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Carter's
(NYSE:CRI)
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Rating:67Neutral
Price Target:
$33.00
▼(-2.68% Downside)
Action:Downgraded
Date:09/22/26
CRI scores as a value-oriented setup backed by improved profitability/cash generation and a healthier balance sheet, further supported by a low P/E and solid dividend yield. Offsetting these positives, technicals show a clear downtrend with weak momentum, and revenue growth remains modest, keeping the overall score in the mid-range.
Positive Factors
Established brands and broad distribution
Carter’s owns established children’s apparel brands and reaches customers through retail, digital, and wholesale channels. This diversified distribution model can support durable brand visibility, broaden customer access, and provide multiple avenues for sustaining demand over the next several quarters.
Negative Factors
Modest revenue growth and lower long-term sales
Limited top-line expansion and revenue below the prior peak suggest Carter’s operates in a mature or soft demand environment. Without stronger sales growth, future margin gains may become harder to generate and the company may have fewer opportunities to leverage its brand investments.
Read all positive and negative factors
Positive Factors
Negative Factors
Established brands and broad distribution
Carter’s owns established children’s apparel brands and reaches customers through retail, digital, and wholesale channels. This diversified distribution model can support durable brand visibility, broaden customer access, and provide multiple avenues for sustaining demand over the next several quarters.
Read all positive factors
Carter's Key Performance Indicators (KPIs)
Any
Net Sales By Segment
Shows revenue performance across various segments, indicating which product lines or services are most successful and where there might be potential for growth or need for strategic adjustments.
Shows revenue performance across various segments, indicating which product lines or services are most successful and where there might be potential for growth or need for strategic adjustments.
Data provided by:
The Fly
The FlyCarter's (CRI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.19B
Dividend Yield3.09%
Average Volume (3M)1.49M
Price to Earnings (P/E)5.9
Beta (1Y)0.96
Revenue Growth5.17%
EPS Growth41.92%
CountryUS
Employees15,400
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)5.49
Shares Outstanding36,711,185
10 Day Avg. Volume1,313,419
30 Day Avg. Volume1,489,917
Financial Highlights & Ratios
PEG Ratio-0.26
Price to Book (P/B)1.27
Price to Sales (P/S)0.41
P/FCF Ratio17.15
Enterprise Value/Market Cap1.67
Enterprise Value/Revenue0.66
Enterprise Value/Gross Profit1.37
Enterprise Value/Ebitda5.93
Forecast
1Y Price Target
$41.00Price Target Upside20.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)3.27
Revenue Forecast (FY)$2.98B
Carter's Business Overview & Revenue Model
Company Description
Carter's, Inc., together with its subsidiaries, designs, sources, and markets branded childrenswear in the United States and internationally. It operates through three segments: U.S. Retail, U.S. Wholesale, and International. The company’s product...
How the Company Makes Money
Carter’s makes money primarily by selling children’s apparel and related products through two main channels: (1) retail and (2) wholesale. In retail, the company generates revenue from direct-to-consumer sales through its company-operated brick-an...
Carter's Earnings Call Summary
Earnings Call Date:Jul 31, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 23, 2026
Earnings Call Sentiment Positive
Overall the call was constructive: the company reported strong top-line growth (23% YoY), materially improved adjusted EBITDA (+48% YoY) and margin expansion, substantial progress on platform adoption (AsureCentral majority migration) and AI/automation (Luna adoption), and provided tightened/upgraded guidance for 2026. Headline positives outweigh the negatives, though there are near-term headwinds and execution items to monitor—namely ongoing GAAP losses, cash/debt levels, expected reduction in non-recurring revenue versus prior-year comparables, a near-term revenue impact from Lathem's HaaS transition, and that some AI-driven cost benefits and salesforce productivity gains remain early in their ramp. On balance, momentum and profitability trajectory dominate the narrative.Positive Updates
Strong Revenue Growth
Total revenue of $37.1M in Q2 2026, up 23% year-over-year from $30.1M (Q2 2025).
Negative Updates
Ongoing GAAP Net Loss and Leverage
GAAP net loss remained at $4.4M in Q2 2026 (improved but still negative). Cash of $19.7M vs. total debt of $68.9M as of June 30, 2026 indicates leverage and modest liquidity cushion.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth
Total revenue of $37.1M in Q2 2026, up 23% year-over-year from $30.1M (Q2 2025).
