Carter’s Inc

Carter's, Inc. declared a quarterly dividend of US$0.25 per share, payable on September 25, 2026, to shareholders of record as of September 1, 2026, and became DoorDash's largest kids' apparel assortment for rapid back-to-school delivery. The company also reported earnings that exceeded expectations and raised its outlook, citing marketing and productivity improvements and strength in its baby segment. The new dividend and DoorDash partnership are seen as modest supports to brand reach and confidence, but the core investment narrative still hinges on the baby franchise's resilience against weaker birth trends and rising tariffs. Carter's projects $3.1 billion revenue and $134.4 million earnings by 2029, implying a fair value of $42.67 per share, a 24% upside to its current price. The most optimistic analysts see revenue near $3.2 billion and earnings near $127.8 million, highlighting divergent views on the company's future.

Carter's (CRI), a Zacks Rank #1 (Strong Buy) and the leading marketer of children's apparel in the United States, delivered a beat-and-raise quarter, and the stock's pullback from post-earnings highs presents a buying opportunity at support levels that have held all year. The company posted Q2 EPS of $0.26, up from $0.17 a year ago and 1200% above estimates, with revenue of $615 million, up from $585 million. Management raised Q3 EPS guidance to $0.85 from $0.02 in the prior-year period, narrowed FY26 sales growth outlook to 2-3%, and improved adjusted EPS outlook to a high-single-digit to low-double-digit decline, a meaningful upgrade from the prior forecast. Operating cash flow guidance was raised to $230-240 million, and capex guidance was lowered to roughly $50 million, with tariff costs tracking about $75 million below original assumptions. Analyst estimates have moved higher across all timeframes, with the current quarter estimate climbing to $0.85 from $0.77, and the stock finding support in the $31-$34 range, a long-term Fibonacci level.

Zacks Investment Research added five stocks to its Zacks Rank #1 Strong Buy list on August 24th. Federated Hermes saw its current-year earnings consensus estimate increase 7% over the last 60 days, nVent Electric's rose 12.8%, National Energy Services Reunited's rose 8.3%, Crawford & Company's rose 14.1%, and Carter's rose 6.2%. The list highlights companies with rising earnings estimates.

Carter's, Inc. declared a quarterly dividend of $0.25 per share, payable on September 25, 2026, to shareholders of record at the close of business on September 1, 2026. The Board of Directors made the declaration, and future dividends will be at the discretion of the Board based on business conditions, financial performance, investment priorities, and other considerations. Carter's is North America's largest apparel company exclusively for babies and young children, with brands including Carter's, OshKosh B'gosh, and others sold through more than 1,000 company-operated stores and online.

DoorDash announced new back to school delivery partnerships with Barnes & Noble, Carter's, Kohl's and Gap/Gap Factory, marking its largest push into nationwide retail, books and department stores. The partnerships extend DoorDash's delivery coverage into books, kids' apparel and broader department store categories across the US ahead of the back to school shopping period. These additions expand DoorDash's non-food offering and give users more ways to consolidate everyday and seasonal spending within the platform.

Carter’s Inc. reported second-quarter 2026 net sales of $615.49 million and net income of $104.96 million, while a tariff recovery left it holding more than $650 million in cash. The company delivered its fifth straight quarter of comparable retail sales growth and a very large increase in adjusted operating profit, but tightened its full-year outlook to a modest 2% to 3% net sales increase. Management’s new guidance contrasts with the strong quarter, highlighting the debate over Carter’s growth ceiling and margin resilience amid investments in product, marketing, and supply chain. The tariff recovery amounted to $132 million, and the company’s narrative projects $3.1 billion in revenue and $134.4 million in earnings by 2029, requiring 1.9% yearly revenue growth and a roughly $46 million earnings increase from $88.2 million today.

Carter's, Inc. reported a 23% increase in revenue for the second quarter of 2026, driven by broad-based performance across business lines and prior investments in technology and AI. Organic growth improved to 5% from 1% in the prior year, with management targeting double-digit organic growth in the second half of 2026 through expanded cross-selling. The Enterprise Payroll Tax platform reached a milestone with 2 million employees from Vensure Employer Solutions now live on the system, and the AsureCentral platform hosts a majority of the company's 30,000 direct clients. Full-year 2026 revenue guidance is set at $159 million to $163 million, while medium-term targets remain at $180 million to $200 million in revenue with adjusted EBITDA margins of 30% or better. Management noted a shift in revenue mix as the Lathem acquisition transitions to a Hardware-as-a-Service model, creating a $600,000 headwind in early 2027 but improving long-term recurring value.

