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Carter's Sales Gain on Solid Online Show Amid Coronavirus
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Carter’s Inc. (CRI - Free Report) has been gaining from its advanced e-commerce capabilities along with increased demand for products online. The company’s e-commerce operations performed well in the second quarter of 2020 with comps growth of 101%. Notably, majority of online orders were fulfilled with its ship-from-store facility. In fact, store fulfillment of its online purchases grew to 30% from 20% of e-commerce sales. It expects more than 70% of its stores to be able to fulfill online orders by August.
Notably, Carter’s same-day pickup service for online orders, easy access to a broad array of online products when shopping in stores and easy access to its new credit card program bode well for the future. The company is now focusing on its ship-from-store facility, which is likely to be rolled out to 600 of its stores by this fall. Apart from these, management has introduced curbside pickup for customers’ convenience.
Further, it witnessed sturdy e-commerce demand in the wholesale channel to the tune of more than 100%, with its top wholesale customers recording triple-digit growth in online demand. Alongside this, solid demand in wholesale stores that remained open during the second quarter aided quarterly results. That said, online sales are expected to exceed $1 billion in 2020 with increasing demand for products online, particularly baby, sleepwear and playwear products.
Moreover, Carter’s has started reopening stores across the United States due to the lifting of government restrictions. In the United States, roughly 97% of stores were reopened by the end of the second quarter. Following store reopenings, it is witnessing improved trends with healthy demand during the Jul 4 shopping season. Notably, the company recorded sturdy demand with comps growth of 8% in the United States, driven by higher conversion and transaction which more than offset the drab traffic.
However, the company’s sales for second-quarter 2020 were largely affected by store closures, particularly in April and May, due to the coronavirus outbreak. Also, reduced sales volume and sluggish royalty income weighed on operating margin in the aforementioned quarter. Moreover, management has refrained from providing any full-year guidance, citing the unprecedented impacts of COVID-19 and uncertainty related to market recovery.
Bottom Line
All said, we hope that the sturdy e-commerce business and store reopening efforts will provide some cushion to this Zacks Rank #3 (Hold) company amid the ongoing COVID-19 crisis. We note that shares of this company have declined 23.1% year to date against the industry’s growth of 1.4%.
Whirlpool Corporation (WHR - Free Report) has a long-term earnings growth rate of 16.7%. Currently, it sports a Zacks Rank #1.
Hanesbrands (HBI - Free Report) , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 3.3%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Carter's Sales Gain on Solid Online Show Amid Coronavirus
Carter’s Inc. (CRI - Free Report) has been gaining from its advanced e-commerce capabilities along with increased demand for products online. The company’s e-commerce operations performed well in the second quarter of 2020 with comps growth of 101%. Notably, majority of online orders were fulfilled with its ship-from-store facility. In fact, store fulfillment of its online purchases grew to 30% from 20% of e-commerce sales. It expects more than 70% of its stores to be able to fulfill online orders by August.
Notably, Carter’s same-day pickup service for online orders, easy access to a broad array of online products when shopping in stores and easy access to its new credit card program bode well for the future. The company is now focusing on its ship-from-store facility, which is likely to be rolled out to 600 of its stores by this fall. Apart from these, management has introduced curbside pickup for customers’ convenience.
Further, it witnessed sturdy e-commerce demand in the wholesale channel to the tune of more than 100%, with its top wholesale customers recording triple-digit growth in online demand. Alongside this, solid demand in wholesale stores that remained open during the second quarter aided quarterly results. That said, online sales are expected to exceed $1 billion in 2020 with increasing demand for products online, particularly baby, sleepwear and playwear products.
Moreover, Carter’s has started reopening stores across the United States due to the lifting of government restrictions. In the United States, roughly 97% of stores were reopened by the end of the second quarter. Following store reopenings, it is witnessing improved trends with healthy demand during the Jul 4 shopping season. Notably, the company recorded sturdy demand with comps growth of 8% in the United States, driven by higher conversion and transaction which more than offset the drab traffic.
However, the company’s sales for second-quarter 2020 were largely affected by store closures, particularly in April and May, due to the coronavirus outbreak. Also, reduced sales volume and sluggish royalty income weighed on operating margin in the aforementioned quarter. Moreover, management has refrained from providing any full-year guidance, citing the unprecedented impacts of COVID-19 and uncertainty related to market recovery.
Bottom Line
All said, we hope that the sturdy e-commerce business and store reopening efforts will provide some cushion to this Zacks Rank #3 (Hold) company amid the ongoing COVID-19 crisis. We note that shares of this company have declined 23.1% year to date against the industry’s growth of 1.4%.
Stocks to Consider
Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whirlpool Corporation (WHR - Free Report) has a long-term earnings growth rate of 16.7%. Currently, it sports a Zacks Rank #1.
Hanesbrands (HBI - Free Report) , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 3.3%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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