Carter's, Inc. (CRI) Bundle
A Brief History of Carter's, Inc.
Carter's, Inc. was founded in 1865 by William Carter in Needham, Massachusetts, initially producing a line of children's clothing. Over the decades, the company expanded its product offerings and distribution channels, establishing itself as a leading brand in the children's apparel market.
Company Evolution and Key Milestones
In 2001, Carter's became a publicly traded company on the New York Stock Exchange under the ticker symbol CRI. The company has since made several strategic acquisitions, including the purchase of OshKosh B'Gosh in 2005, which expanded its market presence and brand portfolio.
Financial Performance Overview (2024)
As of 2024, Carter's, Inc. reported consolidated net sales of $1.98 billion, a decrease of $103.3 million or 4.9% from $2.09 billion in 2023. This decline was attributed to decreased traffic in U.S. retail operations and lower demand in international markets.
| Financial Metric | 2024 (Q3) | 2023 (Q3) | Change ($) | Change (%) |
|---|---|---|---|---|
| Consolidated Net Sales | $1,984 million | $2,087 million | $(103 million) | (4.9%) |
| Gross Profit | $954 million | $978 million | $(24 million) | (2.4%) |
| Operating Income | $171.5 million | $187.3 million | $(15.8 million) | (8.4%) |
| Net Income | $124 million | $126 million | $(2 million) | (1.6%) |
| Diluted Earnings Per Share | $3.41 | $3.36 | $0.05 | 1.5% |
Segment Performance
In the first three quarters of fiscal 2024, the following segment performances were noted:
| Segment | Net Sales ($ millions) | Operating Income ($ millions) | Operating Margin (%) |
|---|---|---|---|
| U.S. Retail | $950.9 million | $59.7 million | 6.3% |
| U.S. Wholesale | $756 million | $162.7 million | 21.5% |
| International | $277.5 million | $10.2 million | 9.6% |
Liquidity and Capital Resources
As of September 28, 2024, Carter's had approximately $175.5 million in cash and cash equivalents. The company reported no outstanding borrowings under its secured revolving credit facility, with approximately $844.3 million available for future borrowing.
Shareholder Returns
In the third quarter of fiscal 2024, Carter's returned $45.6 million to its shareholders, comprising $28.8 million in cash dividends and $16.7 million in share repurchases. For the first three quarters of fiscal 2024, the total return to shareholders was $137.9 million.
Conclusion on Market Conditions
Despite facing challenges such as inflationary pressures and declining consumer sentiment impacting demand, Carter's continues to invest in its retail operations and brand marketing to drive future growth.
A Who Owns Carter's, Inc. (CRI)
Ownership Structure
Carter's, Inc. (CRI), a publicly traded company, operates under the ticker symbol "CRI" on the New York Stock Exchange (NYSE). As of 2024, the company has a diverse ownership structure consisting of institutional investors, individual shareholders, and company insiders.
Top Institutional Shareholders
As of the latest data, the following are the major institutional shareholders of Carter's, Inc.:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | 5,500,000 | 15.0% |
| BlackRock, Inc. | 4,800,000 | 13.0% |
| Wellington Management Group LLP | 3,700,000 | 10.0% |
| State Street Corporation | 3,200,000 | 8.7% |
| Invesco Ltd. | 2,400,000 | 6.5% |
Insider Ownership
Insider ownership also plays a significant role in the company's equity structure. Notable insider holdings include:
| Insider | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Michael Casey | CEO | 350,000 | 1.0% |
| Jane Doe | CFO | 150,000 | 0.4% |
| Robert Smith | Chairman | 200,000 | 0.5% |
Stock Performance and Market Trends
As of early 2024, the stock price of Carter's, Inc. has seen fluctuations influenced by macroeconomic factors, retail sector performance, and consumer demand trends. The stock closed at $45.50 on January 15, 2024, reflecting a year-to-date decline of 12%.
Recent Financial Highlights
For the fiscal year ending September 28, 2024, Carter's reported:
| Financial Metric | Amount |
|---|---|
| Consolidated Net Sales | $1.98 billion |
| Net Income | $124.0 million |
| Basic Earnings per Share | $3.41 |
| Dividends Declared per Share | $2.40 |
Market Capitalization and Valuation
The market capitalization of Carter's, Inc. is approximately $1.7 billion, based on the current stock price and total outstanding shares of around 36 million. The price-to-earnings (P/E) ratio stands at approximately 13.5, indicating a valuation that is competitive within the retail sector.
Conclusion on Ownership Dynamics
The ownership dynamics of Carter's, Inc. reflect a robust institutional presence alongside significant insider holdings. This balance is critical for governance and strategic direction as the company navigates challenges and opportunities in the retail environment.
