Overview

• US children's apparel retailer's fiscal Q1 net sales rose 8%, with growth in all segments

• Adjusted EPS for fiscal Q1 beat analyst expectations

• Company's profitability pressured by higher tariffs, investment spending, and inflationary costs

Outlook

• Carter's sees 2026 net sales growing low to mid-single-digit percentages from $2.898 bln in 2025

• Company expects 2026 adjusted diluted EPS to decline low double-digit to mid-teens percentages

• For Q2 2026, Carter's projects adjusted EPS of $0.02 to $0.06 and net sales up low-single digits

Result Drivers

• STRONG RETAIL DEMAND - Co said strong demand across U.S. Retail, U.S. Wholesale, and International channels drove sales growth

• EASTER TIMING - Earlier Easter holiday boosted sales during the quarter

• TARIFFS AND INFLATION - Profitability was negatively affected by higher tariffs, investment spending, and inflationary cost pressures

Company press release: ID:nBw8SmhN4a

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Sales		$681 mln
Q1 Adjusted EPS	Beat	$0.39	$0.13 (7 Analysts)
Q1 EPS		$0.39
Q1 Adjusted Operating Margin		4.20%

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the apparel & accessories retailers peer group is "buy."

• Wall Street's median 12-month price target for Carter's Inc is $39.00, about 17% above its May 5 closing price of $33.34

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 12 three months ago

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