CARTERS INC SEC 10-Q Report
Carters Inc., a leading provider of children's apparel, has released its Form 10-Q report for the second quarter of fiscal 2024. The report provides a comprehensive overview of the company's financial and operational performance, highlighting key metrics and strategic initiatives that have shaped the quarter.
Financial Highlights
Consolidated Net Sales: $585.3 million, increased by $20.9 million or 3.7% compared to the second quarter of fiscal 2024, driven by higher unit volumes in U.S. Retail and increased traffic and demand in Mexico and Canada.
Gross Profit: $281.8 million, decreased by $1.2 million or 0.4%, with a gross margin decrease of 200 bps to 48.1%, due to lower average product selling prices per unit and higher sales to off-price wholesale channel customers.
Operating Income: $4.0 million, decreased by $35.4 million or 89.7%, with an operating margin decrease of 630 bps to 0.7%, primarily due to increased SG&A expenses related to operating model improvements and leadership transition.
Net Income: $0.4 million, decreased by $27.2 million or 98.4%, impacted by lower operating income and higher effective tax rate.
Diluted Net Income Per Common Share: $0.01, decreased by $0.75 or 98.7%, reflecting the significant decrease in net income.
Business Highlights
Revenue Segments: U.S. Retail segment net sales increased by 3.2% to $299.5 million, driven by improved conversion rates and higher units per transaction. U.S. Wholesale segment net sales remained stable at $193.0 million, with increased sales to off-price wholesale channel customers. International segment net sales rose by 14.1% to $92.8 million, supported by stronger traffic in Canada and Mexico.
Geographical Performance: Canadian comparable net sales increased by 7.6%, driven by improved traffic and higher conversion rates in stores. The U.S. Retail segment saw a 2.2% increase in comparable net sales, reflecting improved conversion rates and higher units per transaction.
Sales Units: Units sold in the U.S. Retail segment increased by a high-single digit percentage, reflecting the positive impact of selective investments in pricing. In the U.S. Wholesale segment, units sold increased by a mid-single digit percentage.
New Product Launches: The company reported increased demand for its Skip Hop and Little Planet brands, contributing to the stability in the U.S. Wholesale segment.
Future Outlook: The company plans to focus on enhancing the in-store shopping experience through a new fleet segmentation strategy beginning in fiscal 2026, aiming to provide a better customer experience and drive brand loyalty. Additionally, the company plans to invest $65.0 million in capital expenditures in fiscal 2025, primarily for U.S. and international retail store openings and remodels, and strategic information technology initiatives.
SEC Filing: CARTERS INC [ CRI ] - 10-Q - Jul. 25, 2025