Carter's (CRI) AI Stock Analysis

• Market Cap: $1.00B
• Dividend Yield: 7.06%
• Average Volume (3M): 1.23M
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.76
• Revenue Growth: -1.46%
• EPS Growth: -41.93%
• Country: US
• Employees: 15,350
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 0.17
• Shares Outstanding: 36,432,175
• 10 Day Avg. Volume: 1,011,588
• 30 Day Avg. Volume: 1,228,379
• PEG Ratio: -0.58
• Price to Book (P/B): 2.26
• Price to Sales (P/S): 0.68
• P/FCF Ratio: 7.97
• Enterprise Value/Market Cap: 1.85
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 1.38
• Enterprise Value/Ebitda: 7.22
• 1Y Price Target: $26.00
• Price Target Upside: -12.58% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6

• Rating: 70 Neutral
• Price Target: $33.00 ▲(10.96% Upside)

Carter's overall stock score is driven by a solid valuation with a low P/E ratio and high dividend yield, making it attractive for value and income investors. However, financial performance and earnings call insights highlight challenges in revenue growth, profitability, and external pressures such as tariffs, which weigh on the score. Technical analysis suggests a neutral to slightly positive trend, providing some support to the stock's outlook.

Positive Factors

International Segment Success

Strong international sales growth, particularly in Canada and Mexico, indicates successful market expansion and diversification, which can provide a buffer against domestic market fluctuations.

New Brand Launches

The successful launch and growth of new brands like Little Planet demonstrate Carter's ability to innovate and expand its product offerings, potentially driving long-term revenue growth.

Baby Category Performance

Sustained growth in the baby category highlights Carter's strong market position and brand loyalty in a key segment, supporting stable revenue streams.

Negative Factors

Tariff Impact

Significant tariff impacts could increase costs and pressure margins, challenging Carter's profitability and requiring strategic adjustments to maintain competitiveness.

Decreased Profitability

A decline in operating income suggests challenges in maintaining profitability, which could impact Carter's ability to reinvest in growth and innovation.

SG&A Expenses Increase

Rising SG&A expenses, driven by higher store-related costs, may reduce operational efficiency and profitability, necessitating cost control measures.

Carter's Business Overview & Revenue Model

Company Description

Carter's, Inc. (CRI) is a leading American retailer of children's apparel and accessories, primarily targeting infants and toddlers. The company operates through its well-known brands, including Carter's and OshKosh B'gosh, offering a wide range of products such as clothing, sleepwear, and accessories. With a diverse presence in the retail sector, Carter's serves customers through various channels, including its extensive network of retail stores, e-commerce platforms, and partnerships with other retailers.

How the Company Makes Money

Carter's generates revenue primarily through the sale of its children's clothing and accessories across multiple channels. The company's key revenue streams include direct sales from its branded retail stores and online platforms, which have increasingly contributed to its income as e-commerce continues to grow. Additionally, Carter's benefits from wholesale partnerships by selling its products to other retailers, expanding its reach to a larger customer base. Seasonal collections and promotional campaigns also play a significant role in driving sales. The company's strong brand recognition and customer loyalty, coupled with strategic marketing efforts, further enhance its earnings potential.

Carter's Financial Statement Overview

Summary

Carter's financial performance shows mixed results with challenges in revenue growth and profitability. The company faces high leverage risks, but operational efficiency is evident. The decline in cash flow growth and high debt levels are concerning, requiring focus on revenue improvement and debt management.

Income Statement

Carter's shows a mixed performance in its income statement. The TTM data indicates a slight decline in revenue and profit margins compared to previous years. The gross profit margin remains stable, but the net profit margin has decreased, reflecting challenges in maintaining profitability. Revenue growth has been negative, indicating potential market challenges or competitive pressures. However, the company maintains a reasonable EBIT and EBITDA margin, suggesting operational efficiency.

