Carter’s (CRI) rises after first-quarter earnings and revenue top expectations

Carter’s (NYSE:CRI) moved higher in premarket trading on Wednesday after the children’s clothing company reported first-quarter earnings and revenue ahead of Wall Street expectations.

Shares gained more than 2% following the release.

The company posted earnings per share of $0.39, well above analyst forecasts of $0.11.

Revenue totaled $681 million, exceeding consensus estimates of $658.76 million.

Comparable sales in Carter’s U.S. retail business increased 10.5% during the quarter, marking the company’s fourth consecutive quarter of comparable sales growth.

The company said demand remained strong across its U.S. retail, wholesale and international operations.

“We saw strong demand for our brands during the first quarter across each of our U.S. Retail, U.S. Wholesale and International channels,” said Richard Westenberger, interim chief executive officer, president, chief financial officer and chief operating officer of the company.

Adjusted operating margin declined to 4.2% from 5.6% in the same period last year.

Carter’s said profitability was negatively affected by higher tariff costs, inflation-related store expenses, increased investment spending and higher interest costs.

Those pressures were partly offset by higher pricing, favorable sales mix and cost-saving initiatives.

“Our profitability in the quarter was negatively affected by higher tariffs, investment spending and other inflationary cost pressures and higher interest costs. We expect the impact of these items to moderate as we move through the year and today we have reiterated our full year outlook for both sales and operating profit growth in 2026,” Westenberger added.

The company also noted that Sharon Price John is scheduled to join Carter’s as chief executive officer next month.

For fiscal 2026, Carter’s continues to expect low single-digit to mid-single-digit percentage growth in both net sales and adjusted operating income.

Adjusted diluted earnings per share are still projected to decline by a low double-digit to mid-teens percentage due to continued tariff-related headwinds.

The company also forecast operating cash flow between $110 million and $120 million, alongside capital expenditures of approximately $55 million.