Carter’s Q4 EPS $1.90 Beats Estimates, Sales Up 7.6% as Guidance Falls Short
Carter’s reported adjusted Q4 EPS of $1.90 versus $1.70 expected on consolidated net sales of $925.5 million, up 7.6% year over year including an extra week contribution. Soft first-quarter revenue and operating-income guidance triggered a 15% share decline despite the beat.
1. Q4 Financial Performance
Carter’s adjusted EPS of $1.90 exceeded estimates by $0.20 while consolidated net sales climbed 7.6% to $925.5 million year over year, bolstered by an extra week. Gross margin contracted 460 basis points to 43.2% and adjusted operating income fell 22.2% to $89.5 million due to higher tariffs, mix shifts and compensation provisions.
2. Segment Sales Breakdown
U.S. Retail revenue rose 9.4% to $509.8 million with comparable sales up 4.7%, U.S. Wholesale sales increased 3.4% to $274.4 million and International sales surged 10.2% to $141.2 million driven by pricing and persistent global demand.
3. Liquidity and Capital Structure
The company ended fiscal 2025 with $487.1 million in cash, $567.2 million in net long-term debt and $1.2 billion in total liquidity. It issued $575 million of 7.375% senior notes due 2031 to redeem 2027 debt and secured a five-year $750 million asset-based revolving credit facility.
4. 2026 Outlook and Guidance
For fiscal 2026, Carter’s forecasts low to mid-single-digit net-sales growth from $2.898 billion, modest operating-income gains and a low double-digit to mid-teens EPS decline from $3.47. First-quarter guidance anticipates mid-single-digit revenue growth, $12–$15 million of operating income and $0.02–$0.08 in EPS.