Carter's Q2 Sales Rise 5%, Adjusted EPS Up 53%; Tariff Refund Boosts Cash
CRI sits 58% above its 52-week low of $23.381.
Summary
Carter's posted Q2 2026 net sales of $615 million, up 5% year-over-year, and adjusted diluted EPS of $0.26, a 53% increase. The company also received a $132 million tariff refund and updated its full-year guidance, projecting a high single-digit to low double-digit decline in adjusted EPS.
Key Events · Earnings and Guidance · CRI
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Q2 Sales and Earnings Beat
Net sales rose 5.2% to $615.5 million, with U.S. Retail comparable sales up 5.1%. Adjusted operating income grew 54% to $18.1 million, and adjusted diluted EPS increased 53% to $0.26.
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Tariff Refund Windfall
A recovery of $132 million ($100 million after-tax) in previously paid import duties and related interest significantly boosted reported GAAP net income to $105 million ($2.87 per share) and operating cash flow to $202 million in the first half.
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Full-Year Guidance Implies EPS Decline
The fiscal 2026 outlook projects 2-3% net sales growth but a high single-digit to low double-digit decline in adjusted diluted EPS, reflecting incremental tariff costs and investment spending.
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New CEO Commentary
New CEO Sharon Price John highlighted improved marketing, productivity initiatives, and progress in the Baby segment, while noting the opportunity to unlock value and drive profitable growth.
Analysis · CRI · Manufacturing
A solid second quarter saw Carter's deliver 5% sales growth and a 53% surge in adjusted earnings per share, fueled by robust U.S. retail comparable sales and productivity gains. The period also featured a one-time $132 million tariff refund that materially lifted reported profits and cash flow. Yet the full-year outlook points to a high single-digit to low double-digit decline in adjusted EPS, underscoring persistent tariff and investment headwinds. In her first public remarks, the new CEO signaled strategic continuity while acknowledging the need to unlock value.
At the time of this filing, CRI was trading at $37.00 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 neutral market sentiment and an importance score of 7 out of 10.