Read all positive updates
Company Guidance
Management tightened 2026 guidance to full‑year revenue of $159–$163 million with adjusted EBITDA margins of 24%–25%, and Q3 revenue of $38–$40 million with adjusted EBITDA of $8–$10 million; they expect positive levered free cash flow in the mid‑to‑high‑teens after roughly $15 million of capitalized software and ~$6 million of cash interest. Key operating metrics: Q2 revenue was $37.1 million (+23% YoY) with recurring revenue $34.0 million (91% of total, +19% YoY), Q2 adjusted EBITDA $7.7 million (21% margin, +48% YoY), cash $19.7 million and total debt $68.9 million at June 30, and an ~ $80 million contracted backlog with ~41% expected to convert in the next 12 months. Management said Q2 organic growth was 5% (down from 7% in Q1) but expects double‑digit organic/recurring growth in H2 2026, no further growth‑rate cuts this year, a ~$600k revenue headwind in H1 2027 from Lathem’s HaaS transition, a 150 sales‑rep headcount goal by year‑end, and a medium‑term target of $180–$200 million in revenue with ≥30% adjusted EBITDA margins.Carter's Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
78
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.98B | 2.90B | 2.84B | 2.95B | 3.21B | 3.49B |
| Gross Profit | 1.45B | 1.31B | 1.37B | 1.40B | 1.47B | 1.66B |
| EBITDA | 333.73M | 203.32M | 343.49M | 400.35M | 424.79M | 592.69M |
| Net Income | 195.10M | 91.80M | 185.51M | 232.50M | 250.04M | 339.75M |
Balance Sheet | ||||||
| Total Assets | 2.73B | 2.57B | 2.43B | 2.38B | 2.44B | 3.19B |
| Cash, Cash Equivalents and Short-Term Investments | 653.57M | 487.07M | 412.93M | 351.21M | 211.75M | 984.29M |
| Total Debt | 1.18B | 1.21B | 1.13B | 1.08B | 1.18B | 1.57B |
| Total Liabilities | 1.71B | 1.64B | 1.58B | 1.53B | 1.64B | 2.24B |
| Stockholders Equity | 1.03B | 925.05M | 854.56M | 845.25M | 796.41M | 950.19M |
Cash Flow | ||||||
| Free Cash Flow | 293.01M | 68.63M | 242.62M | 469.27M | 48.00M | 230.82M |
| Operating Cash Flow | 332.97M | 122.33M | 298.79M | 529.13M | 88.36M | 268.26M |
| Investing Cash Flow | -39.95M | -53.70M | -56.16M | -59.86M | -40.36M | -32.44M |
| Financing Cash Flow | 23.44M | 2.04M | -174.82M | -332.64M | -819.27M | -352.71M |
Carter's Technical Analysis
Negative
33.91
Price Trends
33.73
Negative
36.54
Negative
35.92
Negative
Market Momentum
-0.13
Negative
49.07
Neutral
48.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRI, the sentiment is Negative. The current price of 33.91 is above the 20-day moving average (MA) of 31.14, above the 50-day MA of 33.73, and below the 200-day MA of 35.92, indicating a neutral trend. The MACD of -0.13 indicates Negative momentum. The RSI at 49.07 is Neutral, neither overbought nor oversold. The STOCH value of 48.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRI.
Carter's Risk Analysis
Carter's disclosed 42 risk factors in its most recent earnings report. Carter's reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Carter's Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $8.16B | 6.79 | 33.13% | 2.97% | 1.05% | 44.82% | |
67 Neutral | $1.19B | 5.89 | 20.84% | 3.09% | 5.17% | 41.92% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $17.40B | 24.86 | 39.82% | ― | 10.89% | 31.47% | |
56 Neutral | $310.21M | 0.92 | 95.71% | ― | 0.40% | 5804.60% | |
53 Neutral | $429.90M | 57.92 | 6.19% | 1.67% | 11.15% | ― | |
40 Underperform | $31.58M | -0.24 | 172.19% | 4.14% | -15.92% | -590.26% |
* Consumer Cyclical Sector Average
CRI
Carter's
32.03
3.17
10.98%
CTRN
Citi Trends
48.85
12.88
35.83%
GAP
Gap Inc
22.78
2.78
13.88%
PLCE
Children's Place
1.31
-6.43
-83.07%
BURL
Burlington Stores
268.16
-8.07
-2.92%
LE
Lands' End
10.49
-4.46
-29.83%
Carter's Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Carter’s Stockholder Rights Plan Naturally Expires, Governance Shifts
Positive
Sep 21, 2026
On September 21, 2026, Carter’s, Inc. reported that its limited duration stockholder rights agreement, originally adopted on September 22, 2025, expired according to its predefined terms. With this expiration, the rights plan and its associa...
Business Operations and StrategyDividends
Carter’s Declares Quarterly Cash Dividend to Shareholders
Positive
Aug 20, 2026
On August 20, 2026, Carter’s, Inc. announced that its board of directors declared a quarterly cash dividend of $0.25 per share, reinforcing its commitment to returning capital to shareholders. The dividend is scheduled to be paid on Septembe...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.