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Here's How Carter's (CRI) Looks Just Ahead of Q1 Earnings

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Carter's, Inc. (CRI - Free Report) is likely to see a decline in the top and bottom lines from the year-ago quarter’s reported figure when it reports first-quarter 2022 earnings on Apr 29, before the opening bell. The Zacks Consensus Estimate for first-quarter revenues is pegged at $747.9 million, indicating an increase of 5% from that reported in the year-ago quarter.

Although the Zacks Consensus Estimate for first-quarter earnings has increased by a penny to $1.34 in the past seven days, the same suggests a fall of 32.3% from the year-ago quarter’s reported figure.

The branded marketer of apparel, exclusively for babies and children in North America, has a trailing four-quarter earnings surprise of 198.9%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by 13.2%.

Carter's, Inc. Price and EPS Surprise

 

Carter's, Inc. Price and EPS Surprise

Carter's, Inc. price-eps-surprise | Carter's, Inc. Quote

Factors to Note

Carter’s has been gaining from solid demand, sales growth in the retail, wholesale and international segments, and improved price realization. A few structural changes, including compelling product offerings, shutting down of low-margin stores, better inventory management, improved marketing efforts and enhanced price realization, are also likely to have aided the first-quarter 2022 performance.

Higher demand for its brands across all channels is expected to have aided the company in the first quarter.

The momentum in online demand, driven by expanded product delivery options, bodes well. The company is expected to have benefited from enhanced e-commerce capabilities and increased investments to speed up deliveries in the first quarter.

It has been witnessing a solid online performance, driven by expanded omnichannel facilities, including curbside pickup, same-day pickup, buy online and pick up at store, and ship from store, along with easy access to a broad array of online products when shopping in stores. Gains in the e-commerce business are likely to get reflected in the company’s top-line results for the first quarter.

However, Carter’s has been witnessing higher costs related to compensation provisions, brand marketing and technology initiatives. Also, elevated transportation costs, higher air freight and ocean container charges have been hurting the gross margin. The company’s margins are expected to have been affected by the persistence of these charges and costs in the first quarter.

On its last reported quarter’s earnings call, management issued a sluggish first-quarter 2022 view. Net sales are expected to be $740-$750 million, down from $787 million reported in the prior-year quarter. Adjusted earnings are likely to be $1.25-$1.35, down from $1.98 reported in the prior-year quarter. Adjusted operating income is expected to increase $85-$90 million, which compares unfavorably with $128.5 million reported in the prior-year quarter. The view includes the impacts of supply-chain headwinds and the shift of the Easter holiday season to the second quarter.

What the Zacks Model Unveils

Our proven model conclusively predicts an earnings beat for Carter's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Carter's currently has a Zacks Rank #2 and an Earnings ESP of +2.99%.

Other Stocks With Favorable Combination

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:

Marriott International (MAR - Free Report) currently has an Earnings ESP of +3.84% and a Zacks Rank of 3. The company is likely to register an increase in the top and bottom lines when it reports first-quarter 2022. The Zacks Consensus Estimate for quarterly earnings moved down by a penny to 94 cents per share in the past 30 days, suggesting 840% growth from the year-ago quarter’s reported number.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Marriott’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.2 billion, which suggests a rise of 80.1% from the figure reported in the prior-year quarter. MAR has delivered an earnings beat of 86.6%, on average, in the trailing four quarters.

Gildan Activewear (GIL - Free Report) has an Earnings ESP of +10.20% and a Zacks Rank of 3 at present. The company is likely to register an increase in the top and bottom lines when it reports first-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings has moved up by a penny to 49 cents per share in the past seven days, suggesting an increase of 2.1% from the year-ago quarter’s reported number.

Gildan’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $656.7 million, which suggests a rise of 11.4% from the figure reported in the prior-year quarter. GIL has delivered an earnings beat of 66.6%, on average, in the trailing four quarters.

Callaway Golf currently has an Earnings ESP of +4.35% and a Zacks Rank #3. ELY is anticipated to register top-line growth when it reports first-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly revenues is pegged at $1.01 billion, indicating an improvement of 55.7% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Callaway Golf’s bottom line has moved down by a penny in the past seven days to 23 cents per share. This suggests a decline of 62.9% from 62 cents reported in the year-ago quarter. ELY has delivered an earnings beat of 1,062%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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