Carter's Q2 Earnings Surge on $128M Tariff Refund; New CEO Takes Helm
CRI sits 63% above its 52-week low of $23.381.
Summary
Carter's Q2 GAAP EPS of $2.87 included a $128M tariff refund windfall. Adjusted EPS of $0.26 beat expectations on 5% sales growth and strong comparable sales. New CEO Sharon Price John started in June.
Key Events · Earnings and Guidance · CRI
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Q2 GAAP EPS $2.87, Adjusted EPS $0.26
Net income of $105M included a $128M IEEPA tariff refund recovery ($100M after-tax). Excluding this and other items, adjusted net income was $9.4M, or $0.26 per share, up 53% from $0.17 a year ago.
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Revenue Up 5.2% to $615.5M
Consolidated net sales rose 5.2% year-over-year, with U.S. Retail comparable sales up 5.1%—the fifth consecutive quarter of growth. U.S. Wholesale surged 11.7% on earlier Fall demand and core brand strength.
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$132M Tariff Refund Received
The company received $132M in refunds of previously paid IEEPA tariffs, including $4M in interest. $128M was recorded as a reduction of cost of goods sold, dramatically boosting gross margin to 67% from 48.1%.
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New CEO Sharon Price John Appointed
Sharon Price John became CEO and President on June 15, 2026, replacing Douglas Palladini who departed April 28. She was granted restricted stock awards valued at $41.80 per share on the grant date.
Analysis · CRI · Manufacturing
A one-time $128 million IEEPA tariff refund drove Carter's headline $2.87 EPS, but the underlying business also delivered. Adjusted EPS of $0.26 topped last year's $0.17 by over 50%, fueled by 5% sales growth and a fifth consecutive quarter of positive comparable sales. The balance sheet now holds $654 million in cash after the refund, and the company carries no borrowings on its credit line. New CEO Sharon Price John started June 15, inheriting strong momentum yet facing fresh tariff uncertainty—new Section 301 tariffs took effect July 24. Investors should distinguish the windfall from the core earnings power, which remains healthy.
At the time of this filing, CRI was trading at $38.03 on NYSE in the Manufacturing sector, with a market capitalization of approximately $1.4B. The 52-week trading range was $23.38 to $44.44. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.