Carter's (CRI) Q4 2024 earnings summary

Executive summary

• Fourth quarter 2024 net sales were $860M, up 0.2% year-over-year, with adjusted operating income of $115M and adjusted EPS of $2.39, both down 13% from last year.

• Full-year 2024 net sales declined 3% to $2.84B, with adjusted operating income down 13% to $287M and adjusted EPS down 6% to $5.81.

• U.S. Retail outperformed guidance due to higher sales and lower spending, while U.S. Wholesale grew 7% in Q4, led by exclusive brands.

• Leadership transition underway with the retirement of the long-serving CEO and an external search for a permanent replacement.

• Operating cash flow for 2024 was $299M, with $167M returned to shareholders via dividends and buybacks.

Financial highlights

• Q4 consolidated net sales were $860M; adjusted operating income was $115M (13.4% margin); adjusted EPS was $2.39.

• Full-year net sales were $2.84B, down 3%; adjusted operating income was $287M (10.1% margin); adjusted EPS was $5.81.

• GAAP net income for FY2024 was $186M, down 20%; adjusted net income was $211M, down 9%.

• Gross margin for FY2024 was 48.0%, up 60 bps year-over-year; Q4 gross margin was 47.8%.

• Inventory decreased 6% year-over-year, with improved product costs and fewer days of supply.

Outlook and guidance

• FY2025 net sales expected between $2.78B and $2.86B, flat to down 2% year-over-year.

• Adjusted operating income forecasted at $180M–$210M; adjusted EPS projected at $3.20–$3.80.

• Operating cash flow for 2025 projected at $200M; CapEx planned at $65M.

• Q1 2025 sales expected at $615M–$625M, with adjusted EPS $0.45–$0.55.

• Profitability in 2025 expected to be weighed by lower pricing, higher product costs, and increased compensation.