Carter's net sales improve 6 percent in Q1
Carter’s, in the first quarter of fiscal 2015 increased consolidated net sales by 33.1 million dollars, or 5.1 percent, to 684.8 million dollars, driven by growth in the company's US Carter's and OshKosh direct-to-consumer businesses. Changes in foreign currency exchange rates negatively impacted consolidated net sales by 5.6 million dollars, or 0.9 percent. On a constant currency basis, consolidated net sales increased 6 percent in the first quarter of fiscal 2015.
“We’re off to a good start this year with a very positive response to our Spring product offerings. Despite the winter storms and West Coast port delays, we had good growth in first quarter sales and exceptional growth in earnings driven by leveraging our operating expenses,” said Michael D. Casey, Chairman and Chief Executive Officer.
Operating income increased 23 million dollars, or 37.3 percent, to 84.5 million dollars, compared to 61.5 million dollars. Operating margin in the first quarter of fiscal 2015 increased 290 basis points to 12.3 percent, compared to 9.4 percent in the first quarter of fiscal 2014. Adjusted operating income increased 17.2 million dollars, or 24.5 percent, to 87.3 million dollars. Adjusted operating margin increased 190 basis points to 12.7 percent.
Carter’s retail segment sales increased 11.9 percent to 257.7 million dollars and direct-to-consumer comparable sales increased 0.7 percent, comprised of eCommerce comparable sales growth of 8.1 percent, partially offset by a retail stores comparable sales decline of 1.2 percent. The company opened 20 Carter’s retail stores in the United States and closed two during the quarter. The Company operated 549 Carter’s retail stores in the United States as of April 4, 2015. Carter’s wholesale segment sales decreased 0.9 percent.
OshKosh retail segment sales increased 14.9 percent and direct-to-consumer comparable sales increased 5.2 percent, comprised of eCommerce comparable sales growth of 20.3 percent and a retail stores comparable sales increase of 1.5 percent. In the first quarter of fiscal 2015, the company opened nine OshKosh retail stores in the United States and closed one and operated 208 OshKosh retail stores in the United States as of April 4, 2015. OshKosh wholesale segment sales increased 3 percent.
International segment sales decreased 2.7 percent reflecting growth in the company's retail store and eCommerce businesses in Canada which was more than offset by the company's exit of retail operations in Japan in fiscal 2014, the impact of the Target Canada bankruptcy in January 2015, and the impact of foreign currency exchange rates. The company's former retail operations in Japan contributed 4.4 million dollars to segment sales in the first quarter of fiscal 2014. In the first quarter of fiscal 2015, the Company opened three retail stores in Canada. The company operated 127 retail stores in Canada as of April 4, 2015.
For the second quarter of fiscal 2015, the company projects net sales to increase approximately 6 percent over the second quarter of fiscal 2014 and adjusted diluted earnings per share to be comparable to adjusted diluted earnings per share of 0.61 dollars in the second quarter of fiscal 2014. For fiscal 2015, the company projects net sales to increase approximately 5 percent over fiscal 2014 and adjusted diluted earnings per share to increase approximately 10 percent to 14 percent.