Carter shares dip on weaker-than-expected guidance, revenue miss By Investing.com

ATLANTA – Carter’s, Inc. (NYSE:), the leading brand of children’s apparel in North America, announced its financial results for the second quarter of fiscal 2024.

The company reported a diluted earnings per share (EPS) of $0.76, surpassing analyst expectations of $0.50. However, the quarter’s revenue of $564 million fell short of the consensus estimate of $568.81 million.

Chairman and CEO Michael D. Casey commented on the results, stating, “We achieved our second quarter sales and earnings objectives.” He acknowledged the quarter’s slow start due to the earlier Easter holiday and delayed warmer weather but noted improved sales trends in the following months. Casey also highlighted the company’s record gross profit margin, attributing it to strong product offerings and reduced inbound freight and product costs.

Despite the EPS beat, Carter’s provided full-year fiscal 2024 guidance that was below analyst expectations. The company forecasts an adjusted EPS range of $4.60 to $5.05, compared to the consensus of $6.23, and anticipates revenues between $2.78 billion and $2.82 billion, while analysts had estimated $2.92 billion.

For the third quarter of fiscal 2024, Carter’s expects an EPS between $1.10 and $1.35, which is below the consensus estimate of $1.88. The company also projects third-quarter revenues to be in the range of $735 million to $755 million, compared to the expected $805.9 billion by analysts.

Following the earnings release and guidance, Carter’s shares experienced a slight decline of 1.17%.

The company’s performance reflects the ongoing challenges in the retail sector, with Casey acknowledging the impact of macroeconomic factors such as inflation, elevated interest rates, and declining consumer confidence on demand. He also noted that Carter’s is navigating through a historic inflationary period and is using this down cycle to strengthen its market position.

In the second quarter, Carter’s returned $54 million to shareholders through dividends and share repurchases, with a total of $92 million returned in the first half of fiscal 2024. The company ended the quarter with a higher cash balance and over $1 billion in liquidity, with no seasonal borrowings and lower net interest costs.

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