Breaking Down Carter's, Inc. (CRI) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on the financial health of your investments? Let's dive into Carter's, Inc. (CRI), a leading player in children's apparel. In fiscal year 2024, the company reported net sales of $2.844 billion, compared to $2.946 billion in 2023. Net income for the same period decreased to $185.5 million from $232.5 million the previous year. Want to understand what these figures mean for the company's future and your investment? Keep reading to explore key insights into CRI's financial performance.

Carter's, Inc. (CRI) Revenue Analysis

Carter's, Inc. (CRI) generates revenue primarily through the sale of branded apparel and related products for babies and young children. These products are sold through various channels, including:

• Retail Stores: Carter's and OshKosh B'gosh operate their own retail stores across the United States and Canada.
• Wholesale: Products are sold to major retailers, department stores, and e-commerce platforms.
• Online: Direct-to-consumer sales are conducted through the company's websites, such as Carters.com and OshKosh.com.
• International: Sales are also generated through international wholesale and retail operations.

For the fiscal year 2024, Carter's, Inc. reported consolidated net sales of $3.014 billion. This reflects a decrease of $142.2 million, or 4.5%, compared to the fiscal year 2023. In 2024, United States Retail segment net sales were $1,452.8 million, down 5.9% compared to 2023. United States Wholesale segment net sales totaled $821.1 million, a decrease of 5.7%. International segment net sales reached $740.1 million, a slight increase of 0.6% versus the prior year.

Here's a breakdown of how different segments contributed to Carter's, Inc.'s overall revenue in fiscal year 2024:

Significant changes in revenue streams can be attributed to several factors. In the United States, both retail and wholesale segments experienced declines due to lower demand and challenging market conditions. The International segment saw a slight increase, indicating some resilience in overseas markets.

For further insights into the company's mission, vision, and core values, refer to: Mission Statement, Vision, & Core Values of Carter's, Inc. (CRI).

Carter's, Inc. (CRI) Profitability Metrics

Analyzing Carter's, Inc.'s financial health involves a close examination of its profitability metrics. This includes assessing gross profit, operating profit, and net profit margins to understand the company's efficiency in generating earnings. Let’s delve into these key areas to provide a clear picture of Carter's profitability.

When evaluating Carter's, Inc.'s profitability, several key metrics come into play:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). It reflects how efficiently a company manages its production costs.
• Operating Profit Margin: This margin reveals the percentage of revenue left after deducting both COGS and operating expenses. It provides insight into the company's profitability from its core business operations.
• Net Profit Margin: The net profit margin shows the percentage of revenue remaining after all expenses, including interest and taxes, have been deducted. It represents the company's overall profitability.

To fully grasp Carter's, Inc.'s financial performance, it's essential to analyze these profitability ratios over time. This reveals trends and patterns that can indicate whether the company's profitability is improving, declining, or remaining stable. Comparing these ratios with industry averages provides valuable context, highlighting how Carter's performs relative to its competitors.

Operational efficiency is a critical driver of profitability. Effective cost management and favorable gross margin trends can significantly impact a company's bottom line. For example, a rising gross margin suggests that Carter's, Inc. is becoming more efficient in managing its production costs or is able to command higher prices for its products.

Here is a snapshot of Carter's, Inc.'s key profitability metrics based on the 2024 fiscal year data:

These figures are indicative of Carter's ability to maintain reasonable profitability amidst various market conditions. Further analysis would involve comparing these values against historical data and industry benchmarks to ascertain the company's competitive positioning and long-term financial health.

For more insights into Carter's, Inc. and its investors, check out: Exploring Carter's, Inc. (CRI) Investor Profile: Who’s Buying and Why?

Carter's, Inc. (CRI) Debt vs. Equity Structure

Analyzing how Carter's, Inc. (CRI) manages its debt and equity is crucial for understanding its financial strategy and risk profile. This involves looking at the levels of debt, key ratios like debt-to-equity, and any recent financing activities.

As of the fiscal year 2024, Carter's, Inc. (CRI) exhibited the following debt structure:

• Long-term Debt: Carter's total long-term debt stood at $475.8 million.
• Short-term Debt: The company's short-term debt or current portion of long-term debt was $3.2 million.

The debt-to-equity ratio is a vital metric for assessing a company's financial leverage. As of the most recent data, Carter's debt-to-equity ratio is approximately 1.41. This ratio indicates the proportion of debt and equity Carter's uses to finance its assets. A ratio of 1.41 suggests that Carter's uses $1.41 of debt for every $1 of equity.

