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Carter's (CRI) Up 6.7% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Carter's (CRI - Free Report) . Shares have added about 6.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Carter's due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Carter’s delivered solid first-quarter 2026 results, wherein earnings and revenues beat the Zacks Consensus Estimate. The company posted adjusted earnings of 39 cents per share, topping the Zacks Consensus Estimate of 7 cents. However, the metric fell 40.9% from the year-ago quarter.
Net sales increased 8.1% from the year-ago quarter to $681.1 million, supported by broad-based demand across segments and a strong Easter selling period. This exceeded the consensus mark of $662 million by 2.9%. A key operating highlight was U.S. Retail comparable net sales growth of 10.5%, marking the fourth straight quarter of increase.
CRI's Segments Drive Top-Line Gains
CRI’s U.S. Retail segment net sales rose 12.8% year over year to $332.2 million.The U.S. Wholesale segment’s sales edged up 0.5% year over year to $251.4 million.The International segment recorded a 14.3% year-over-year increase in sales to $97.5 million.
Focus on CRI’s Margins
Gross profit inched up 1% year over year to $293.9 million. Adjusted operating income decreased 19.6% to $28.4 million, and the adjusted operating margin fell 140 basis points to 4.2%, mainly owing to higher tariff costs, inflationary pressure in store-associated costs, partly offset by pricing, favorable channel mix and gains from cost savings.
CRI’s Financial Snapshot
Carter’s ended first-quarter 2026 with cash and cash equivalents of $473.4 million, net long-term debt of $567.5 million and shareholders’ equity of $928.5 million. Net cash provided by operating activities was $6.4 million against a $48.6 million use of cash in the year-ago quarter,
In the first quarter of 2026, the company paid a dividend of 25 cents a share in cash, amounting to $9.2 million. It did not repurchase shares in the reported quarter.
CRI's Q2 & 2026 View
Carter’s second-quarter and 2026 outlook include CEO transition-related adjustments. The company expects low single-digit to mid-single-digit percentage growth in net sales and adjusted operating income compared with fiscal 2025, alongside a low double-digit to mid-teens percentage decrease in adjusted earnings per share. It reported net sales of $2.9 billion, adjusted operating income of $176 million and adjusted earnings per share of $3.47 in 2025. Management projected operating cash flow of $110-$120 million and capital expenditures of $55 million for the year.
Earnings contributions weighted to the second half owing to higher projected tariff impacts and investment spend in the first half compared with the second half. 2026 outlook includes lower gross margin rate on higher tariff costs, partly offset by pricing, other tariff-mitigation efforts and productivity savings; and low-single digit rise in SG&A for the year.
For the second quarter of 2026, CRI projects low-single-digit net sales growth compared with $585 million in the prior-year quarter, adjusted operating income of $11-$13 million and adjusted earnings per share of 2-6 cents. The outlook assumes an earlier Easter benefit, a lower gross margin rate tied to tariff impacts and low single-digit SG&A growth.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -85.71% due to these changes.
VGM Scores
Currently, Carter's has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Carter's has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Carter's (CRI) Up 6.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Carter's (CRI - Free Report) . Shares have added about 6.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Carter's due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Carter's Q1 Earnings Beat Estimates, Retail Segment Sales Rise 12.8%
Carter’s delivered solid first-quarter 2026 results, wherein earnings and revenues beat the Zacks Consensus Estimate. The company posted adjusted earnings of 39 cents per share, topping the Zacks Consensus Estimate of 7 cents. However, the metric fell 40.9% from the year-ago quarter.
Net sales increased 8.1% from the year-ago quarter to $681.1 million, supported by broad-based demand across segments and a strong Easter selling period. This exceeded the consensus mark of $662 million by 2.9%. A key operating highlight was U.S. Retail comparable net sales growth of 10.5%, marking the fourth straight quarter of increase.
CRI's Segments Drive Top-Line Gains
CRI’s U.S. Retail segment net sales rose 12.8% year over year to $332.2 million.The U.S. Wholesale segment’s sales edged up 0.5% year over year to $251.4 million.The International segment recorded a 14.3% year-over-year increase in sales to $97.5 million.
Focus on CRI’s Margins
Gross profit inched up 1% year over year to $293.9 million. Adjusted operating income decreased 19.6% to $28.4 million, and the adjusted operating margin fell 140 basis points to 4.2%, mainly owing to higher tariff costs, inflationary pressure in store-associated costs, partly offset by pricing, favorable channel mix and gains from cost savings.
CRI’s Financial Snapshot
Carter’s ended first-quarter 2026 with cash and cash equivalents of $473.4 million, net long-term debt of $567.5 million and shareholders’ equity of $928.5 million. Net cash provided by operating activities was $6.4 million against a $48.6 million use of cash in the year-ago quarter,
In the first quarter of 2026, the company paid a dividend of 25 cents a share in cash, amounting to $9.2 million. It did not repurchase shares in the reported quarter.
CRI's Q2 & 2026 View
Carter’s second-quarter and 2026 outlook include CEO transition-related adjustments. The company expects low single-digit to mid-single-digit percentage growth in net sales and adjusted operating income compared with fiscal 2025, alongside a low double-digit to mid-teens percentage decrease in adjusted earnings per share. It reported net sales of $2.9 billion, adjusted operating income of $176 million and adjusted earnings per share of $3.47 in 2025. Management projected operating cash flow of $110-$120 million and capital expenditures of $55 million for the year.
Earnings contributions weighted to the second half owing to higher projected tariff impacts and investment spend in the first half compared with the second half. 2026 outlook includes lower gross margin rate on higher tariff costs, partly offset by pricing, other tariff-mitigation efforts and productivity savings; and low-single digit rise in SG&A for the year.
For the second quarter of 2026, CRI projects low-single-digit net sales growth compared with $585 million in the prior-year quarter, adjusted operating income of $11-$13 million and adjusted earnings per share of 2-6 cents. The outlook assumes an earlier Easter benefit, a lower gross margin rate tied to tariff impacts and low single-digit SG&A growth.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -85.71% due to these changes.
VGM Scores
Currently, Carter's has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Carter's has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.