One-glance verdict
Undervalued
$118.28 our estimate vs market $31.81
Wall Street consensus: $38.00 (-67.9% lower than our fair-value estimate)
73% below our estimate, below the bear case
Fundamentals snapshot
Carter's, Inc.
CRI · NYQ · Consumer Cyclical · Apparel Retail
Current price
$31.81
52-week range
$27.86 - $44.44
Market cap
$1.17B
Balance sheet
Watch
4.21x Stretched
Net debt $531.19M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 2.8% last year.
- Reward Returns 20.7% on equity, ahead of 60% of its peers.
- Risk Forward P/E (9.2x) is higher than trailing (5.9x) - earnings are expected to drop.
- Risk Insider ownership is only 4.8% (peer median: 6.8%).
What this company does
Carter's, Inc.
Carter's designs and sells children's clothing under popular brands like Carter's and OshKosh B'gosh. Most of their money comes from selling clothes directly to shoppers through their own stores and websites, which is important because it means they control the customer experience and keep more of the profit from each sale compared to selling through other stores. They make money by selling clothes for babies and young children, from everyday outfits to sleepwear and even things for mealtime and bath time.
How the company got here
Carter's, Inc. has a long history, dating back to 1865 when William Carter founded the William Carter Company in Massachusetts, initially making hand-knit mittens. [12] The company expanded into infant and children's wear in the early 1900s and introduced innovative designs like the "Jiffon" neck for easier dressing in the 1950s. [12] Over the decades, Carter's grew its retail presence through its own stores and partnerships with other retailers. [12] A significant turning point was the acquisition of OshKosh B'gosh in 2005, which brought another well-established children's apparel brand into the company's portfolio. [3, 5] The company went public in 2003 and has since continued to expand its reach through various channels, including its own e-commerce platforms and exclusive lines for major retailers like Target and Walmart. [3, 2]
What it actually does
Carter's, Inc. designs, sources, and markets clothing and accessories for babies, toddlers, and young children. [8] They are known for offering a wide range of products, including everyday wear like bodysuits and playclothes, as well as essentials like sleepwear, layette items, and outerwear. [8, 11] The company also offers related baby gear and accessories, such as diaper bags and toys, particularly through its Skip Hop brand. [8] Carter's products are recognized for their focus on quality, comfort, and durability, aiming to make parenting a little easier. [16]
Carter's Retail
This segment represents Carter's direct sales to consumers through its own channels. [1] It includes the company's physical retail stores, its e-commerce website (Carters.com), and its mobile app. [1, 2] Through these channels, Carter's sells its various brands directly to shoppers, allowing for a controlled brand experience and direct customer relationships. [1] This segment is a significant part of the company's overall business, making up about half of its revenue. [11]
Carter's Wholesale
In this segment, Carter's sells its products in bulk to other retailers, who then sell them to the end consumer. [1] These wholesale customers include major department stores, national chains, and specialty retailers. [1, 2] Carter's also develops exclusive brands for large retailers like Walmart and Target, which are then sold in those stores. [2, 3] This channel allows Carter's to reach a broad customer base through established retail partners. [1]
International
This segment encompasses Carter's sales and operations outside of the United States. [1] It includes company-operated retail stores, wholesale distribution, and online sales in international markets. [1, 2] Additionally, Carter's generates revenue through royalty income from international licensees who sell its brands in various countries. [2] This segment represents a smaller portion of the company's overall sales compared to its U.S. operations. [2]
What management is betting on now
