Carter’s Q1 sales decline 0.8 percent

Carter’s first quarter net sales decreased by 0.8 percent, or by 6.1 million dollars, to 781.3 million dollars, reflecting growth in the company’s US wholesale and international segments, offset by lower sales in its US retail segment.

The company’s US wholesale and international net sales grew by 8 percent and 11 percent, respectively. Meanwhile, US retail net sales declined by 10 percent, reflecting comparison to first quarter of 2021 which benefited from government stimulus payments made to consumers in response to the pandemic; 113 fewer retail stores at the beginning of the quarter; and a later Easter holiday. US retail comparable sales declined by 7 percent.

p>“Our first quarter sales and earnings exceeded our expectations,” said Michael D. Casey, the company’s chairman and chief executive officer. He continued: “We are encouraged by the improving trend in births in the US which began last summer. We believe our leading position in the young children’s apparel market and unparalleled multi-channel business model will enable us to build on our strong performance last year and achieve our growth objectives for 2022.”

Review of Carter’s Q1 results

The company’s operating income decreased by 24.9 million dollars to 102.6 million dollars, compared to 127.5 million dollars in the first quarter of fiscal 2021. Operating margin decreased to 13.1 percent compared to 16.2 percent in the prior year period. Adjusted operating income decreased 25.9 million dollars to 102.6 million dollars, and adjusted operating margin was 13.1 percent compared to 16.3 percent in the prior year period.

Net income decreased by 18.3 million dollars to 67.9 million dollars or 1.66 dollars per diluted share, while adjusted net income decreased by 19.1 million dollars to 67.9 million dollars. Adjusted earnings per diluted share were 1.66 dollars compared to 1.98 dollars in the first quarter of fiscal 2021.

For the second quarter of fiscal 2022, the company projects net sales of approximately 750 million dollars to 775 million dollars, adjusted operating income of approximately 95 million dollars to 105 million dollars, and adjusted diluted earnings per share of approximately 1.60 dollars to 1.80 dollars.

For fiscal 2022, the company is reaffirming its prior guidance and continues to project a net sales increase of approximately 2 percent to 3 percent, with growth in all segments. It expects an adjusted operating income increase of approximately 4 percent to 6 percent, and an adjusted diluted earnings per share increase of approximately 12 percent to 14 percent.