Carter's, Inc.

Carter's, Inc. (CRI - Snapshot Report) is bucking the retail doom and gloom as it intends to open 21 new children's clothing stores in the fourth quarter. The company has surprised on estimates 3 out of the last 4 quarters by an average of 311.92%. Carter's has a forward P/E of 12.09.

Company Description

Carter's sells affordable apparel for babies and young children through 200 Carter's and OshKosh retail stores and big box retailers throughout the United States.

The company, founded in 1865, specializes in products from newborn through size 7 including baby, sleepwear, play clothes and accessories in the Carter's and Oshkosh brands.

Sales Rise 6.2% in the Third Quarter

On Oct 21, Carter's Inc. reported third-quarter 2008 earnings that beat Wall Street estimates by 25%. Earnings per share were 60 cents compared to 58 cents per share in the third-quarter of 2007. Analysts expected 48 cents.

Sales rose 6.2% to $436.4 million. The Carter's brand climbed 6.6% to $341 million and the OshKosh brand grew 4.8% to $95.4 million.

Retail store sales were also strong. Same store sales at Carter's stores jumped 6.1% whereas OshKosh sales gained 13.2% for the quarter.

The company's sales to other retailers, such as the Just One Year brand at Target and the Child of Mine brand at Wal-Mart, were equally as robust, rising 13.4% to $76.7 million.

The dismal outlook for the retail sector isn't slowing down Carter's. The company has plans to open 19 Carter's and 3 OshKosh stores in the fourth quarter while intending to shutter only one Carter's store during that period.

2008 Full-Year Consensus Estimates Rise

Given Carter's bullish outlook heading into the fourth quarter, covering analysts have been raising full year estimates. In the last 30 days, 2008 consensus estimates jumped 6 cents to $1.36 per share.

Value Fundamentals

Carter's is a Zacks #1 Rank (strong buy) stock. It's trading at 12.1x forward earnings. The company's price-to-book is 2.33. CRI has an outstanding 5-year return on equity (ROE) of 18.97%.