JHVEPhoto
Carter’s (New York Stock Exchange: CRI) shares fell sharply on Friday after providing a much lower-than-anticipated earnings forecast for the first quarter and next year.
For the fourth quarter reported Friday, the Atlanta-based retailer posted $2.29 in earnings per share, $0.49 better than analysts anticipated. Meanwhile, a 17.1% drop in revenue to $912 million was a smaller decline than Street had anticipated. US comparable sales fell 12.9% year-over-year.
“We saw stronger-than-expected demand for our brands in the final months of the year, enabling Carter’s to achieve its fourth-quarter sales and profit targets,” said Chief Executive Officer Michael D. Casey. “Our supply chain performance improved significantly in the second half of 2022, allowing for a stronger product offering for holiday shoppers and better on-time delivery of our new spring product offerings. Despite a very promotional market, we improved pricing realization in the fourth quarter, which, coupled with lower spend and better inventory results, delivered higher-than-expected cash flow.”
However, he cautioned that “inflation will continue to weigh on consumers” in 2023. Additionally, Casey said wholesale customers are carefully managing inventory commitments.
For the first quarter, the company projected between $630 million and $650 million in net sales, well below the consensus of $705.69 million. Additionally, a forecast of between $0.35 and $0.55 in adjusted diluted earnings per share was significantly below the analyst consensus of $1.23.
For the full year, net sales are expected to reach $3 billion, down from $3.2 billion in 2022 and below the consensus of $3.19 billion. An adjusted diluted EPS forecast of $6.15 also disappointed compared to the Street consensus of $6.52.
Carter’s Inc. (CRI) shares fell 3.7% shortly before the market opens on Friday.
Read more about the details of the results.
