Children’s apparel retailer Carter beats Q3 EPS estimates; suspends guidance, to cut jobs and close stores

Carters

27/10/2025 10:25

Overview

Carter's Q3 net sales were flat yr/yr at $758 mln

Adjusted EPS for Q3 beats analyst expectations

Company to cut 300 office-based positions, close 150 stores, cut $10 mln annual spending across categories

CEO and Board of Directors to reduce their 2026 compensation

Outlook

Carter's to close 150 stores over the next three years vs 100 stores planned earlier

Company expects $35 mln annual savings from restructuring starting 2026

Carter's suspends fiscal 2025 guidance due to tariff uncertainty

Result Drivers

U.S. RETAIL DEMAND - Improved demand in U.S. Retail business with positive comparable sales and better pricing

HIGHER COSTS - Elevated product costs and additional investments weighed on profitability

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Sales
$758 mln
Q3 Adjusted EPS
Beat
$0.74
$0.73 (5 Analysts)
Q3 EPS
$0.32
Q3 Adjusted Net Income
Beat
$26.8 mln
$24.2 mln (4 Analysts)
Q3 Net Income
$11.6 mln
Q3 Adjusted Operating Income
Beat
$39.4 mln
$38.5 mln (4 Analysts)
Q3 Adjusted Operating Margin
5.20%
Q3 Operating Income
$29.1 mln


Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 3 "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 $25.00, about 29.4% below its October 24 closing price of $32.35

The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 10 three months ago

Press Release: ID:nBw9cCjtza

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(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.)