Navigating macroeconomic pressures impacting families with young children, Carter’s Inc remains committed to strengthening its brand presence and retail footprint, according to Michael D Casey, CEO and Chairman.
Aided by a $40 million investment in price reductions and an additional $10 million towards brand marketing in H2, FY24, the retailer’s sales in the US exceeded expectations, notes Casey. The investments also helped itboost in-store and online sales in Q3, FY24, he adds.
Despite lower wholesale sales to department and off-price stores compared to last year, Carter’s saw a positive lift from customers consolidating purchases at major retailers like Target, Walmart, and Amazon. International sales performed as expected.
The company’s best-selling segment, The Baby Apparel, grew by 2 percent and made up over half of total apparel sales, while baby and toddler apparel combined contributed more than 80 percent. In contrast, sales for children aged 4-10 decreased by double digits. Within its pricing categories, Carter’s saw strong growth in both low and premium tiers, particularly with its Little Planet, PurelySoft, and Baby B’gosh collections, which increased by 50 percent.
Holiday shopping has started to improve, spurred by colder weather, and strategic price reductions on staple items helped Carter’s maintain comparable U.S. retail unit volumes to last year.
Reiterating Carter’s commitment to brick-and-mortar, Casey emphasised, nearly 70 percent of children’s apparel is bought in-store, which also drives e-commerce sales. The company aims to open 250 US stores by 2027, projected to add $250 million in sales. In Q3, FY24, the brand’s omnichannel sales grew by 12 percent, with stores supporting 38 percent of digital orders. Carter’s also opened 40 high-margin stores during the quarter while closing 30 low-margin ones, with 98 percent of stores cash-flow positive.
The brand’s net income in Q3, FY24 declined by 11.8 percent to $58.3 million while net sales contracted by 4.2 percent to $758.5 million. For the full year, Carter’s projects, its EPS will range between $4.70 and $5.15 while net sales will grow to $2.79 billion-$2.83 billion, driven by partnerships with Walmart, Target, and Amazon, where unit volumes rose by 15 percent year-to-date.
