Carter's (NYSE:CRI) Releases Quarterly Earnings Results, Beats Expectations By $0.26 EPS

Key Points

• Q1 EPS of $0.39 beat estimates by $0.26 and revenue was $681.11 million (up 8.1% YoY); Carter's updated Q2 2026 guidance to $0.02–$0.06.
• Gross margin declined roughly 300 basis points largely due to about $50 million of incremental tariffs, which drove adjusted EPS down from $0.66 a year ago and left management warning of continued tariff uncertainty.
• The company is investing in demand creation (≈$20M incremental marketing) while delivering ~$6M of productivity savings to support H2 operating income growth; shares rose to $38.37 and Carter's pays a $0.25 quarterly dividend (≈2.6% yield).

Carter's (NYSE:CRI - Get Free Report) posted its quarterly earnings data on Wednesday. The textile maker reported $0.39 EPS for the quarter, topping analysts' consensus estimates of $0.13 by $0.26, FiscalAI reports. The firm had revenue of $681.11 million during the quarter, compared to analyst estimates of $660.59 million. Carter's had a net margin of 3.17% and a return on equity of 14.45%. The company's revenue was up 8.1% on a year-over-year basis. During the same quarter last year, the business posted $0.66 EPS. Carter's updated its Q2 2026 guidance to 0.020-0.060 EPS.

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

• Q1 net sales were $681 million (up 8% YoY) with U.S. Retail comps up ~10% (fourth consecutive quarter) driven by higher traffic across stores and e‑commerce.
• Q1 gross margin declined by roughly 300 basis points, largely from about $50 million of incremental tariffs, and adjusted EPS fell to $0.39 from $0.66 a year ago.
• Management reiterated full‑year guidance (low‑ to mid‑single digit sales growth; operating income up low‑mid single digits; EPS down low double‑digits to mid‑teens) but emphasized continued tariff uncertainty and that any tariff relief might be partially reinvested into pricing competitiveness.
• Company is stepping up demand creation (≈$20M incremental marketing) while delivering productivity savings (~$6M in Q1) and cites successful collaborations and Gen Z traction as drivers for planned H2 operating income growth.

Carter's Stock Performance

CRI stock traded up $5.03 during midday trading on Wednesday, hitting $38.37. 1,167,469 shares of the company traded hands, compared to its average volume of 1,263,309. The business has a 50 day simple moving average of $36.14 and a 200-day simple moving average of $34.55. Carter's has a twelve month low of $23.38 and a twelve month high of $44.44. The stock has a market capitalization of $1.41 billion, a price-to-earnings ratio of 15.22, a price-to-earnings-growth ratio of 4.93 and a beta of 0.86. The company has a quick ratio of 1.44, a current ratio of 2.51 and a debt-to-equity ratio of 0.61.

Carter's Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Friday, March 27th. Stockholders of record on Friday, March 13th were issued a dividend of $0.25 per share. The ex-dividend date of this dividend was Friday, March 13th. This represents a $1.00 dividend on an annualized basis and a dividend yield of 2.6%. Carter's's dividend payout ratio is currently 39.68%.

Analyst Ratings Changes

Several equities analysts have recently commented on CRI shares. Monness Crespi & Hardt upgraded shares of Carter's from a "neutral" rating to a "buy" rating and set a $45.00 price target on the stock in a report on Monday, March 2nd. Wells Fargo & Company lifted their price objective on Carter's from $28.00 to $33.00 and gave the company an "underweight" rating in a research report on Wednesday, April 29th. The Goldman Sachs Group upgraded Carter's from a "neutral" rating to a "buy" rating and set a $38.00 target price on the stock in a research note on Thursday, April 9th. Needham & Company LLC assumed coverage on Carter's in a research note on Thursday, March 26th. They set a "hold" rating for the company. Finally, Citigroup upgraded Carter's from a "neutral" rating to a "buy" rating and lifted their price target for the company from $34.00 to $50.00 in a report on Wednesday, January 21st. One analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating, two have assigned a Hold rating and three have given a Sell rating to the company's stock. Based on data from MarketBeat.com, Carter's has an average rating of "Hold" and an average price target of $38.67.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of the business. UMB Bank n.a. increased its position in Carter's by 445.8% during the fourth quarter. UMB Bank n.a. now owns 775 shares of the textile maker's stock worth $25,000 after acquiring an additional 633 shares during the period. Caitong International Asset Management Co. Ltd grew its position in Carter's by 555.9% in the 3rd quarter. Caitong International Asset Management Co. Ltd now owns 1,115 shares of the textile maker's stock worth $31,000 after purchasing an additional 945 shares during the last quarter. EverSource Wealth Advisors LLC increased its holdings in shares of Carter's by 202.6% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 1,486 shares of the textile maker's stock worth $45,000 after purchasing an additional 995 shares during the period. State of Wyoming raised its position in shares of Carter's by 1,380.6% during the fourth quarter. State of Wyoming now owns 2,132 shares of the textile maker's stock valued at $69,000 after buying an additional 1,988 shares during the last quarter. Finally, Aster Capital Management DIFC Ltd raised its position in shares of Carter's by 612.9% during the fourth quarter. Aster Capital Management DIFC Ltd now owns 2,659 shares of the textile maker's stock valued at $86,000 after buying an additional 2,286 shares during the last quarter.

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.

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