Carter's management is focused on a strategy to defend and extend its leadership in the baby and young children's apparel market. [1] A key priority is improving profitability by enhancing direct-to-consumer sales, optimizing how products are sold through different channels (like stores versus online), and being disciplined in how they source materials. [1] The company is also working to stay relevant to new generations of parents, particularly Gen Z, by evolving its products, retail experiences, and marketing efforts. [4, 7] This includes a focus on value, which they define as a combination of style, quality, and price, ensuring their clothing is durable and trustworthy for everyday use. [4] They are also investing in sustainability, particularly through their Little Planet brand, using eco-friendly materials like organic cotton. [7]
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$-95.69M
FY2025 Q4
$270.94M
FY2026 Q1
$-58.99M
FY2026 Q2
$24.11M
FY2026 Q3
$-144.09M
FY2026 Q4
$247.60M
FY2027 Q1
$-543.00K
FY2027 Q2
$190.04M
Revenue
$615.49M
Net income
$104.96M
Diluted EPS
2.87
Operating cash flow
$195.88M
Free cash flow
$190.04M
Fetching…
Sources
Revenue
$681.11M
Net income
$14.34M
Diluted EPS
0.39
Operating cash flow
$6.42M
Free cash flow
$-543.00K
Fetching…
Sources
Revenue
$925.45M
Net income
$64.22M
Diluted EPS
1.77
Operating cash flow
$258.64M
Free cash flow
$247.60M
Fetching…
Sources
Revenue
$757.84M
Net income
$11.59M
Diluted EPS
0.32
Operating cash flow
$-127.97M
Free cash flow
$-144.09M
Fetching…
Sources
Revenue
$585.31M
Net income
$446.00K
Diluted EPS
0.01
Operating cash flow
$40.31M
Free cash flow
$24.11M
Fetching…
Sources
Revenue
$629.83M
Net income
$15.54M
Diluted EPS
0.43
Operating cash flow
$-48.64M
Free cash flow
$-58.99M
Fetching…
Sources
Revenue
$859.71M
Net income
$61.52M
Diluted EPS
1.70
Operating cash flow
$287.47M
Free cash flow
$270.94M
Fetching…
Sources
Revenue
$758.46M
Net income
$58.32M
Diluted EPS
1.62
Operating cash flow
$-80.37M
Free cash flow
$-95.69M
Fetching…
Sources
Is it cheap or expensive?
Fair value $118.28 vs current price $31.81
Wall Street consensus is the average analyst price target: $38.00 (-67.9% lower than our fair-value estimate).
Our most-likely fair value is $118.28 a share — about 271.8% above today's price of $31.81, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $531.2M. Interest coverage 4.2x.
Net debt
$531.19M
Interest coverage
4.21x
Carter's, Inc.'s profit covers its interest bill about 4.2 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
CRI
BASELINE
Carter's, Inc.
Total debt $1.18B Interest coverage 4.21x This is the baseline the peer rows are being compared against.
Total debt $622.55M Interest coverage -1.67x -100% vs CRI This peer has almost no interest-payment cushion compared with CRI.
Total debt $340.84M Interest coverage 308.17x +7,228% vs CRI Carries about 73.3x more debt cushion than CRI.
Total debt $461.24M Interest coverage 13.21x +214% vs CRI Carries about 3.1x more debt cushion than CRI.
Total debt $1.27B Interest coverage 5.56x +32% vs CRI Carries about 1.3x more debt cushion than CRI.
Total debt $524.09M Interest coverage 4.32x +3% vs CRI Has roughly the same debt cushion as CRI.
What you should know
The case for and against CRI
3 Rewards
2 Risks
Rewards
-
Revenue grew 2.8% last year.
-
Returns 20.7% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Forward P/E (9.2x) is higher than trailing (5.9x) - earnings are expected to drop.
-
Insider ownership is only 4.8% (peer median: 6.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
5.93x
Forward P/E
9.20x
P/B
1.14x
P/S
0.39x
EV/EBITDA
4.95x
PEG ratio
2.01x
Profitability
How much profit each dollar creates
Gross margin
48.6%
Operating margin
23.7%
Net margin
6.5%
ROE
20.7%
ROA
6.9%
Health
Liquidity and balance-sheet strength
Debt / equity
1.15x
Current ratio
2.47x
Quick ratio
1.38x
Total debt
$1.18B
Total cash
$653.57M
Growth
How the business has been compounding
Revenue TTM
$2.98B
Revenue 5Y CAGR
-4.5%
EPS TTM
5.36
EPS 5Y CAGR
-26.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$332.97M
Free CF TTM
$68.63M
FCF margin
2.3%
Dividend
Shareholder payout
Yield
3.1%
Payout ratio
18.7%
Last ex-div date
2026-09-01