AG真人官方

颁补谤迟别谤鈥檚, Inc. Reports Second Quarter Fiscal 2025 Results

• Net sales $585 million vs. $564 million in Q2 2024; growth of 4%
• Diluted EPS $0.01 vs. $0.76 in Q2 2024; adjusted diluted EPS $0.17 vs. $0.76 in Q2 2024
• Returned $38 million to shareholders through dividends in the first half of fiscal 2025
• New CEO Palladini shares insights and key learnings from first 100 days in role

ATLANTA--(BUSINESS WIRE)-- 颁补谤迟别谤鈥檚, Inc. (NYSE:CRI), North America鈥檚 largest and most-enduring apparel company exclusively for babies and young children, today reported its second quarter fiscal 2025 results.

鈥淥ur second quarter sales performance showed stabilization and momentum, particularly in our direct-to-consumer businesses, which achieved comparable sales growth in the U.S., Canada, and Mexico,鈥� said Douglas C. Palladini, Chief Executive Officer & President. 鈥淲e are encouraged by improving business trends, particularly in U.S. Retail, where store traffic, purchase conversion, and demand for our core Baby apparel products all demonstrated momentum in the second quarter.

鈥淚 am disappointed, however, in our decline in profitability in the quarter, affected in part by selective investments in pricing, new stores, and more normalized levels of performance-based compensation. We鈥檝e also begun to see some impact from higher tariffs imposed on product imported into the United States. Returning 颁补谤迟别谤鈥檚 to long-term, sustainable, and profitable growth is our highest imperative and we believe we are making informed and thoughtful investments to accomplish this objective.

鈥淚n my first 100 days with 颁补谤迟别谤鈥檚, I have come to more fully appreciate the strong emotional connection our brands have with consumers and the privilege 颁补谤迟别谤鈥檚 has as a part of families鈥� lives when raising young children. Our return to growth will be fueled by a commitment to serve a new generation of young families with brands and products that emphasize high quality, modern design, and exceptional value.

鈥淎cross nearly 40 years of building and nurturing brands, I鈥檝e consistently seen that thoughtful, measured investment drives profitable growth, and that鈥檚 exactly the path I believe we鈥檙e back on at 颁补谤迟别谤鈥檚. I鈥檝e also learned that the strongest brands are those with a clear sense of identity and purpose, knowing exactly what they stand for and what they don鈥檛. And most importantly, lasting consumer loyalty comes from balancing the transactional with the emotional, combining value with meaning. At 颁补谤迟别谤鈥檚, we are returning to all these fundamentals.

鈥淢y confidence in our future prospects emanates from the trust placed in 颁补谤迟别谤鈥檚 by generations of families: We are the largest and most significant company focused on young children and we must continue to honor that very special relationship at a very special time in peoples鈥� lives.鈥�

Adjustments to Reported GAAP Results

In addition to the results presented in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements, as presented below. The Company believes these non-GAAP financial measurements provide a meaningful comparison of the Company鈥檚 results and afford investors a view of what management considers to be the Company鈥檚 underlying performance. These measures are presented for informational purposes only. See 鈥淩econciliation of Adjusted Results to GAAP鈥� section of this release for additional disclosures and reconciliations regarding these non-GAAP financial measures.

Second quarter and first half of fiscal 2025 results included expenses related to operating model improvement initiatives and leadership transition costs. There were no adjustments in the second quarter and first half of fiscal 2024.

Consolidated Results

Second Quarter of Fiscal 2025 compared to Second Quarter of Fiscal 2024

Net sales increased $20.9 million, or 3.7%, to $585.3 million, compared to $564.4 million in the second quarter of fiscal 2024, driven by growth in International and U.S. Retail segment sales. International and U.S. Retail segment net sales increased 14.1% and 3.2%, respectively, while U.S. Wholesale segment net sales were comparable to the prior year. U.S. Retail comparable net sales increased 2.2%. Changes in foreign currency exchange rates in the second quarter of fiscal 2025, as compared to the second quarter of fiscal 2024, had an unfavorable effect on consolidated net sales of approximately $3.1 million, or 0.5%.

Operating income decreased $35.4 million, or 89.7% to $4.0 million, compared to $39.5 million in the second quarter of fiscal 2024. Operating margin decreased to 0.7%, compared to 7.0% in the prior year, reflecting investments in pricing and new and remodeled stores, costs related to operating model improvement initiatives and leadership transition, and increased performance-based compensation provisions.