Carter's reported second-quarter non-GAAP earnings per share of $0.26, beating analyst estimates by $0.20, while revenue of $615 million, a 5.1% increase year-over-year, exceeded expectations by $8.86 million. U.S. Retail comparable sales grew 5.1%. For fiscal 2026, the company projects net sales growth of 2% to 3%, adjusted operating income growth in the low to mid single-digit percentage range, and a high single-digit to low double-digit percentage decline in adjusted diluted earnings per share. Operating cash flow is expected between $230 million and $240 million, with capital expenditures of $50 million. Shares rose 6% in pre-market trading.

Carter's is currently highlighted as a strong value stock, holding a Zacks Rank #2, or Buy, and an A grade for Value. The stock trades with a price-to-earnings ratio of 11.92, well below its industry average of 20.22, and its forward P/E has ranged from 7.27 to 14.58 over the past year. Its price-to-sales ratio stands at 0.51, compared to the industry average of 0.75, suggesting the stock may be undervalued. These metrics, combined with a positive earnings outlook, make Carter's an appealing choice for value investors.

Carter's reported first-quarter 2026 U.S. Retail net sales increased nearly 13%, driven by comparable sales growth of more than 10% across stores and e-commerce channels. The Baby assortment remained the primary growth driver, while Toddler and Kid categories also reflected gains. For full-year 2026, the company expects net sales growth in the low to mid-single-digit range compared with 2025, supported by growth across all major business segments including U.S. Retail, U.S. Wholesale and International. Adjusted operating income is also expected to increase in the low to mid-single-digit range, with a larger portion of profit growth anticipated in the second half of the year as tariff pressures moderate and pricing benefits improve. Management maintained its operating cash flow forecast of $110-$120 million and expects capital expenditures of roughly $55 million.

Carter's reported a nearly 13% increase in U.S. Retail net sales in the first quarter, with comparable sales rising more than 10%, marking the fourth consecutive quarter of positive comps. The company attributed the gains to stronger customer engagement and increased traffic across stores and e-commerce, rather than relying solely on higher prices. Management noted that while shoppers remain value-conscious, Carter's achieved low-single-digit growth in average unit retail prices and double-digit growth in unit sales. The company also added more Gen Z parents to its customer file, with these consumers gravitating toward higher-priced merchandise. Marketing investments across social media, connected TV, and influencer partnerships helped drive brand awareness and consumer engagement.

Carter's has introduced a new Dadfirmations hotline ahead of Father's Day and expanded its partnership with Boys & Girls Clubs of America by adding a parenting resource destination with expert guidance and real parent stories. The children's apparel company, trading at around $41.1 per share, is positioning these initiatives as a push to deepen its role in everyday family life beyond clothing. The hotline and in-store recording stations aim to bring parents and children into the Carter's ecosystem, while the online parenting hub seeks to drive more frequent direct-to-consumer engagement among its over 9 million loyalty members. Investors may watch for metrics such as digital traffic and repeat purchase behavior to gauge whether these community-focused efforts translate into measurable sales or loyalty improvements.

Carter's is currently trading at a price-to-earnings ratio of 11.92, well below its industry's average of 21.32, and a price-to-sales ratio of 0.51 compared to the industry's 0.78, suggesting the stock may be undervalued. The company holds a Zacks Rank #2, or Buy, and an A grade for Value. Over the past year, its forward P/E has ranged from 7.27 to 14.58, with a median of 10.72. These metrics, combined with a strong earnings outlook, make Carter's an impressive value stock right now.

Carter’s shares rose 3.5% in premarket trading on Monday after Wells Fargo upgraded the children’s apparel retailer to Equal Weight from Underweight and raised its price target to $42 from $30. Analyst Ike Boruchow cited improving execution under new leadership, continued momentum in direct-to-consumer operations, and the potential impact of lower tariff rates as key reasons for the more constructive outlook. Wells Fargo also raised its fiscal 2026 earnings-per-share estimate to $3.30 from $3.00 and its fiscal 2027 forecast to $3.80 from $3.50, both above Wall Street consensus estimates of $3.22 and $3.61, respectively. The new $42 price target is based on 11 times projected fiscal 2027 earnings per share, reflecting the firm’s view that operational improvements and tariff-related benefits could support additional upside.