Carter’s Stock Plummets on Margin Pressure and Cash Flow Concerns
Carter’s (CRI) shares tumbled 11% in premarket trading after fiscal 2025 results revealed mounting cost pressures and dwindling cash flow. Despite revenue growth, tariffs, product mix shifts, and rising expenses eroded profitability across all segments.
Fourth-quarter sales climbed to $925 million, buoyed by a 14-week period and stronger retail traffic. Adjusted margins contracted sharply, however, as tariff impacts and higher compensation costs weighed on earnings. Adjusted diluted EPS fell to $1.90, underscoring the strain.
Operating cash Flow plunged amid inventory buildup and cooling earnings. Management forecasts modest sales growth for FY26 but warns of double-digit EPS declines—a stark reminder of the challenges facing traditional retailers in inflationary environments.