Adjusted operating income (a non-GAAP measure) decreased $27.7 million, or 70.2% to $11.8 million, compared to $39.5 million in the second quarter of fiscal 2024. Adjusted operating margin decreased to 2.0%, compared to 7.0% in the prior year period, principally due to investments in pricing and new and remodeled stores and increased performance-based compensation provisions.

Net income was $0.4 million, or $0.01 per diluted share, compared to $27.6 million, or $0.76 per diluted share, in the second quarter of fiscal 2024.

Adjusted net income (a non-GAAP measure) was $6.3 million, compared to $27.6 million in the second quarter of fiscal 2024. Adjusted earnings per diluted share (a non-GAAP measure) was $0.17, compared to $0.76 in the prior-year quarter.

First Half of Fiscal 2025 compared to First Half of Fiscal 2024

Net sales decreased $10.8 million, or 0.9%, to $1.22 billion, compared to $1.23 billion in the first half of 2024, reflecting lower U.S. Wholesale and U.S. Retail segment sales and unfavorable foreign currency exchange rates, partially offset by higher International segment sales. U.S. Wholesale and U.S. Retail segment net sales declined 3.1% and 0.7%, respectively, while International segment net sales grew 4.1%. U.S. Retail comparable net sales declined 1.6%. Changes in foreign currency exchange rates in the first half of fiscal 2025, as compared to the first half of fiscal 2024, had an unfavorable effect on consolidated net sales of approximately $9.5 million, or 0.8%.

Operating income decreased $64.3 million, or 68.1% to $30.1 million, compared to $94.5 million in the first half of fiscal 2024. Operating margin decreased to 2.5%, compared to 7.7% in the prior year period, reflecting investments in pricing and new and remodeled stores, spending deleverage, costs related to operating model improvement initiatives and leadership transition, and increased performance-based compensation provisions.

Adjusted operating income (a non-GAAP measure) decreased $47.3 million, or 50.1% to $47.1 million, compared to $94.5 million in the first half of fiscal 2024. Adjusted operating margin decreased to 3.9%, compared to 7.7% in the prior year period, principally due to investments in pricing and new and remodeled stores, increased performance-based compensation provisions, and higher distribution costs.

Net income was $16.0 million, or $0.43 per diluted share, compared to $65.7 million, or $1.80 per diluted share, in the first half of fiscal 2024.

Adjusted net income (a non-GAAP measure) was $30.1 million, compared to $65.7 million in the first half of fiscal 2024. Adjusted earnings per diluted share (a non-GAAP measure) was $0.83, compared to adjusted earnings per diluted share of $1.80 in the first half of fiscal 2024.

Net cash used in operations in the first half of fiscal 2025 was $8.3 million, compared to net cash provided by operations of $91.7 million in the first half of fiscal 2024. The change in net cash from operating activities was primarily driven by lower earnings and higher inventory levels.

See 鈥淩econciliation of Adjusted Results to GAAP鈥� sections of this release for additional disclosures regarding non-GAAP measures.

Return of Capital

In the second quarter of fiscal 2025, the Company paid a cash dividend of $0.25 per common share totaling $9.1 million. In the first half of fiscal 2025, the Company paid cash dividends totaling $38.1 million. No shares were repurchased in the first half of fiscal 2025.

The Company鈥檚 Board of Directors will evaluate future distributions of capital, including dividends and share repurchases, based on a number of factors, including business conditions, the Company鈥檚 future financial performance, investment priorities, and other considerations.

2025 Business Outlook and Tariffs

The Company continues to closely monitor the Administration鈥檚 proposed plans to implement significant new tariffs on products imported into the United States from a wide range of countries. If implemented, these additional tariffs would add substantially to the approximately $110 million in duties on imported product paid by the Company in fiscal 2024.

The Company has estimated that the gross pre-tax earnings impact of additional import duties under an additional baseline tariff of 30% for China, 20% for Vietnam, 19% for Indonesia, and 10% for all other countries is expected to be approximately $125 million to $150 million on an annualized basis. Over time, the Company intends to offset these additional costs through a combination of changes to its product assortments, cost sharing with its vendor partners, changes to the mix of its production by country, and raising prices to end consumers and its wholesale customers. In the second half of fiscal year 2025, the Company anticipates a net additional baseline tariff impact to pre-tax earnings of approximately $35 million.

The gross amount of additional costs from incremental tariffs and the Company鈥檚 actions to offset them will depend heavily on the final tariff schemes established by the U.S. government, if any.

As announced previously, given the Company鈥檚 leadership transition in April 2025 and the ongoing and significant uncertainty surrounding proposed new tariffs and potential related impact on its business, the Company has suspended its fiscal 2025 guidance.