Balance Sheet

The balance sheet reveals a moderate financial position with a high debt-to-equity ratio, indicating significant leverage. However, the return on equity remains healthy, suggesting effective use of equity to generate profits. The equity ratio is stable, reflecting a balanced asset structure. The company should focus on managing its debt levels to reduce financial risk.

Cash Flow

Carter's cash flow statement shows a decline in free cash flow growth, which is a concern for future liquidity. The operating cash flow to net income ratio is below 1, indicating potential challenges in converting income into cash. However, the free cash flow to net income ratio remains strong, suggesting that the company is still generating sufficient cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2019	Dec 2018
Income Statement
Total Revenue	2.83B	2.84B	2.95B	3.21B	3.52B	3.46B
Gross Profit	1.34B	1.37B	1.40B	1.47B	1.51B	1.50B
EBITDA	256.28M	320.07M	400.35M	455.01M	498.29M	480.20M
Net Income	135.59M	185.51M	232.50M	250.04M	263.80M	282.07M
Balance Sheet
Total Assets	2.46B	2.43B	2.38B	2.44B	2.75B	2.06B
Cash, Cash Equivalents and Short-Term Investments	338.18M	412.93M	351.21M	211.75M	214.31M	170.08M
Total Debt	1.12B	1.13B	1.08B	1.18B	1.42B	593.26M
Total Liabilities	1.60B	1.58B	1.53B	1.64B	1.87B	1.19B
Stockholders Equity	853.90M	854.56M	845.25M	796.41M	880.13M	869.43M
Cash Flow
Free Cash Flow	140.36M	242.62M	469.27M	48.00M	325.80M	292.42M
Operating Cash Flow	198.76M	298.79M	529.13M	88.36M	387.21M	356.20M
Investing Cash Flow	-58.40M	-56.16M	-59.86M	-40.36M	-60.67M	-63.31M
Financing Cash Flow	-118.28M	-174.82M	-332.64M	-819.27M	-283.38M	-298.95M

Carter's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRI, the sentiment is Positive. The current price of 29.74 is above the 20-day moving average (MA) of 29.65, above the 50-day MA of 28.05, and below the 200-day MA of 36.08, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 52.67 is Neutral, neither overbought nor oversold. The STOCH value of 46.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CRI.

Carter's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRI	70 Neutral	$1.00B	7.30	15.95%	7.06%	-1.46%	-41.93%
VSCO	69 Neutral	$2.26B	15.81	26.29%	―	2.30%	8.85%
GES	66 Neutral	$871.56M	166.70	6.23%	6.68%	7.84%	-81.20%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SFIX	55 Neutral	$541.14M	―	-14.79%	―	-5.26%	79.25%
GCO	50 Neutral	$282.30M	―	-4.81%	―	2.66%	-4772.54%
PLCE	46 Neutral	$157.61M	―	-521.67%	―	-12.08%	93.16%

Carter's Corporate Events

Carter’s Announces Departure of Chief Product Officer

Carter’s, Inc. announced the departure of Chief Product Officer Kendra D. Krugman as part of an organizational restructuring to enhance decision-making and competitiveness, effective October 21, 2025. Additionally, the company decided to terminate its Deferred Compensation Plan due to low participation and administrative complexity, transitioning to a Safe Harbor 401(k) Plan, with the plan termination effective September 30, 2025.

Carter’s Announces Quarterly Dividend of $0.25 Per Share

On August 14, 2025, Carter’s, Inc. announced a quarterly dividend of $0.25 per share, payable on September 12, 2025, to shareholders of record as of August 26, 2025. This decision reflects the company’s commitment to returning value to its shareholders and is subject to future business conditions and financial performance, as determined by the Board of Directors.

Carter’s Board Member Hali Borenstein to Step Down

On July 8, 2025, Hali Borenstein, a member of Carter’s, Inc. Board of Directors, announced she will not seek re-election at the 2026 annual shareholders’ meeting. Her decision is not due to any disagreements with the company but to focus on her role as CEO of Reformation LLC and her family. Ms. Borenstein will continue her duties on the Board until the meeting in 2026, and the company expressed gratitude for her service.