Carter’s (NYSE: $CRI), a children’s apparel manufacturer, released its Q3 fiscal 2025 results to a positive market reaction on October 27, 2025. Let us take a deep dive into the results.
Carter’s Q3 Results
For the third quarter of fiscal 2025, Carter’s ($CRI) reported revenue of $757.8 million, a 0.1% decline compared to the $758.5 million reported last year, but below estimates of $760.11 million. The company reported an adjusted diluted EPS of $0.74, compared to $1.64 last year, and below estimates of $0.78.
Other Financial Highlights
Carter’s reported a 62.2% decline in operating income to $$29.1 million compared to $77 million last year. Its adjusted operating income declined 48.9% to $39.4 million compared to $77 million last year.
Meanwhile, the adjusted operating margin fell to 5.2% compared to 10.2% last year due to higher tariff costs, lower unit volume, investments in new stores, and investments in product make, offset partially by higher prices. The company’s adjusted net income fell to $26.8 million compared to $59 million last year.
Dividends
The company paid a dividend of $0.25 per common share, totaling $9.1 million. For the first three quarters of fiscal 2025, the company has now paid cash dividends of $47.2 million. It did not buy back any shares during Q3.
Carter’s Announces Productivity Improvements
Carter’s ($CRI) announced that it had taken several actions to improve productivity. These include restructuring, where it plans to reduce its office-based roles by around 300 or 15% by the end of the fiscal year.
The company stated that it recorded a $6.1 million charge in Q3 for severance and outplacement services and expects to incur an additional $4 to $5 million in Q4. According to the earnings report, the action will result in savings of around $35 million from 2026 onward.
It also plans to cut over $10 million in annual spending in several categories, with savings starting in 2026. Carter’s also announced its plans to close around 150 stores at lease expiration in North America in the next three years, higher than the previously planned 100 store closures.
Around 100 of those closures will occur between fiscal 2025 and 2026. Carter’s noted that while those 150 stores represent around $110 million in annual net sales based on the last 12 months, the net impact will be accretive to its profitability.
Outlook
Carter’s noted that new tariffs by the Trump administration had led to around $110 million in duties on imported products. It estimates that Cambodia, India, and Bangladesh will represent around 75% of its product sourcing spend in fiscal 2025, with China representing less than 3% of that.
On an annualized basis, it estimates that the gross pre-tax earnings impact from the tariffs will be around $200-$250 million. It expects a net adverse impact on pre-tax income of around $25 million to $35 million due to tariffs. Due to the uncertainty around tariffs, Carter’s announced that it had suspended its fiscal 2025 guidance.
Stock Performance
Despite the earnings and revenue miss, Carter’s (CRI) stock was up 1.76% to $32.92 on October 27, 2025, as of 11:13 AM in New York. The stock is up 14.11% in the past month, and over the past six months, it has dipped 1.62%. Year to date, Carter’s ($CRI) is down 38.51%.
Optimism for $CRI is low, with analysts giving the stock a moderate sell rating. They forecast an average price target of 24.80, which is a 25.95% decline based on the most recent price. The analysts forecast a high of $28 and a low of $22 for the stock.
Is Carter’s (CRI) A Buy?
In its earnings report, Carter’s ($CR) detailed how much of an impact the tariffs have had on its business. However, on Monday, October 27, 2025, it was revealed that China and the US had reached an agreement for a framework on a trade deal.
Fueling the optimism was Trump’s announcement that he expects China and the US to finalize a trade deal in the next few days. Based on the news reports and Trump’s announcement, it could explain the upward price movement of $CRI shares despite the revenue and earnings miss. Based on the analysts’ forecast and the current impasse on the tariff war, waiting on the sidelines could potentially be a great move.
Click Here for Updates on CRI – It’s 100% FREE to Sign Up for Text Message Notifications!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment. Please read our Full Disclaimer: https://dexwirenews.com/disclaimer/