Here's a breakdown of Carter's, Inc. (CRI) debt and equity components:

Monitoring Carter's financing activities, such as debt issuances and refinancing, provides insights into its capital management strategy. For instance, in February 2024, Carter's redeemed $150 million aggregate principal amount of its 3.75% senior notes due 2027. The company funded the redemption with cash on hand and borrowings under its revolving credit facility. Additionally, Carter’s maintains strong relationships with credit rating agencies, which provide ratings on their debt. These ratings reflect the agency’s assessment of Carter’s ability to meet its financial obligations.

Carter's, Inc. (CRI) strategically balances debt and equity to fund its operations and growth initiatives. While debt can provide financial leverage and potential tax benefits, equity funding can offer stability and flexibility. The company’s approach to balancing these two funding sources impacts its financial risk and return profile. Want to know more about Carter's, Inc. (CRI)? Check this out: Exploring Carter's, Inc. (CRI) Investor Profile: Who’s Buying and Why?

Carter's, Inc. (CRI) Liquidity and Solvency

Assessing the liquidity of Carter's, Inc. (CRI) involves examining several key financial metrics and trends. These include the current and quick ratios, working capital trends, and cash flow statements. A thorough analysis of these elements provides insights into the company's ability to meet its short-term obligations and overall financial health.

The current ratio, a fundamental liquidity metric, is calculated by dividing current assets by current liabilities. For Carter's, Inc., the current ratio as of December 30, 2023, was approximately 1.81. This indicates that Carter's had $1.81 in current assets for every $1 of current liabilities. A ratio above 1 generally suggests good liquidity. The quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventories from current assets. As of December 30, 2023, Carter's quick ratio stood at approximately 0.82. This lower value compared to the current ratio is due to the exclusion of inventories, implying that the company might rely on inventory to meet its short-term liabilities.

Analyzing working capital trends offers additional perspective. Working capital, calculated as current assets minus current liabilities, reflects the company's operational liquidity. Monitoring the changes in working capital over time can reveal whether the company's short-term financial health is improving or deteriorating. Here's a snapshot of Carter's working capital position:

From December 31, 2022, to December 30, 2023, Carter's working capital increased by approximately $63 million. This increase suggests an improvement in the company's short-term liquidity position.

Cash flow statements provide a comprehensive view of all cash inflows and outflows. These statements are divided into three main categories:

• Operating Activities: Cash generated from the company's core business operations.
• Investing Activities: Cash flow related to the purchase and sale of long-term assets.
• Financing Activities: Cash flow related to debt, equity, and dividends.

Here’s an overview of Carter's cash flow trends:

In 2023, Carter's saw an increase in net cash from operating activities, rising from $298.9 million to $389.9 million. This indicates improved efficiency in generating cash from its business operations. Investing activities used slightly less cash in 2023 compared to 2022, while financing activities used more cash, primarily due to increased debt repayments or share repurchases.

Overall, Carter's, Inc. exhibits a stable liquidity position. The current and quick ratios suggest an adequate ability to cover short-term liabilities. The increase in working capital and improved cash flow from operating activities further reinforce this assessment. However, investors should continue to monitor these metrics to ensure the company maintains its financial health. Explore more about Carter's, Inc. (CRI) investor profile: Exploring Carter's, Inc. (CRI) Investor Profile: Who’s Buying and Why?

Carter's, Inc. (CRI) Valuation Analysis

Determining whether Carter's, Inc. (CRI) is overvalued or undervalued involves analyzing several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios (if applicable), and analyst consensus.

Here's a breakdown of these elements:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company’s stock price to its earnings per share (EPS). A lower P/E ratio might suggest undervaluation, while a higher ratio could indicate overvaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: This ratio compares the company’s market capitalization to its book value of equity. A P/B ratio below 1.0 could suggest the stock is undervalued, while a higher ratio may indicate overvaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the company’s enterprise value (market cap plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization. It provides a more comprehensive valuation measure, especially when comparing companies with different capital structures.

Analyzing Carter's, Inc.'s (CRI) stock price trends over the last 12 months (or longer) provides insight into market sentiment and company performance. A consistent upward trend may reflect investor confidence, while a downward trend could signal concerns about the company's future prospects.

For investors interested in further understanding the composition of Carter's, Inc.'s (CRI) investors, this resource offers valuable insights: Exploring Carter's, Inc. (CRI) Investor Profile: Who’s Buying and Why?

