Carter's (CRI) Misses Q4 EPS by 8c, Offers Outlook

Carter's (NYSE: CRI) reported Q4 EPS of $2.81, $0.08 worse than the analyst estimate of $2.89. Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.1 billion.

2020 Business Outlook:

For fiscal 2020 (a 53 week fiscal year), the Company projects net sales will increase approximately 2% to 3% and adjusted diluted earnings per share will increase approximately 4% to 6% compared to adjusted diluted earnings per share of $6.46 in fiscal 2019. This forecast for fiscal 2020 adjusted diluted earnings per share excludes anticipated expenses of approximately $10 million to $12 million related to organizational restructurings. Such restructurings include streamlining the Company’s retail field organization, improving distribution center staffing models, and relocating and consolidating various functions into its Atlanta office.

For the first quarter of fiscal 2020, the Company projects net sales will be comparable to the first quarter of fiscal 2019 and adjusted diluted earnings per share will be approximately $0.60 compared to adjusted diluted earnings per share of $0.87 in the first quarter of fiscal 2019. This forecast for first quarter fiscal 2020 adjusted diluted earnings per share contemplates: 1) increased investments in information technology, new stores, and marketing, and 2) lower royalty income reflecting the conclusion of a licensing agreement. This forecast for first quarter fiscal 2020 adjusted diluted earnings per share excludes anticipated expenses of approximately $10 million to $12 million related to organizational restructurings.

The Company is closely monitoring the outbreak of a respiratory illness caused by a novel coronavirus that was first detected in Wuhan, China. The virus has affected several industries within China, including textile production and manufacturing. The Company plans to source approximately 15% of its products from China in 2020. Additionally, the Company’s suppliers throughout Asia source a significant amount of fabric from China. Travel restrictions delayed the return of factory workers following the recent conclusion of the Chinese New Year holiday. The Company’s suppliers have not yet determined, with certainty, the impact of production delays. Accordingly, the financial impact of any delayed receipts from China is not known at this time. The Company’s guidance for fiscal year 2020 and the first quarter of fiscal 2020 does not include any adjustments for potential effects of the coronavirus situation.

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.

You May Also Be Interested In

• Tuniu (TOUR) Reports Q1 EPS of RMB0.00 ; Offers Guidance
• PVH Corp. (PVH) Tops Q1 EPS by 19c, Offers Guidance
• Torrid Holdings Inc. (CURV) Tops Q1 EPS by 1c; offers guidance