Carter's (CRI) Tops Q1 EPS by 11c, Guides Q2 Below Views

Carter's (NYSE: CRI) reported Q1 EPS of $1.09, $0.11 better than the analyst estimate of $0.98. Revenue for the quarter came in at $756 million versus the consensus estimate of $745.05 million.

GUIDANCE:

Carter's sees Q2 2018 EPS of $0.79, versus the consensus of $0.95. Carter's sees Q2 2018 revenue of $680 million, versus the consensus of $738.24 million.

2018 Business Outlook

For the second quarter of fiscal 2018, the Company projects net sales to be approximately $680 million and adjusted diluted earnings per share to be approximately $0.53 compared to adjusted diluted earnings per share of $0.79 in the second quarter of fiscal 2017. Net sales and adjusted earnings in the second quarter of fiscal 2018 are expected to be affected by: 1) discontinued sales to Toys “R” Us; 2) the earlier Easter holiday, which shifted holiday-related demand into the Company’s first quarter of 2018; and 3) slower sales trends due to unseasonably cold weather.

For fiscal 2018, the Company projects net sales to increase approximately 3% compared to fiscal 2017 and adjusted diluted earnings per share to increase approximately 12% compared to adjusted diluted earnings per share of $5.77 in fiscal 2017. Forecasted net sales and adjusted earnings for fiscal 2018 assume: 1) the Company recaptures approximately half of the lost sales previously planned to Toys “R” Us; 2) a reduction in discretionary spending from originally planned levels; and 3) an estimated effective tax rate of approximately 22%. This adjusted earnings forecast excludes the unusual charge of approximately $12.8 million related to the Toys “R” Us bankruptcy and a benefit of approximately $0.4 million related to an insurance recovery associated with unusual storm-related store closures, both of which were recorded in the first quarter of fiscal 2018.

The Company believes these non-GAAP measurements provide investors with a meaningful view of the Company’s core operating results, and are the same measurements used by the Company's executive management to assess the Company's performance.

For earnings history and earnings-related data on Carter's (CRI) click here.

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