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.
Carter’s IncBeat-and-raise quarter with raised guidance and improved outlook
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