Carters Q1 EPS of $0.39 Beats Estimates as Revenue Hits $681M
Carters reported Q1 EPS of $0.39 versus $0.11 expected and revenue of $681 million versus $658.8 million consensus, lifting shares over 2%. Adjusted operating margin fell to 4.2% from 5.6% due to tariffs and inflation, yet the company reiterated low- to mid-single-digit sales and operating income growth targets.
1. Strong Q1 Earnings Beat
Carters delivered first-quarter earnings per share of $0.39 against analysts’ $0.11 forecast and generated $681 million in revenue versus $658.8 million consensus, prompting a more than 2% premarket share gain.
2. Margin Pressures
Adjusted operating margin contracted to 4.2% from 5.6% a year ago as higher tariff expenses, inflation-driven store costs and increased interest outlays offset gains from pricing actions and cost-saving measures.
3. Comparable Sales Growth
U.S. retail comparable sales climbed 10.5%, marking a fourth consecutive quarter of growth and reflecting strong demand across the company’s U.S. retail, wholesale and international channels.
4. Outlook and Leadership
The company maintained its forecast for low- to mid-single-digit net sales and operating income growth for fiscal 2026, projected adjusted EPS to decline low-double- to mid-teens percent, expects $110M–$120M operating cash flow and ~$55M capex, and named Sharon Price John as CEO next month.