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Carter’s Declares Dividend of $0.33 Per Share

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Price movement

Carter’s (CRI) has a market cap of $4.4 billion. It rose 0.48% to close at $88.09 per share on November 11, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 2.3%, 0.92%, and -0.06%, respectively, on the same day. CRI is trading 2.0% above its 20-day moving average, 2.1% below its 50-day moving average, and 10.3% below its 200-day moving average.

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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 12.0% on November 11. The market caps of Carter’s competitors are as follows:

  • Target (TGT) — $42.0 billion
  • The Gap (GPS) — $12.2 billion
  • Kohl’s (KSS) — $9.7 billion

Carter’s declares dividend

Carter’s has declared a quarterly dividend of $0.33 per share on its common stock. The dividend will be paid on December 2, 2016, to shareholders of record at the close of business on November 21, 2016.

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Performance of Carter’s in fiscal 3Q16

Carter’s reported fiscal 3Q16 net sales of $901.4 million, a rise of 6.1% over the net sales of $849.8 million in fiscal 3Q15. The company’s gross profit margin expanded by 80 basis points and its operating margin narrowed by 80 basis points between fiscal 3Q15 and fiscal 3Q16.

Its net income and EPS (earnings per share) rose to $80.8 million and $1.60, respectively, in fiscal 3Q16, compared with $79.3 million and $1.51, respectively, in fiscal 3Q15. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and adjusted EPS of $148.9 million and $1.61, respectively, in fiscal 3Q16, a rise of 2.3% and 5.9% over fiscal 3Q15.

Carter’s cash and cash equivalents fell 63.1%, and its finished goods inventories rose 17.6% between fiscal 4Q15 and fiscal 3Q16. Its current ratio fell to 3.7x, and its debt-to-equity ratio rose to 1.5x in fiscal 3Q16, compared with 4.3x and 1.3x, respectively, in fiscal 4Q15.

Projections

Carter’s has made the following projections for fiscal 4Q16:

  • net sales growth: ~5%–6%
  • adjusted EPS: $1.65–$1.70

The company has made the following projections for fiscal 2016:

  • net sales growth: ~5%–6%
  • adjusted EPS growth: ~9%–10%

In the final part of this series, we’ll look at Pitney Bowes (PBI).

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