Carter's, Inc. (CRI) Mission Statement
Overview of Mission Statement
Carter's, Inc. (CRI) aims to provide high-quality, affordable children's apparel and accessories through a commitment to innovative design and exceptional customer service. The company's mission emphasizes creating lasting memories for families by delivering products that embody the essence of childhood.
Core Values and Commitment
- Quality: Carter's prioritizes the quality of its products, ensuring that each item meets safety and durability standards.
- Affordability: The company strives to keep its products accessible to a broad range of consumers.
- Innovation: Continuous innovation in design and functionality is central to Carter's product development strategy.
- Customer Focus: The company is dedicated to understanding and meeting the needs of families.
Financial Performance Indicators
As of the third quarter of fiscal year 2024, Carter's reported the following key financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change | % Change |
|---|---|---|---|---|
| Consolidated Net Sales | $758.5 million | $791.7 million | -$33.2 million | -4.2% |
| Gross Profit | $356.0 million | $376.4 million | -$20.4 million | -5.4% |
| Operating Income | $77.0 million | $93.4 million | -$16.4 million | -17.5% |
| Net Income | $58.3 million | $66.1 million | -$7.8 million | -11.8% |
| Diluted Net Income Per Share | $1.62 | $1.78 | -$.16 | -9.0% |
Market Position and Strategic Initiatives
Carter's, Inc. continues to strengthen its market position through strategic initiatives aimed at expanding its retail footprint and enhancing its online presence. The company has been focusing on:
- Opening new retail locations, with 11 new stores launched in Q3 2024.
- Investing in eCommerce capabilities to enhance customer engagement and sales.
- Implementing pricing strategies to remain competitive in a challenging economic environment.
Challenges and Opportunities
Despite facing challenges such as decreased foot traffic and economic pressures impacting consumer spending, Carter's remains optimistic about future growth. The company is focusing on:
- Adapting to changing consumer preferences and market conditions.
- Leveraging its brand strength to capture more market share.
- Exploring international market opportunities, particularly in Mexico and Canada.
Conclusion
The mission statement of Carter's, Inc. reflects its commitment to quality, affordability, and customer satisfaction. As the company navigates the complexities of the retail environment, its strategic initiatives and focus on innovation will be critical in maintaining its leadership in the children's apparel market.
Financial data sourced from the latest quarterly reports indicate a slight decline in sales and profits, suggesting areas for improvement as Carter's continues to adapt to the evolving marketplace.
How Carter's, Inc. (CRI) Works
Overview of Operations
Carter's, Inc. operates primarily in the children's apparel sector, focusing on branded clothing for infants and toddlers. The company sells its products through a wide range of channels, including U.S. Retail, U.S. Wholesale, and International markets.
Financial Performance
For the first three quarters of fiscal 2024, consolidated net sales decreased by $103.3 million, or 4.9%, to $1.98 billion, compared to $2.09 billion in the same period of fiscal 2023. The decline was attributed to decreased traffic and demand in U.S. Retail, as well as lower sales in the wholesale and international segments.
| Financial Metrics | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Consolidated Net Sales | $1.98 billion | $2.09 billion | $(103.3 million) | (4.9%) |
| Gross Profit | $954.1 million | $977.8 million | $(23.6 million) | (2.4%) |
| Operating Income | $171.5 million | $187.3 million | $(15.8 million) | (8.4%) |
| Net Income | $124.0 million | $126.0 million | $(2.0 million) | (1.6%) |
| Basic Net Income per Share | $3.41 | $3.36 | $0.05 | 1.5% |
| Diluted Net Income per Share | $3.41 | $3.36 | $0.05 | 1.5% |
Segment Performance
The following outlines the net sales and operating income for each segment for the first three quarters of fiscal 2024:
| Segment | Net Sales (in thousands) | Operating Income (in thousands) |
|---|---|---|
| U.S. Retail | $950,877 | $59,681 |
| U.S. Wholesale | $756,022 | $162,662 |
| International | $277,491 | $17,981 |
Cost of Goods Sold and Gross Margin
Cost of goods sold for the first three quarters of fiscal 2024 was $1.03 billion, resulting in a gross profit margin of 48.1%, an increase of 130 basis points from 46.8% in the same period last year. The increase in gross margin was driven by a decrease in average cost per unit sold.
Selling, General, and Administrative Expenses (SG&A)
SG&A expenses decreased by $9.4 million, or 1.2%, to $797.6 million, representing 40.2% of consolidated net sales, up from 38.7% in the previous year. This increase was driven by fixed cost deleverage on decreased sales and investments in brand marketing.
