Carter's (HCH) AI Stock Analysis

Carter's

(Frankfurt:HCH)

Rating:―N/A

Action:N/A

Date:―

No summary available

Positive Factors

Cash GenerationStrong operating and free cash flow gives Carter’s internal funding capacity and supports dividends or reinvestment without relying solely on external capital. Because free cash flow is close to net income, reported profitability is materially backed by cash, improving resilience over the next several quarters.

Negative Factors

Revenue ContractionRevenue weakness is the principal fundamental constraint: TTM sales fell about 18% and the pack describes a multi-year contraction after the 2021 peak. Persistent top-line pressure can dilute operating leverage, reduce scale benefits and make margin gains harder to sustain.

Carter's (HCH) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 1.16B
Dividend Yield: 3.08%
Average Volume (3M): 35
Price to Earnings (P/E): 5.1
Beta (1Y): 0.98
Revenue Growth: -0.34%
EPS Growth: 126.63%
Country: Germany
Employees: 15,400
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Apparel - Retail

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 products i...

Carter's Earnings Call Summary

Earnings Call Date:Oct 29, 2026(Q3-2026)|% Change Since:-0.71%|Next Earnings Date:Feb 18, 2027

Earnings Call SentimentPositive

The call was broadly positive. Third-quarter profitability, margins, brand engagement, international performance, cash flow, and several strategic initiatives showed meaningful improvement, and the company maintained its full-year operating income outlook. However, management acknowledged softer consumer demand, lower fourth-quarter revenue and EPS expectations, declining full-year adjusted EPS, promotional pressure, input-cost inflation, and tariff and supply-chain uncertainty.

Positive Updates

Third-Quarter Results Exceeded Outlook

Third-quarter results exceeded the company's outlook. Net sales were $752 million, essentially flat versus the prior year, while adjusted operating income increased 45% to $57 million and adjusted operating margin expanded 240 basis points to 7.6%.

Negative Updates

Macroeconomic and Consumer Spending Uncertainty

Management cited continued macroeconomic uncertainty, shifts in consumer confidence and spending, persistent inflation, higher gas prices, and consumer pressure to delay purchases closer to need.

Company Guidance

Fourth-quarter net sales are forecast in the range of $860 million-$880 million, or mid-single digit lower sales than last year's fourth quarter, using the midpoint of the range; adjusted operating income is forecast in a range of $74 million-$83 million versus $89 million a year ago, and adjusted fourth quarter EPS in a range of $1.37-$1.55 versus $1.90 in Q4 last year. Full-year net sales are expected in the range of $2.91 billion-$2.93 billion, representing growth of approximately 1% versus prior year at the midpoint, or 2% growth excluding last year's 53rd week; adjusted operating income growth is maintained in the low single digit to mid-single digit range, adjusted EPS is expected to decline in the high single digits to low double digits, operating cash flow is expected in the range of $240 million-$250 million, and the effective tax rate is forecast at approximately 23%. Fourth-quarter U.S. retail pricing is planned up low single digit, gross margin is expected to show expansion again year-over-year, and lowered gross tariff burden is expected to provide $10 million or $11 million of benefit in the fourth quarter.

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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:HCH against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BURL	71Outperform	$14.89B	21.28	39.82%	―	10.89%	31.47%
GAP	69Neutral	$7.84B	6.53	33.13%	3.09%	1.05%	44.82%
CTRN	62Neutral	$401.63M	54.11	6.19%	―	11.15%	―
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LE	58Neutral	$280.96M	0.83	95.71%	―	0.40%	5804.60%
PLCE	31Underperform	$9.34M	-0.07	172.19%	―	-15.92%	-590.26%

* Consumer Cyclical Sector Average

Performance Comparison

DE:HCH and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:HCH	Carter's Inc	27.80	2.59	10.25%
CTRN	Citi Trends	51.97	15.98	44.38%
GAP	Gap, Inc.	22.22	0.47	2.16%
PLCE	Children's Place Retail Stores	0.42	-6.41	-93.79%
BURL	Burlington Stores Inc	238.78	-34.10	-12.50%
LE	Lands' End, Inc	9.66	-5.17	-34.83%

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.

Carter's AI Stock Analysis