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ATLANTA - Carter’s Inc. (NYSE: CRI), a leading marketer of apparel for babies and young children, announced a revised dividend policy on Tuesday, as part of an ongoing review of its capital allocation strategy. The company has maintained dividend payments for 13 consecutive years, with a current dividend yield of 8.79%, according to InvestingPro data. This comes in the wake of new CEO Doug Palladini’s efforts to develop a strategic plan aimed at returning the company to profitable growth.
Palladini, who joined the company in early April, expressed confidence in the team’s ability to drive value creation for shareholders. He plans to present a comprehensive strategy on the second quarter earnings call later in the summer, which will outline initiatives to stimulate growth for Carter’s. The company maintains strong fundamentals with a healthy gross profit margin of 47.68% and a current ratio of 2.56, indicating solid operational efficiency and liquidity. InvestingPro analysis shows the company is currently undervalued, with additional insights available in the Pro Research Report, part of the comprehensive analysis covering 1,400+ US stocks.
The company’s Board of Directors declared a quarterly dividend of $0.25 per share, payable on June 20, 2025, to shareholders of record as of June 2, 2025. This adjustment reflects a strategic shift as Carter’s anticipates making significant investments in the business, considering a challenging market and potential cost increases due to proposed new tariffs on imported products.
Carter’s maintains a robust cash position and liquidity, which it expects to sustain. The dividend realignment suggests a cautious approach in light of the anticipated strategic investments and the current profitability level. Recent financial data shows the company generated $221.2 million in levered free cash flow over the last twelve months, though its stock has experienced a significant decline of 26.11% over the past six months. The company has stated that future dividend declarations will depend on various factors, including business conditions and financial performance.
Carter’s portfolio includes well-known brands such as OshKosh B’gosh, and its products are available through a network of over 1,000 company-operated stores and online platforms. The company also supplies to major retailers in North America and has a presence in department stores, national chains, and specialty retailers internationally.
The information in this article is based on a press release statement from Carter’s, Inc. The company has cautioned that its forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. InvestingPro subscribers can access additional insights, including 8 more ProTips and comprehensive financial metrics, to better understand Carter’s market position and future prospects. These include economic conditions, consumer spending habits, fashion trends, and international trade developments, among others.
In other recent news, Carter’s Inc. reported its first-quarter 2025 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $0.66, compared to the projected $0.62. The company also reported revenue of $630 million, slightly above the anticipated $624.86 million. Despite these positive figures, the company’s revenue marked a 5% decline year-over-year, and Carter’s has suspended its forward guidance due to leadership changes and uncertainties regarding tariffs. Barclays has downgraded Carter’s stock to an Underweight rating, setting a price target of $25, citing structural challenges in the children’s apparel sector, such as declining birth rates and pricing pressures. Additionally, Carter’s announced a significant reduction in its quarterly dividend from $0.80 to $0.25 per share, a move aligned with its current profitability levels and strategic investment plans. The company is focusing on returning to profitable growth under the new leadership of CEO Doug Palladini, who aims to balance financial efficiency with strategic investments. Carter’s is also preparing for potential strategic investments and is cautious about the impact of proposed tariffs on imported products.
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