Carter's Q1 Earnings Call Highlights

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Sat, May 9, 2026 astatine 5:06 PM CDT 8 min read

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Q1 results bushed expectations arsenic Carter’s reported $681 cardinal successful nett sales, up 8%, with stronger request crossed retail, wholesale and planetary channels. However, profitability was pressured, with adjusted EPS down to $0.39 from $0.66 a twelvemonth agone and gross borderline falling much than 300 ground points.
Tariffs stay the biggest headwind, with absorption saying incremental tariff costs wounded gross borderline and wholesale profitability. Carter’s has filed for astir $130 cardinal successful tariff refunds, but it is not recognizing them yet due to the fact that currency has not been received and the outlook remains uncertain.
U.S. retail and planetary income stayed strong, with U.S. retail comparable income up much than 10% for the 4th consecutive 4th and planetary income rising 14% reported, led by Canada and particularly Mexico. The institution reaffirmed full-year guidance and expects low- to mid-single-digit income maturation for fiscal 2026.

Carter's (NYSE:CRI) reported stronger-than-expected first-quarter fiscal 2026 income and earnings, with maturation crossed its retail, wholesale and planetary businesses, but absorption said tariffs, higher spending and involvement costs continued to measurement connected profitability.

Interim Chief Executive Officer and President, Chief Financial Officer and Chief Operating Officer Richard Westenberger said the twelvemonth was “off to a bully start,” with first-quarter income and net exceeding the expectations the institution had provided connected its anterior net call. He besides addressed a enactment transition, noting that Doug Palladini had departed arsenic CEO and that Carter’s expects to invited Sharon Price John arsenic its caller CEO adjacent month.

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“We saw higher year-over-year request for our brands crossed each of our channels successful the archetypal quarter,” Westenberger said, adding that an earlier Easter vacation benefited request and that consumers appeared to beryllium buying broadly during the period.

First-Quarter Sales Rise, But EPS Declines

Carter’s reported first-quarter nett income of $681 million, up 8% from the anterior year. Reported operating income was $28 million, compared with $26 cardinal a twelvemonth earlier. Reported net per stock were $0.39, down from $0.43 successful the prior-year quarter.

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On an adjusted basis, Carter’s said it had nary adjustments to first-quarter 2026 results, portion the prior-year play included adjustments tied to operating exemplary betterment costs and enactment modulation costs. Adjusted net per stock were $0.39, compared with $0.66 a twelvemonth earlier.

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