Carter's (CRI) 4th Annual Evercore ISI Consumer and Retail Conference summary

Market position and business overview

• Holds the largest market share in young children's apparel in North America, with strong positions in the U.S., Canada, Mexico, and Brazil.

• Sells essential core products for newborns to 10-year-olds, distributed through over 1,000 stores and major retailers like Target, Walmart, and Amazon.

• Generated over $1 billion in online sales last year, with a history of strong growth, top-quartile margins, and robust cash flow.

• Ended last year with over $1 billion in liquidity and $500 million in operating cash flow.

• Brands are present in over 90 countries and 20,000 points of distribution globally.

Growth strategies and store initiatives

• Growth expected from new store openings, especially in underserved small markets, and continued investment in omni-channel capabilities.

• Store Reimagined projects focus on consumer-centric layouts and premium experiences, with positive early results and plans for further rollout.

• Testing new formats like Best of Baby and Little Planet shop-in-shops to attract premium customers.

• Fleet optimization includes closing low-performing stores and opening in higher-potential locations, aiming for a net addition of about 200 stores over five years.

• New stores outperform older ones, and remodels are increasing productivity.

Consumer trends and macro environment

• Target consumers, typically young families, are under financial pressure due to inflation and rising living costs.

• Shoppers are buying closer to need, with less response to marketing and more focus on essentials.

• Retailers across sectors are seeing similar consumer caution, with a shift toward value and convenience.

• E-commerce remains strong but has normalized post-pandemic, with stores providing immediacy and convenience.