Carter's, Inc. (CRI) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Carter's, Inc. (CRI) Consumer Business Overview

Carter's, Inc. is a leading branded childrenswear retailer operating through U.S. Retail, U.S. Wholesale, and International segments. With a diverse portfolio including Carter's, OshKosh, and Skip Hop, the company leverages a multi-channel distribution network and a strong brand reputation to maintain its market presence in the competitive apparel retail sector.

What Is the Investment Thesis for CRI?

Carter's, Inc. presents a compelling investment case based on its established brand portfolio and extensive distribution network. With a P/E ratio of 17.0 and a dividend yield of 2.83%, the company offers a blend of value and income. Key value drivers include the continued expansion of its e-commerce channels and the growth of its international segment. Upcoming catalysts include potential strategic partnerships to expand its brand presence. Potential risks include fluctuating consumer spending and increasing competition from other apparel retailers. The company's ability to maintain its profit margin of 3.1% and gross margin of 44.7% will be crucial for sustained profitability.

Based on FMP financials and quantitative analysis

CRI Key Highlights

• Market Cap of $1.39B reflects Carter's established position in the childrenswear market.
• P/E Ratio of 17.0 indicates a potentially undervalued stock compared to industry peers.
• Profit Margin of 3.1% demonstrates the company's ability to generate profit from its revenue.
• Gross Margin of 44.7% showcases effective cost management in sourcing and production.
• Dividend Yield of 2.83% provides an attractive income stream for investors.

Who Are CRI's Competitors?

CRI is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are CRI's Key Strengths?

• Strong brand recognition and customer loyalty.
• Extensive distribution network across multiple channels.
• Diverse product portfolio catering to a wide range of customer needs.
• Established relationships with wholesale partners and international licensees.

What Are CRI's Weaknesses?

• Reliance on the childrenswear market, which can be affected by economic conditions.
• Exposure to fluctuating consumer spending patterns.
• Dependence on wholesale partners for a significant portion of revenue.
• Potential for supply chain disruptions and increased sourcing costs.

What Could Drive CRI Stock Higher?

• Potential strategic partnerships to expand brand presence.
• Continued expansion of e-commerce channels.
• Growth of the international segment.

What Are the Key Risks for CRI?

• Fluctuating consumer spending patterns.
• Increasing competition from other apparel retailers.
• Supply chain disruptions and increased sourcing costs.

What Are the Growth Opportunities for CRI?

• E-commerce Expansion: Carter's can further enhance its e-commerce presence by investing in digital marketing, improving website functionality, and offering personalized shopping experiences. This includes optimizing mobile commerce and leveraging social media platforms to drive traffic and conversions.
• International Market Penetration: Expanding into new international markets, particularly in Asia and Latin America, offers significant growth potential. These regions have a growing middle class and increasing demand for branded childrenswear. Carter's can leverage its existing brand recognition and adapt its product offerings to suit local preferences. Strategic partnerships with local retailers and distributors can facilitate market entry and accelerate growth.
• Product Innovation: Introducing new product lines and innovative designs can attract new customers and drive sales growth. This includes developing sustainable and eco-friendly products, as well as incorporating technological advancements into its apparel. By staying ahead of fashion trends and consumer preferences, Carter's can maintain its competitive edge and capture a larger share of the market. Focus on unique designs and collaborations can also enhance brand appeal.
• Wholesale Channel Optimization: Strengthening relationships with wholesale partners and expanding its presence in department stores and national chain stores can drive revenue growth. This includes offering exclusive product lines and providing marketing support to its wholesale partners. By optimizing its wholesale channel, Carter's can reach a broader customer base and increase brand visibility. Improving supply chain efficiency and inventory management can also enhance profitability in this segment.
• Brand Portfolio Expansion: Acquiring or developing new brands that complement its existing portfolio can diversify its revenue streams and reduce its reliance on a single brand. This includes targeting niche markets and expanding into adjacent product categories, such as accessories and footwear. By expanding its brand portfolio, Carter's can cater to a wider range of customer needs and increase its overall market share. This strategy can also mitigate risks associated with changing consumer preferences and market trends.

What Opportunities Does CRI Have?

• Expansion into new international markets.
• Growth of e-commerce channels and online sales.
• Introduction of new product lines and innovative designs.
• Strategic partnerships and acquisitions to expand brand portfolio.

What Threats Does CRI Face?

• Increasing competition from other apparel retailers and specialty brands.
• Changing consumer preferences and fashion trends.
• Economic downturns and reduced consumer spending.
• Potential for counterfeit products and brand dilution.

