Carter’s (CRI) CRI Q3 Financial Results Summary
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Carter’s, Inc. (CRI) Q3 2025 Financial Results Summary
Release Date: October 27, 2025
Carter’s, Inc. (NYSE: CRI), North America’s leading apparel company for babies and young children, announced its financial results for the third quarter of fiscal 2025. Here’s a summary of the key metrics and performance indicators:
Financial Performance Highlights
- Net Sales:
- Total net sales were $758 million, virtually unchanged from $758.5 million in Q3 2024 (decrease of 0.1%).
- U.S. Retail net sales grew by 2.6%, while International segment sales increased by 4.9%.
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U.S. Wholesale segment sales decreased by 5.1%.
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Diluted Earnings per Share (EPS):
- Reported diluted EPS was $0.32, down from $1.62 in Q3 2024 (decrease of 80%).
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Adjusted diluted EPS was $0.74, compared to $1.64 in Q3 2024 (decrease of 54.9%).
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Net Income:
- Net income for the quarter was $11.6 million, compared to $58.3 million in the same period last year (decrease of 80%).
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Adjusted net income was $26.8 million, down from $59 million in Q3 2024 (decrease of 54.5%).
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Operating Income:
- Operating income decreased significantly by 62.2%, totaling $29.1 million, compared to $77 million in Q3 2024.
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Adjusted operating income decreased by 48.9% to $39.4 million.
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Operating Margin:
- Reported operating margin decreased to 3.8% from 10.2% in the prior year.
- Adjusted operating margin dropped to 5.2%, down from 10.2% in Q3 2024.
Shareholder Returns
- Dividends:
- The Company declared a cash dividend of $0.25 per share for the third quarter, totaling $9.1 million for Q3.
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Total dividends paid in the first three quarters of fiscal 2025 amounted to $47.2 million.
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Share Repurchases:
- No shares were repurchased in the fiscal year 2025 to date.
Productivity Improvement Actions
- The Company is implementing several key initiatives aimed at improving productivity:
- Organizational Restructuring: The plan includes reducing approximately 300 positions, leading to projected annual savings of around $35 million starting in 2026.
- Other Cost Reductions: Targeting over $10 million in annual spending reductions across various categories.
- Store Closures: Increasing the planned closure of stores from 100 to approximately 150 over the next three years to enhance profitability.
Financial Summary (Q3 2025 vs. Q3 2024)
- Revenue:
- Total Net Sales:
- Q3 2025: $758 million
- Q3 2024: $758.5 million
- Net Income:
- Q3 2025: $11.6 million
- Q3 2024: $58.3 million
- Diluted EPS:
- Q3 2025: $0.32
- Q3 2024: $1.62
Future Outlook & Market Challenges
- Carter’s management highlighted that increased product costs, particularly from higher tariffs, have significantly impacted profitability.
- The Company is also suspending fiscal 2025 guidance due to the uncertainty surrounding additional tariffs.
- Carter’s plans to continue prioritizing productivity and efficiency in its operations while ensuring its multi-channel business model remains robust.
Conclusion: Carter’s reported challenging financial results in Q3 2025 primarily driven by reduced income and adjustments resulting from structural changes and market pressures. The Company remains focused on restructuring and productivity initiatives to support long-term growth and profitability.
| Description | Fiscal Quarter Ended | Three Fiscal Quarters Ended | |
|---|---|---|---|
| September 27, 2025 | September 28, 2024 | September 27, 2025 | |
| Net sales | $757,836 | $758,464 | $1,972,975 |
| Cost of goods sold | 416,208 | 402,450 | 1,058,497 |
| Gross profit | 341,628 | 356,014 | 914,478 |
| Royalty income, net | 5,428 | 5,740 | 14,008 |
| Selling, general, and administrative expenses | 317,963 | 284,714 | 869,246 |
| Operating income | 29,093 | 77,040 | 59,240 |
| Interest expense | 7,173 | 7,381 | 22,849 |
| Interest income | -2,573 | -2,370 | -10,007 |
| Other expense (income), net(*) | 882 | 350 | -265 |
| Pension plan settlement(*) | 8,777 | 949 | 8,777 |
| Income before income taxes | 14,834 | 70,730 | 37,886 |
| Income tax provision | 3,241 | 12,410 | 10,308 |
| Net income | $11,593 | $58,320 | $27,578 |
| Basic net income per common share | $0.32 | $1.62 | $0.75 |
| Diluted net income per common share | $0.32 | $1.62 | $0.75 |
| Dividend declared and paid per common share | $0.25 | $0.80 | $1.30 |
(*) Pension plan settlement charges for the fiscal quarter and three fiscal quarters ended September 28, 2024 have been reclassified to the Pension plan settlement line item. These charges were previously included in Other expense (income), net.
| Description | September 27, 2025 | December 28, 2024 | September 28, 2024 |
|---|---|---|---|
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | $184,190 | $412,926 | $175,536 |
| Accounts receivable, net of allowance | 237,866 | 194,834 | 247,013 |
| Finished goods inventories | 656,149 | 502,332 | 607,384 |
| Prepaid expenses and other current assets | 55,576 | 32,580 | 41,577 |
| Total current assets | 1,133,781 | 1,142,672 | 1,071,510 |
| Property, plant, and equipment, net | 189,012 | 180,956 | 182,292 |
| Operating lease assets | 611,569 | 577,133 | 560,246 |
| Tradenames, net | 268,718 | 268,008 | 298,053 |
| Goodwill | 208,351 | 206,875 | 209,384 |
| Customer relationships, net | 20,993 | 23,543 | 24,440 |
| Other assets | 37,015 | 33,980 | 32,460 |
| Total assets | $2,469,439 | $2,433,167 | $2,378,385 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Current liabilities: | |||
| Accounts payable | $240,235 | $248,200 | $273,909 |
| Current operating lease liabilities | 150,548 | 130,564 | 130,140 |
| Other current liabilities | 110,907 | 130,052 | 80,059 |
| Total current liabilities | 501,690 | 508,816 | 484,108 |
| Long-term debt, net | 498,738 | 498,127 | 497,930 |
| Deferred income taxes | 41,200 | 38,210 | 48,890 |
| Long-term operating lease liabilities | 529,139 | 501,503 | 485,613 |
| Other long-term liabilities | 34,030 | 31,949 | 32,504 |
| Total liabilities | $1,604,797 | $1,578,605 | $1,549,045 |
| Commitments and contingencies | |||
| Shareholders’ equity: | |||
| Preferred stock; par value $0.01 per share | $— | $— | $— |
| Common stock, voting; par value $0.01 per share | 365 | 360 | 360 |
| Additional paid-in capital | 18,029 | 3,856 | — |
| Accumulated other comprehensive loss | -28,107 | -43,678 | -32,361 |
| Retained earnings | 874,355 | 894,024 | 861,341 |
| Total shareholders’ equity | 864,642 | 854,562 | 829,340 |
| Total liabilities and shareholders’ equity | $2,469,439 | $2,433,167 | $2,378,385 |