Apparel retailer Carter's Q2 sales rise, sees tariff impact in H2 FY 25

Carters

25/07/2025 11:13

Overview

Carter's Q2 fiscal 2025 net sales rose 4% to $585 mln

Adjusted EPS of $0.17 missed analyst expectations, per LSEG data

Co returned $38 mln to shareholders via dividends in H1 fiscal 2025

Outlook

Company suspends fiscal 2025 guidance due to leadership changes and tariff uncertainties

Carter's anticipates $35 mln net additional tariff impact in H2 fiscal 2025

Company plans to offset tariff costs through assortment changes and price increases

Result Drivers

SALES GROWTH - Driven by stabilization and momentum in direct-to-consumer businesses, particularly in U.S., Canada, and Mexico

PROFITABILITY DECLINE - Impacted by investments in pricing, new stores, performance-based compensation, and higher tariffs

U.S. RETAIL MOMENTUM - Store traffic, purchase conversion, and demand for core Baby apparel products showed improvement, per CEO Palladini

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Sales
$585 mln
Q2 Adjusted EPS
Miss
$0.17
$0.39 (6 Analysts)
Q2 EPS
$0.01
Q2 Adjusted Net Income
Miss
$6.30 mln
$13.10 mln (5 Analysts)
Q2 Net Income
$400,000
Q2 Adjusted Operating Income
Miss
$11.80 mln
$23.70 mln (5 Analysts)
Q2 Adjusted Operating Margin
2.0%
Q2 Operating Income
$4 mln


Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 4 "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 $30.00, about 9.2% below its July 24 closing price of $32.75

The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nBw41g98ma

(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.)