Carter's Q3 sales drop but earnings up 4.8 percent

Carter’s, Inc. said in a statement that net sales for the third quarter decreased 78.2 million dollars or 8.3 percent to 865.1 million dollars reflecting decreased sales to certain wholesale customers, decreased traffic to company-operated stores, and decreased back-to-school sales due to ongoing disruptions related to the Covid-19 pandemic, partially offset by strong ecommerce channel growth. U.S. Retail segment comparable sales declined 3.5 percent, reflecting a retail store decline, partially offset by ecommerce growth of 17.2 percent. Net income for the quarter increased 21 million dollars or 34.8 percent to 81.2 million dollars or 1.85 dolars per diluted share, while adjusted net income increased 2 million dollars or 2.3 percent to 85.9 million dollars and adjusted earnings per diluted share increased 4.8 percent to 1.96 dollars.

“The quarter got off to a strong start with our Fourth of July holiday retail sales up 7 percent. We saw less robust demand in August during the back-to-school shopping period. We had the strongest level of demand in September with our Labor Day holiday retail sales up 15 percent, our best performance in three years. As we enter the final weeks of the year, consumer demand is less predictable this holiday season given the lingering effects and, in some markets, resurgence of the coronavirus,” said Michael D. Casey, the company’s Chairman and Chief Executive Officer.

The company’s net sales for the first nine months decreased 384.3 million dollars or 15.9 percent to 2.03 billion dollars reflecting the temporary closure of the company’s retail stores earlier this year, largely in the months of March, April, and May, and decreased sales to certain wholesale customers, both a result of disruptions related to Covid-19. Comparable ecommerce sales in the U.S. increased 39 percent. The company added that net income was 10.7 million dollars or 24 cents per diluted share, compared to 138.7 million dollars or 3.06 dollars per diluted share, while adjusted net income was 74.7 million dollars compared to 166.9 million dollars in the first three quarters of fiscal 2019 and adjusted earnings per diluted share were 1.70 dollars compared to 3.68 dollars in the first three quarters of fiscal 2019.

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