Carter’s, Inc. CRI announced updated control measures to cope with the novel coronavirus, which has been on a rampage. To this end, the company has decided to keep stores in North America closed until the situation normalizes. This move is in sync with its objective to safeguard the employees and customers from the impacts of the ongoing pandemic.
Due to extended store closures, management has put all store employees on leave from Apr 3. Although these employees will not receive their compensation for the furloughed period, they will be eligible for other employee benefits. Earlier, the company closed stores in the United States and Canada from Mar 19 to curb the spread of COVID-19. During this time, all employees had been paid salaries and received other benefits.
Similarly, retailers, including Macy’s M, Buckle BKE and Ross Stores ROST, have put thousands of employees on leave. Notably, Macy’s furloughed most of its 130,000 workers in the United States, per sources. Buckle decided to furlough most of its employees, including store and corporate office workers, starting Apr 5. Ross Stores recently furloughed most of its associates working in stores and distribution centers alongwith other associatesfrom Apr 5. This is valid till operations resume.
Meanwhile, the above-mentioned actions taken by Carter’s to curb the spread of the virus are likely to cause disruptions in the business. To combat this hurdle, the company is operating online to make its brands accessible to customers. In this regard, Carter’s products are being distributed via www.carters.com, www.oshkosh.com, www.skiphop.com, www.cartersoshkosh.ca and www.carters.com.mx to meet online demand of individual and wholesale consumers.
Apart from these, the company is making efforts to strengthen its financial position. Hence, it has cut down on inventories, capital spending and other expenses; revised payment conditions with vendors and landlords; implemented temporary pay cut and staff furloughs. Further, all hikes based on merits, incentives and 401(k) matching contributions have been suspended.
Prior to this, Carter’s withdrew the first quarter and 2020 outlook due to the unprecedented impact of COVID-19. Also, management has drawn $750 million from its revolving credit facility to strengthen financial stability. Moreover, it has suspended its share repurchase program.
In the past three months, shares of this Zacks Rank #3 (Hold) company have slumped 34% compared with the industry’s decline of 19.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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