What Are CRI's Competitive Advantages?

• Strong brand recognition and reputation.
• Extensive distribution network across multiple channels.
• Diverse product portfolio catering to a wide range of customer needs.
• Established relationships with wholesale partners and international licensees.

What Does CRI Do?

Founded in 1865, Carter's, Inc. has evolved into a prominent designer, sourcer, and marketer of branded childrenswear. Headquartered in Atlanta, Georgia, the company operates through three primary segments: U.S. Retail, U.S. Wholesale, and International. Carter's core product lines include a wide range of apparel for babies and young children, such as bodysuits, pants, dresses, and sleepwear, marketed under the Carter's brand. The OshKosh brand focuses on playclothes, particularly denim apparel. Additionally, the Skip Hop brand offers products for playtime, mealtime, and baby care. Carter's distributes its products through multiple channels, including its own retail stores (980 as of December 31, 2021), wholesale partners (18,800 locations), and e-commerce platforms like carters.com, oshkoshbgosh.com and skiphop.com. The company's extensive brand portfolio and multi-channel strategy enable it to cater to a broad customer base and maintain a strong foothold in the childrenswear market.

What Products and Services Does CRI Offer?

• Designs and markets branded childrenswear.
• Operates through U.S. Retail, U.S. Wholesale, and International segments.
• Offers a wide range of products including bodysuits, pants, dresses, and sleepwear.
• Markets products under brands like Carter's, OshKosh, and Skip Hop.
• Distributes products through retail stores, wholesale partners, and e-commerce platforms.
• Provides products for playtime, mealtime, and baby care under the Skip Hop brand.
• Sells products through its eCommerce websites, such as carters.com, oshkoshbgosh.com, oshkosh.com, and skiphop.com.

How Does CRI Make Money?

• Designs and sources childrenswear products.
• Sells products through its own retail stores and e-commerce platforms.
• Distributes products through wholesale partners, including department stores and national chain stores.
• Licenses its brands to international partners for distribution in specific regions.

What Industry Does CRI Operate In?

Carter's, Inc. operates within the competitive apparel retail industry, which is influenced by consumer spending patterns, fashion trends, and economic conditions. The childrenswear market is characterized by consistent demand, driven by birth rates and parental spending habits. The industry is witnessing a shift towards online retail, with e-commerce platforms gaining market share. Carter's competes with other major apparel retailers and specialty childrenswear brands, emphasizing brand recognition and product quality to maintain its market position. The company's multi-channel distribution strategy helps it reach a broad customer base and adapt to changing consumer preferences.

Who Are CRI's Key Customers?

• Parents of infants and young children.
• Gift-givers looking for childrenswear.
• Wholesale partners, including department stores and national chain stores.
• International distributors and licensees.

Company Profile

Carter's, Inc. operates in the Specialty Retail industry within the Consumer Cyclical sector. It is headquartered in Atlanta, US. The company is led by CEO Douglas C. Palladini. CRI has traded publicly since 2003.

How Carter's, Inc. Is Valued

Carter's, Inc. carries a market capitalization of $1.39B, placing it in the small-cap category. Relative to its peer group, CRI's quantitative score of 65/100 is above the peer average of 46/100.

ROE 10%Key Financial Metrics

Return on equity for Carter's, Inc. stands at 10.1%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 3.6%, showing how much profit it generates from its asset base. CRI trades at a trailing price-to-earnings ratio of 16.95, below the Consumer Cyclical sector average of ~37x. Its free cash flow yield is 8.0%, a gauge of the cash the business throws off relative to its market value. A current ratio of 2.80 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 5.9%, the inverse of the P/E and a quick read on earnings relative to price.

F-Score 5/9Financial Health

Carter's, Inc.'s Piotroski F-Score is 5/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 2.83 places it in the grey zone, a middle ground that warrants monitoring.

FY2027 estForward Outlook

Wall Street analysts project Carter's, Inc. revenue of about $3.02B for fiscal 2027, with EPS near $3.26. The estimate reflects 4 contributing analysts.

Net buyingInsider Activity

Over the past six months, Carter's, Inc. insiders filed 29 SEC Form 4 transactions — 8 sales and 21 purchases. On net that is roughly 236K shares acquired (about $504K) — insiders putting money in tends to read as conviction.

CRI Financials

CRI Latest News

CRI Analyst Consensus

CRI MoonshotScore

CRI Consumer Cyclical Stock FAQ

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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