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Carter's (CRI) to Report Q3 Earnings: What's in the Offing?
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Carter’s, Inc. (CRI - Free Report) is slated to release third-quarter 2018 results on Oct 25. Notably, the company’s earnings outpaced estimates in the trailing four quarters, delivering an average positive surprise of 15.3%.
In fact, the company boasts a robust surprise history, having reported earnings beat in 17 of the preceding 18 quarters. For the to-be-reported quarter, the Zacks Consensus Estimate is pegged at $1.70 per share, which moved down by a penny over the past 30 days. Nevertheless, estimates have been flat year over year. Further, analysts polled by Zacks anticipate total revenues of $947.5 million, down 0.1% year over year.
For third-quarter 2018, management envisions adjusted earnings per share to be flat with the prior-year quarter earnings of $1.70. Also, net sales are anticipated to be flat with the figure registered in the third quarter of 2017.
How Things are Shaping Up for This Announcement
Carter’s has been benefiting from its Retail strategy, which is focused on improving store productivity, strengthening e-commerce business and enhancing product offerings by introducing extended sizes for the Carter’s brand and expanding Skip Hop brand offerings. The company’s Skip Hop and Age Up initiatives are expected to drive retail sales in 2018. Additionally, the company is witnessing a positive response for its co-branded stores, which is a one-stop shop for families with young children. These stores have been the most productive lately, receiving the highest promoter scores and return on investment.
Carter’s also continues to experience robust growth in its International business, which is likely to boost its third-quarter results. Notably, strength in Canada and solid contributions from Mexico and Skip Hop led to segmental growth. In fact, more than 60% of the company’s International sales are generated from Canada, which is likely to be the largest contributor toward International growth in the next five years. Further, Carter’s is on track with the integration of the Mexico business and anticipates about $30 million sales contribution from Mexico in the current year. The company expects China to generate about $20 million sales in 2018, with significant e-commerce sales growth through Tmall.
These apart, Carter’s is seeking opportunities to strengthen e-commerce capabilities through investments to speed up deliveries. In the last reported quarter, the company’s e-commerce sales improved double-digits. It has the largest share of e-commerce sales in the young children’s category in the United States. These initiatives are likely to boost the upcoming quarterly results.
However, the closure of Toys “R” Us stores across the United States is largely weighing on the performance of Carter’s Wholesale segment that witnessed sales decline of 3.8% in second-quarter 2018. Though the company expects to recover lost sales to Toys “R” Us through its solid U.S. retail store presence in the long run, it anticipates the absence of planned sales to Toys “R” Us for 2018 to result in soft wholesale sales for the year. For 2018, the company projects sales decline in low-single digits range for the Wholesale segment. This remains a concern in the third quarter as well.
Consequently, the stock has declined 17.5% year to date, against the industry’s 13.6% rally.
Additionally, higher SG&A expenses due to higher cost of investments in technology and marketing initiatives are denting the company’s operating margin, which remains a headwind.
Nevertheless, management assumes a partial recovery of lost sales, which was initially planned for Toys “R” Us and Bon-Ton in the third quarter.
A Look at the Zacks Model
Our proven model does not conclusively show that Carter’s is likely to beat estimates this quarter. That is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Carter’s Earnings ESP of -0.59% and a Zacks Rank #4 (Sell) make surprise prediction difficult.
As it is we caution against stocks with a Zacks Ranks #4 or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing a negative estimate revision.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to beat estimates:
DICK'S Sporting Goods, Inc. (DKS - Free Report) has an Earnings ESP of +9.61% and a Zacks Rank of 2.
The Michaels Companies, Inc. has an Earnings ESP of +3.41% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Carter's (CRI) to Report Q3 Earnings: What's in the Offing?
Carter’s, Inc. (CRI - Free Report) is slated to release third-quarter 2018 results on Oct 25. Notably, the company’s earnings outpaced estimates in the trailing four quarters, delivering an average positive surprise of 15.3%.
In fact, the company boasts a robust surprise history, having reported earnings beat in 17 of the preceding 18 quarters. For the to-be-reported quarter, the Zacks Consensus Estimate is pegged at $1.70 per share, which moved down by a penny over the past 30 days. Nevertheless, estimates have been flat year over year. Further, analysts polled by Zacks anticipate total revenues of $947.5 million, down 0.1% year over year.
Carter's, Inc. Price, Consensus and EPS Surprise
Carter's, Inc. Price, Consensus and EPS Surprise | Carter's, Inc. Quote
For third-quarter 2018, management envisions adjusted earnings per share to be flat with the prior-year quarter earnings of $1.70. Also, net sales are anticipated to be flat with the figure registered in the third quarter of 2017.
How Things are Shaping Up for This Announcement
Carter’s has been benefiting from its Retail strategy, which is focused on improving store productivity, strengthening e-commerce business and enhancing product offerings by introducing extended sizes for the Carter’s brand and expanding Skip Hop brand offerings. The company’s Skip Hop and Age Up initiatives are expected to drive retail sales in 2018. Additionally, the company is witnessing a positive response for its co-branded stores, which is a one-stop shop for families with young children. These stores have been the most productive lately, receiving the highest promoter scores and return on investment.
Carter’s also continues to experience robust growth in its International business, which is likely to boost its third-quarter results. Notably, strength in Canada and solid contributions from Mexico and Skip Hop led to segmental growth. In fact, more than 60% of the company’s International sales are generated from Canada, which is likely to be the largest contributor toward International growth in the next five years. Further, Carter’s is on track with the integration of the Mexico business and anticipates about $30 million sales contribution from Mexico in the current year. The company expects China to generate about $20 million sales in 2018, with significant e-commerce sales growth through Tmall.
These apart, Carter’s is seeking opportunities to strengthen e-commerce capabilities through investments to speed up deliveries. In the last reported quarter, the company’s e-commerce sales improved double-digits. It has the largest share of e-commerce sales in the young children’s category in the United States. These initiatives are likely to boost the upcoming quarterly results.
However, the closure of Toys “R” Us stores across the United States is largely weighing on the performance of Carter’s Wholesale segment that witnessed sales decline of 3.8% in second-quarter 2018. Though the company expects to recover lost sales to Toys “R” Us through its solid U.S. retail store presence in the long run, it anticipates the absence of planned sales to Toys “R” Us for 2018 to result in soft wholesale sales for the year. For 2018, the company projects sales decline in low-single digits range for the Wholesale segment. This remains a concern in the third quarter as well.
Consequently, the stock has declined 17.5% year to date, against the industry’s 13.6% rally.
Additionally, higher SG&A expenses due to higher cost of investments in technology and marketing initiatives are denting the company’s operating margin, which remains a headwind.
Nevertheless, management assumes a partial recovery of lost sales, which was initially planned for Toys “R” Us and Bon-Ton in the third quarter.
A Look at the Zacks Model
Our proven model does not conclusively show that Carter’s is likely to beat estimates this quarter. That is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Carter’s Earnings ESP of -0.59% and a Zacks Rank #4 (Sell) make surprise prediction difficult.
As it is we caution against stocks with a Zacks Ranks #4 or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing a negative estimate revision.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to beat estimates:
Boot Barn Holdings, Inc. (BOOT - Free Report) has an Earnings ESP of +3.70% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
DICK'S Sporting Goods, Inc. (DKS - Free Report) has an Earnings ESP of +9.61% and a Zacks Rank of 2.
The Michaels Companies, Inc. has an Earnings ESP of +3.41% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>