Investing.com -- Carter’s on Wednesday reported first-quarter earnings and revenue that exceeded analyst expectations, pushing its shares higher by more than 2% in premarket trading.

The marketer of young children’s apparel posted earnings per share (EPS) of $0.39, comfortably beating analyst estimates of $0.11, as revenue came in at $681 million against a consensus estimate of $658.76 million.

U.S. retail comparable sales grew 10.5%, marking the fourth consecutive quarter of growth.

Adjusted operating margin, however, narrowed to 4.2% from 5.6% in the same period a year ago, pressured by incremental tariff costs and inflationary store-related expenses, partially offset by higher pricing, favorable channel mix, and cost savings.

“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 F. Westenberger, interim CEO and President, CFO and COO.

“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," he added.

Carter’s announced last week that Sharon Price John will join as Chief Executive Officer next month.

For fiscal year 2026, the company projected low single-digit to mid-single-digit percentage growth in both net sales and adjusted operating income. Adjusted diluted earnings per share are expected to decline by a low double-digit to mid-teens percentage, reflecting ongoing tariff headwinds.

The company guided operating cash flow of $110 million to $120 million and capital expenditures of $55 million.