $0.26, with revenue of $681 million surpassing estimates by $20.2 million, demonstrating the company's robust performance amid tariff uncertainties.
See More
Aristides Capital Increases Stake in Carter's by 90,533 Shares
- Share Increase: Aristides Capital increased its stake in Carter's by 90,533 shares in Q1 2026, with an estimated trade value of $3.29 million, indicating confidence in the brand's potential recovery.
- Position Value Growth: Following the purchase, Carter's comprised 1.27% of Aristides Capital's 13F reportable assets, with the total position value increasing by $3.48 million due to share price movements, reflecting heightened market interest in the brand.
- Sales Growth Momentum: Carter's reported an 8.1% year-over-year sales increase to $681 million in Q1, with U.S. retail comparable sales rising 10.5%, indicating a rebound in demand across retail and international markets.
- Ongoing Profitability Pressure: Despite sales growth, Carter's adjusted operating margin fell from 5.6% to 4.2%, primarily due to tariffs, interest expenses, and inflation, suggesting that long-term investors should monitor the recovery of its profitability.
See More
Carter's (CRI) Q1 2026 Earnings Transcript
See More
Carter's Q1 2026 Earnings Exceed Expectations Amid Leadership Transition
- Leadership Transition: Carter's announced the departure of CEO Doug Palladini, with Sharon Price John set to take over next month, which may impact the company's strategic direction and market confidence.
- Performance Exceeds Expectations: The first quarter net sales reached $681 million, an 8% year-over-year increase, although earnings per share of $0.39 fell from $0.43 last year, indicating sales growth amid profitability pressures.
- Margin Pressure: The gross margin for the first quarter decreased to 43.1%, down over 300 basis points year-over-year due to tariff impacts, which is expected to continue affecting future profitability.
- Cautious Market Outlook: Management reiterated full-year sales and earnings guidance, expecting net sales growth in the low to mid-single digits for 2025, while facing challenges from a consumer increasingly focused on price, indicating ongoing market uncertainties.
See More
Analysis of Prospects in the Footwear and Retail Apparel Industry
- Industry Growth Drivers: The footwear and retail apparel industry benefits from premium brands and product innovation, as consumer preference for high-performance, high-quality products enhances brand loyalty and pricing power, which is expected to drive overall sales growth.
- Accelerated Digital Transformation: Brands are significantly increasing investments in e-commerce and direct-to-consumer channels, enhancing customer relationships and inventory efficiency through data analytics and faster delivery, thereby strengthening market competitiveness and profitability.
- Cost Pressure Challenges: Despite the overall positive outlook for the industry, sustained margin pressure from high promotional intensity and rising costs for materials, freight, and wages is forcing brands to compromise on pricing to maintain sales volumes.
- Future Growth Reliance on Innovation: Sustainable growth in the industry will depend on innovation capabilities, digital proficiency, and supply chain agility, with leading brands like Adidas and Steven Madden actively seeking long-term growth opportunities while managing near-term challenges.
See More
Carter's Earnings Report Disappoints, Yet Shareholders Remain Unfazed
- Profit Performance Analysis: Carter's reported a statutory profit reduction of $17 million over the past year due to unusual items; however, analysts believe these unusual expenses are unlikely to recur, potentially leading to improved future profits.
- Future Profit Expectations: The impact of unusual items suggests that Carter's statutory profit may understate its earnings potential, with analysts forecasting better performance in the current quarter, despite a decline in earnings per share over the past year.
- Shareholder Reaction: Despite the lackluster earnings report, shareholders appear unconcerned, indicating confidence in the company's strong fundamentals, which may benefit from future profit improvements.
- Risk Warnings: The analysis highlights two warning signs for Carter's, suggesting that while focusing on profit potential, investors should also consider these risks to make more informed investment decisions.
See More
Carter's Declares Quarterly Dividend of $0.25 per Share
- Quarterly Dividend Declaration: Carter's has declared a quarterly dividend of $0.25 per share, consistent with previous distributions, indicating the company's stable cash flow and shareholder return strategy, which is likely to attract more investor interest.
- Dividend Yield: The forward yield of 2.96% reflects the company's appeal in the current market environment, potentially boosting investor confidence and supporting stock price stability.
- Payment Schedule: The dividend is payable on June 5, with a record date of May 26 and an ex-dividend date also on May 26, providing shareholders with a clear timeline that aids in financial planning.
- Earnings Beat Expectations: Carter's reported a non-GAAP EPS of $0.39 for Q1 2026, exceeding expectations by $0.26, with revenue of $681 million surpassing estimates by $20.2 million, demonstrating the company's robust performance amid tariff uncertainties.
See More
Aristides Capital Increases Stake in Carter's by 90,533 Shares
- Share Increase: Aristides Capital increased its stake in Carter's by 90,533 shares in Q1 2026, with an estimated trade value of $3.29 million, indicating confidence in the brand's potential recovery.
- Position Value Growth: Following the purchase, Carter's comprised 1.27% of Aristides Capital's 13F reportable assets, with the total position value increasing by $3.48 million due to share price movements, reflecting heightened market interest in the brand.
- Sales Growth Momentum: Carter's reported an 8.1% year-over-year sales increase to $681 million in Q1, with U.S. retail comparable sales rising 10.5%, indicating a rebound in demand across retail and international markets.
- Ongoing Profitability Pressure: Despite sales growth, Carter's adjusted operating margin fell from 5.6% to 4.2%, primarily due to tariffs, interest expenses, and inflation, suggesting that long-term investors should monitor the recovery of its profitability.
See More
Carter's (CRI) Q1 2026 Earnings Transcript
See More
Carter's Q1 2026 Earnings Exceed Expectations Amid Leadership Transition
- Leadership Transition: Carter's announced the departure of CEO Doug Palladini, with Sharon Price John set to take over next month, which may impact the company's strategic direction and market confidence.
- Performance Exceeds Expectations: The first quarter net sales reached $681 million, an 8% year-over-year increase, although earnings per share of $0.39 fell from $0.43 last year, indicating sales growth amid profitability pressures.
- Margin Pressure: The gross margin for the first quarter decreased to 43.1%, down over 300 basis points year-over-year due to tariff impacts, which is expected to continue affecting future profitability.
- Cautious Market Outlook: Management reiterated full-year sales and earnings guidance, expecting net sales growth in the low to mid-single digits for 2025, while facing challenges from a consumer increasingly focused on price, indicating ongoing market uncertainties.
See More
