Price movement

Carter’s (CRI) has a market cap of $5.1 billion. It fell by 9.5% to close at $100.84 per share on July 27, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -8.9%, -0.55%, and 14.0%, respectively, on the same day. CRI is trading 7.0% below its 20-day moving average, 3.7% below its 50-day moving average, and 4.1% above its 200-day moving average.

How Did Carter’s Perform in 2Q16?

Related ETF and peers

The Vanguard Small-Cap ETF (VB) invests 0.18% of its holdings in Carter’s. The ETF tracks the CRSP US Small Cap Index. The market-cap-weighted index includes the bottom 2%–15% of the investable universe. The YTD price movement of VB was 9.9% on July 27.

The market caps of Carter’s competitors are as follows:

  • Target (TGT) — $45.0 billion
  • The Gap (GPS) — $10.1 billion
  • Kohl’s (KSS) — $7.5 billion

Performance of Carter’s in fiscal 2Q16

Carter’s reported fiscal 2Q16 net sales of $639.5 million, a rise of 4.4% over the net sales of $612.8 million in fiscal 2Q15. The company’s gross profit margin and operating income rose by 2.9% and 1.9%, respectively, between fiscals 2Q15 and 2Q16.

Its net income and EPS (earnings per share) rose to $36.2 million and $0.71, respectively, in fiscal 2Q16, compared with $36.1 million and $0.68, respectively, in fiscal 2Q15. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and adjusted EPS of $81.3 million and $0.72, respectively, in fiscal 2Q16, a fall of 1.8% and 1.4% from fiscal 2Q15.

Carter’s cash and cash equivalents fell by 46.2% and its finished goods inventories rose by 25.0% between fiscals 4Q15 and 2Q16. Its current ratio fell to 3.8x and its debt-to-equity ratio rose to 1.5x in fiscal 2Q16, compared with 4.3x and 1.3x, respectively, in fiscal 4Q15.


The company has made the following projections for fiscal 3Q16 and fiscal 2016:

Fiscal 2Q16

  • net sales growth: ~6% to 7%
  • adjusted EPS growth: ~6% to 10%

Fiscal 2016

  • net sales growth: ~5% to 6%
  • adjusted EPS growth: ~10%

In the next part, we’ll take a look at Gildan Activewear.

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