Conference Call

The Company will hold a conference call with investors to discuss second quarter fiscal 2025 results and provide an update on its business on July 25, 2025 at 8:30 a.m. Eastern Daylight Time. To listen to a live webcast and view the accompanying presentation materials, please visit ir.carters.com and select links for 鈥淣ews & Events鈥� followed by 鈥淓vents.鈥� To access the call by phone, please preregister on to receive your dial-in number and unique passcode.

A webcast replay will be available shortly after the conclusion of the call at .

About 颁补谤迟别谤鈥檚, Inc.

颁补谤迟别谤鈥檚, Inc. is North America鈥檚 largest and most-enduring apparel company exclusively for babies and young children. The Company鈥檚 core brands are 颁补谤迟别谤鈥檚 and OshKosh B鈥檊osh, iconic and among the sector鈥檚 most trusted names. These brands are sold through more than 1,000 Company-owned stores in the United States, Canada, and Mexico online at , , , and . 颁补谤迟别谤鈥檚 also is the largest supplier of baby and young children鈥檚 apparel to North America鈥檚 biggest retailers. The Company鈥檚 Child of Mine brand is available exclusively at Walmart, its Just One You brand is available at Target, and its Simple Joys brand is available on Amazon.com. The Company鈥檚 emerging brands include Little Planet, crafted with organic fabrics and sustainable materials, Otter Avenue, a toddler-focused apparel brand, and Skip Hop, baby essentials from tubs to toys. 颁补谤迟别谤鈥檚 is headquartered in Atlanta, Georgia. Additional information may be found at .

Forward Looking Statements

Statements in this press release that are not historical fact and use predictive words such as 鈥渆stimates鈥�, 鈥渙utlook鈥�, 鈥済uidance鈥�, 鈥渆xpect鈥�, 鈥渂elieve鈥�, 鈥渋ntend鈥�, 鈥渄esigned鈥�, 鈥渢arget鈥�, 鈥減lans鈥�, 鈥渕ay鈥�, 鈥渨ill鈥�, 鈥渁re confident鈥� and similar words are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements or views expressed in this press release. These risks and uncertainties include, but are not limited to, those disclosed in Part II, Item 1A. 鈥淩isk Factors鈥� of the Company鈥檚 Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2025 and Part I, Item 1A. 鈥淩isk Factors鈥� of the Company鈥檚 Annual Report on Form 10-K for the fiscal year ended December 28, 2024, and otherwise in our reports and filings with the Securities and Exchange Commission, as well as the following factors: changes in global economic and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits; risks related to public health crises; risks related to consumer tastes and preferences, as well as fashion trends; the failure to protect our intellectual property; the diminished value of our brands, potentially as a result of negative publicity or unsuccessful branding and marketing efforts; delays, product recalls, or loss of revenue due to a failure to meet our quality standards; risks related to uncertainty regarding the future of international trade agreements and the United States鈥� position on international trade, as well as significant political, trade, and regulatory developments and other circumstances beyond our control; increased competition in the marketplace; financial difficulties for one or more of our major customers; identification of locations and negotiation of appropriate lease terms for our retail stores; distinct risks facing our eCommerce business; failure to forecast demand for our products and our failure to manage our inventory; increased margin pressures, including increased cost of materials and labor and our inability to successfully increase prices to offset these increased costs; continued inflationary pressures with respect to labor and raw materials and global supply chain constraints that have, and could continue, to affect freight, transit, and other costs; fluctuations in foreign currency exchange rates; unseasonable or extreme weather conditions; risks associated with corporate responsibility issues; our foreign sourcing arrangements; a relatively small number of vendors supply a significant amount of our products; disruptions in our supply chain, including increased transportation and freight costs; our ability to effectively source and manage inventory; problems with our Braselton, Georgia distribution facility; pending and threatened lawsuits; a breach of our information technology systems and the loss of personal data or a failure to implement new information technology systems successfully; unsuccessful expansion into international markets; failure to comply with various laws and regulations; failure to properly manage strategic initiatives; retention of key individuals; acquisition and integration of other brands and businesses; failure to achieve sales growth plans and profitability objectives to support the carrying value of our intangible assets; our continued ability to meet obligations related to our debt; changes in our tax obligations, including additional customs, duties or tariffs; our continued ability to declare and pay a dividend; volatility in the market price of our common stock; and the cost or effort required for our shareholders to bring certain claims or actions against us, as a result of our designation of the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings. Except for any ongoing obligations to disclose material information as required by federal securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The inclusion of any statement in this press release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

听

View source version on businesswire.com:

Sean McHugh

Vice President & Treasurer

(678) 791-7615

Source: 颁补谤迟别谤鈥檚, Inc.