Apparel retailer Carter's Q2 sales rise, sees tariff impact in H2 FY 25
Overview
Carter's Q2 fiscal 2025 net sales rose 4% to $585 mln
Adjusted EPS of $0.17 missed analyst expectations, per LSEG data
Co returned $38 mln to shareholders via dividends in H1 fiscal 2025
Outlook
Company suspends fiscal 2025 guidance due to leadership changes and tariff uncertainties
Carter's anticipates $35 mln net additional tariff impact in H2 fiscal 2025
Company plans to offset tariff costs through assortment changes and price increases
Result Drivers
SALES GROWTH - Driven by stabilization and momentum in direct-to-consumer businesses, particularly in U.S., Canada, and Mexico
PROFITABILITY DECLINE - Impacted by investments in pricing, new stores, performance-based compensation, and higher tariffs
U.S. RETAIL MOMENTUM - Store traffic, purchase conversion, and demand for core Baby apparel products showed improvement, per CEO Palladini
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales |
| $585 mln |
|
Q2 Adjusted EPS | Miss | $0.17 | $0.39 (6 Analysts) |
Q2 EPS |
| $0.01 |
|
Q2 Adjusted Net Income | Miss | $6.30 mln | $13.10 mln (5 Analysts) |
Q2 Net Income |
| $400,000 |
|
Q2 Adjusted Operating Income | Miss | $11.80 mln | $23.70 mln (5 Analysts) |
Q2 Adjusted Operating Margin |
| 2.0% |
|
Q2 Operating Income |
| $4 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 4 "hold" and 3 "sell" or "strong sell"
The average consensus recommendation for the apparel & accessories retailers peer group is "buy."
Wall Street's median 12-month price target for Carter's Inc is $30.00, about 9.2% below its July 24 closing price of $32.75
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago
Press Release: ID:nBw41g98ma
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