Carter's, Inc. (CRI)
NYSEConsumer DiscretionaryApparel - RetailSnapshot 2026-09-09
$32.07-0.65%
Close 2026-09-09 · 1-day change
NYSEConsumer DiscretionaryApparel - RetailSnapshot 2026-09-09
Warn: Primary pillar under pressure — Improve adjusted operating income: FY26 EPS guidance $3.47 vs Q1+Q2 actual $0.65; Q3 guide $0.85.
Carter's grows revenue about 8% yearly, showing steady demand. Free cash flow is expected near $115 million in 2026. The company keeps paying stable dividends of $0.25 per share. Recent earnings beats and a new CEO add confidence.
Operating income fell sharply from $84.7M to $28.4M, showing profit pressure. The sector faces headwinds and Carter's quality is fragile. Growth could slow below analyst expectations.
The price is about 3% above our fair value near $39, in line with Street targets. Analysts expect about 8% revenue growth, which we view as achievable but with margin risks.
Breaks if: dividend per share falls below $0.25 in FY26
Continue paying quarterly cash dividends to shareholders with discretion based on business conditions and financial performance.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on revenue growth and improved operating income. The current thesis state is intact, supported by strong recent financial performance.
The market currently prices CRI as cheap compared to its peers, with a notable expectations gap. This suggests that investors may not fully anticipate the company's potential for consistent revenue and income growth.
Management has prioritized increasing revenue and improving operating income, both of which are on track. Recent results show strong financial performance, but there is a moderate risk due to management volatility and sector challenges.
The long-term thesis hinges on management's ability to maintain guidance and navigate sector headwinds. Key factors include inflation trends and performance from sector leaders like TJX and ROST, which could influence CRI's momentum.
The most important moves since the prior daily snapshot.
Yes, our read has weakened. The latest earnings beat is a positive sign. However, a sharp drop in the stock price suggests the market may be repricing the thesis. This indicates growing concerns about future performance.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 3 of last 3 quarters. The Company declared and paid quarterly dividends of $0.25 per share in Q1 and Q2 2026, continuing a pattern from fiscal 2025 when $56.4 million was paid in dividends. Future dividends remain at Board discretion. The trajectory shows consistent maintenance of dividend payments.
“Declared quarterly dividend of $0.25 per share payable September 25, 2026.”
“Declared quarterly dividend of $0.25 per share payable June 5, 2026.”
“Paid cash dividends totaling $56.4 million in fiscal 2025.”
Breaks if: free cash flow falls below $110 million in FY26
Breaks if: adjusted operating income fails to grow or declines further in FY26
Enhance profitability through productivity initiatives, tariff mitigation, and cost management to grow operating income.
Stated as a priority in 3 of last 3 quarters. Operating income rose sharply from $4.0 million in 2025-Q2 to $139.8 million in 2026-Q2, driven by tariff refunds and productivity gains. Q1 2026 operating income increased modestly to $28.4 million from $26.1 million in 2025-Q1. The trajectory shows delivering significant improvement in operating income.
“Operating income increased $135.8 million to $139.8 million in Q2 2026.”
“Operating income increased $2.3 million to $28.4 million in Q1 2026.”
“Operating income was $84.7 million in Q4 2025, down from prior year.”
Breaks if: YoY revenue growth falls below 7.7% in FY26
Focus on growing net sales across all segments including U.S. Retail, U.S. Wholesale, and International channels.
Stated as a priority in 3 of last 3 quarters. Revenue grew from $629.8 million in 2025-Q1 to $681.1 million in 2026-Q1 (+8.1%) and from $585.3 million in 2025-Q2 to $615.5 million in 2026-Q2 (+5.2%). Fiscal 2025 net sales were $2.898 billion, up 2% from prior year. The trajectory shows delivering consistent revenue growth across segments.
“Net sales increased 5% in Q2 2026 reflecting growth in each segment.”
“Net sales increased 8.1% in Q1 2026 reflecting growth in each segment.”
“Net sales grew 8% in Q4 2025 and 2% in fiscal 2025.”
Over the next 1 to 3 years, CRI's performance will depend on its management execution and external economic factors. Not investment advice.