Carter's
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Carter's (CRI) investor relations material

Carter's Q4 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q4 2025 earnings summary27 Feb, 2026

Executive summary

  • Q4 net sales rose 8% year-over-year to $925 million, with all business segments growing and momentum in product and demand initiatives; the extra week in fiscal 2025 contributed $37 million to net sales.

  • Fiscal 2025 net sales increased 2% to $2.9 billion, driven by U.S. Retail and International growth, partially offset by U.S. Wholesale decline.

  • Operating income and margins declined due to higher tariffs, increased product costs, investments, and restructuring, despite higher pricing and productivity initiatives.

  • Leadership transition, significant transformation initiatives, and organizational restructuring were executed during the year.

  • New consumer acquisition, especially among Gen Z and millennial families, is driving higher lifetime value and increased sales of higher-priced products.

Financial highlights

  • Q4 adjusted operating income was $89 million (margin nearly 10%), and adjusted EPS was $1.90, down from $2.39 last year; Q4 adjusted EBITDA was $105 million, down 18% year-over-year.

  • FY25 adjusted operating margin was 6.1% (down from 10.1%); adjusted EBITDA was $232 million, down 32% year-over-year.

  • Q4 gross margin was 43.2%, down 460 basis points year-over-year, mainly due to tariffs and higher product costs.

  • Operating cash flow for FY25 was $122 million, down from $299 million in FY24; year-end liquidity over $1 billion, with $500 million cash and strong credit facility access.

  • FY25 dividend payments totaled $56 million; share repurchases $51 million.

Outlook and guidance

  • FY26 net sales expected to grow low to mid-single digits, with growth in all business segments; adjusted operating income also projected to grow low to mid-single digits.

  • Adjusted EPS expected to be down low double digits to mid-teens due to higher interest and tax rates; FY26 operating cash flow projected at $110–$120 million, capex at $55 million.

  • Q1 2026 net sales expected to rise mid-single digits; adjusted EPS guidance of $0.02–$0.08, down sharply from $0.66 in Q1 2025.

  • Guidance does not reflect potential impacts from recent U.S. Supreme Court and global tariff developments.

When will 2026 outlook reflect tariff benefits?
Explain 2026 EPS decline despite op income growth
How will productivity initiatives impact wholesale?
Quantify 2026 tariff offset by pricing
Detail H1 vs H2 2026 profitability drivers
Contribution of 'better/best' products to sales
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Frequently asked questions

Carter's, Inc. is the largest branded marketer in North America focused on apparel for babies and young children. The company owns several well-known brands, including Carter's, OshKosh B'gosh, Skip Hop, and Little Planet. Carter's sells a range of products such as clothing, accessories, footwear, and home décor for young children, primarily through its retail stores, e-commerce platforms, and various wholesale channels. Additionally, Carter's brands are available at major retailers like Walmart and Target, and online via platforms such as Amazon. Carter's is headquartered in Atlanta, Georgia, and its shares are traded on the NYSE.

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