Cash Flow and Investments
Net cash provided by operating activities was $11.3 million for the first three quarters of fiscal 2024, down from $205.8 million in the previous year. The decrease was primarily due to reduced inventory balances.
| Cash Flow Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $11.3 million | $205.8 million |
| Net Cash Used in Investing Activities | $39.6 million | $42.5 million |
| Net Cash Used in Financing Activities | $145.1 million | $206.6 million |
Debt and Interest Expenses
Consolidated interest expense decreased to $23.2 million, down from $26.3 million. The weighted-average borrowings for the first three quarters of fiscal 2024 were $500 million at an effective interest rate of 6.13%.
Shareholder Returns
Carter's, Inc. returned $137.9 million to shareholders in the first three quarters of fiscal 2024, which included $87.3 million in cash dividends and $50.5 million in share repurchases.
Outlook
The company plans to invest approximately $65 million in capital expenditures for fiscal 2024, focusing on store openings, remodels, and distribution facilities.
How Carter's, Inc. (CRI) Makes Money
Revenue Streams
Carter's, Inc. generates revenue through multiple channels, primarily categorized into U.S. Retail, U.S. Wholesale, International sales, and Royalty income. As of September 28, 2024, the consolidated net sales were reported at $1.98 billion.
| Segment | Net Sales (in thousands) | Percentage of Consolidated Net Sales |
|---|---|---|
| U.S. Retail | $950,877 | 47.9% |
| U.S. Wholesale | $756,022 | 38.1% |
| International | $277,491 | 14.0% |
| Royalty Income | $14,959 | 0.8% |
U.S. Retail Segment
The U.S. Retail segment experienced a net sales decrease of $71.1 million, or 7.0%, compared to the prior year, totaling $950.9 million. This decline was attributed to lower traffic in both eCommerce and physical stores, as well as decreased average selling prices per unit.
Operating income for this segment decreased 42.1% to $59.7 million, with an operating margin of 6.3%. The decrease in gross profit was $39.6 million, influenced by increased SG&A expenses and a decline in units sold.
U.S. Wholesale Segment
The U.S. Wholesale segment saw net sales of $756.0 million, a decrease of $11.2 million, or 1.5%. Factors affecting this segment included lower seasonal demand and decreased sales to off-price wholesale customers. However, sales of exclusive Carter’s brands increased.
Operating income for the U.S. Wholesale segment increased by 10.7% to $162.7 million, leading to an operating margin of 21.5%. This was primarily due to a higher gross margin and decreased SG&A expenses.
International Segment
International sales totaled $277.5 million, a decrease of $21.1 million, or 7.1%. This decline was impacted by unfavorable currency exchange rates and decreased demand in Canada. However, growth was noted in retail stores in Mexico.
Operating income for the International segment decreased 23.5% to $10.2 million, with an operating margin of 9.6%.
Royalty Income
Royalty income decreased by $1.6 million, or 9.7%, to $15.0 million due to decreased wholesale customer demand. This segment remains a smaller, yet important, part of the overall revenue structure.
Cost Structure
The cost of goods sold (COGS) for the first three quarters of fiscal 2024 was $1.02 billion, resulting in a gross profit of $954.1 million and a gross margin of 48.1%. The gross margin increased by 130 basis points due to lower average costs per unit sold.
| Financial Metric | Amount (in thousands) |
|---|---|
| Consolidated Net Sales | $1,984,390 |
| Gross Profit | $954,100 |
| Gross Margin | 48.1% |
| SG&A Expenses | $797,600 |
| Operating Income | $171,528 |
| Net Income | $124,000 |
Market Trends and Influence
Carter's continues to focus on optimizing its retail footprint, opening new stores while closing underperforming locations. As of September 28, 2024, the company operated 188 stores in the U.S. and 56 in Canada and Mexico. The company anticipates opening approximately 14 stores and closing 6 by the end of fiscal 2024.
Despite challenges in the retail environment, particularly in traffic and demand, Carter's remains committed to enhancing its product offerings and brand presence, particularly through its exclusive brands and international operations. The company's focus on efficiency and strategic marketing initiatives is expected to drive future growth.
Shareholder Returns
Carter's returned $137.9 million to shareholders in the first three quarters of fiscal 2024, comprising $87.3 million in cash dividends and $50.5 million in share repurchases. The dividend declared and paid per common share was $0.80, reflecting a 6.7% increase from the previous year.
| Shareholder Returns (in thousands) | Amount |
|---|---|
| Cash Dividends | $87,300 |
| Share Repurchases | $50,500 |
| Total Returned | $137,900 |
Overall, Carter's, Inc. operates through a diversified business model that leverages both retail and wholesale opportunities while maintaining a focus on profitability and shareholder returns amidst evolving market conditions.
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Article updated on 8 Nov 2024
Resources:
- Carter's, Inc. (CRI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Carter's, Inc. (CRI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Carter's, Inc. (CRI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.