Based on the fiscal year 2024 data, Carter's, Inc. (CRI) demonstrates the following financial metrics:

Carter's, Inc. (CRI) offers a dividend yield of 3.1% with a payout ratio of 35%. A sustainable payout ratio indicates the company's ability to maintain dividend payments.

Analyst consensus on Carter's, Inc. (CRI) stock valuation typically includes ratings such as buy, hold, or sell. These ratings represent the collective opinion of financial analysts regarding the stock's potential for appreciation or depreciation. As of a recent review, the consensus leans towards a 'hold' rating, suggesting that analysts believe the stock is fairly valued at its current price.

Carter's, Inc. (CRI) Risk Factors

Carter's, Inc. (CRI) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors assessing the company's stability and future prospects. For further insights, you might find this resource helpful: Breaking Down Carter's, Inc. (CRI) Financial Health: Key Insights for Investors.

One of the primary external risks is intense industry competition. The children's apparel market is highly fragmented, with numerous players ranging from large multinational corporations to smaller, specialized brands. This competitive landscape can pressure Carter's, Inc. (CRI)'s pricing and market share, affecting revenue and profitability. Changes in regulatory requirements, such as those related to product safety, trade, or labor practices, also pose a risk. Compliance with these regulations can increase operational costs and necessitate changes in business practices. Shifts in market conditions, including economic downturns or changes in consumer spending habits, can reduce demand for the company's products, impacting sales and earnings.

Recent earnings reports and filings highlight several operational, financial, and strategic risks. Operational risks include potential disruptions in the supply chain, which can result from geopolitical instability, natural disasters, or other unforeseen events. For example, delays in sourcing raw materials or manufacturing products can lead to inventory shortages and lost sales. Financial risks encompass fluctuations in currency exchange rates, which can affect the company's international sales and profitability. Changes in interest rates can also impact borrowing costs and overall financial performance. Strategic risks involve challenges related to the company's ability to adapt to changing consumer preferences and market trends. Failure to innovate and introduce new products or effectively market existing ones can lead to a decline in market share.

Carter's, Inc. (CRI) employs several mitigation strategies to address these risks. To mitigate supply chain disruptions, the company diversifies its sourcing and manufacturing base, reducing reliance on any single supplier or region. They also maintain safety stock levels of key products to buffer against potential delays. To manage financial risks, Carter's, Inc. (CRI) uses hedging strategies to mitigate the impact of currency fluctuations and closely monitors interest rate movements to optimize its borrowing costs. Regarding strategic risks, the company invests in market research and product development to stay ahead of consumer trends and maintain a competitive product portfolio. They also employ robust marketing and promotional strategies to drive sales and maintain brand awareness.

Carter's, Inc. (CRI) Growth Opportunities

Carter's, Inc. (CRI) faces a dynamic landscape of growth opportunities driven by product innovation, market expansion, strategic initiatives, and competitive advantages. The company's ability to capitalize on these factors will be crucial for future revenue and earnings growth.

Key growth drivers for Carter's, Inc. (CRI) include:

• Product Innovation: Continuously introducing new products and designs to meet evolving customer preferences and trends in the children's apparel market.
• Market Expansion: Expanding its presence in existing markets and entering new geographic regions to reach a broader customer base.
• Acquisitions: Pursuing strategic acquisitions to expand its brand portfolio and market share.

Future revenue growth projections and earnings estimates for Carter's, Inc. (CRI) depend on several factors, including the overall economic climate, consumer spending patterns, and the company's ability to execute its growth strategies. While specific projections vary among analysts, the consensus generally points toward continued, albeit moderate, growth in the coming years.

Strategic initiatives and partnerships that may drive future growth include:

• E-commerce Development: Enhancing its online platform and digital marketing efforts to drive online sales growth.
• Retail Optimization: Optimizing its retail store footprint and improving the customer experience in its stores.
• Strategic Partnerships: Collaborating with other companies to expand its reach and offer complementary products and services.

Carter's, Inc. (CRI) possesses several competitive advantages that position it for growth:

• Brand Recognition: Strong brand recognition and reputation for quality and value in the children's apparel market.
• Scale and Distribution: Extensive scale and distribution network, including its own retail stores, wholesale partners, and e-commerce platform.
• Product Diversification: Diversified product portfolio across multiple categories, including baby, toddler, and kids' apparel.

Here's a look at some key financial data for Carter's, Inc. (CRI) based on its 2024 fiscal year:

These figures reflect the company's financial performance and provide a basis for assessing its growth potential.

For more insights into the investors of Carter's, Inc. (CRI), check out this link: Exploring Carter's, Inc. (CRI) Investor Profile: Who’s Buying and Why?