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Carter’s Inc. (NYSE:CRI), a prominent player in the children’s apparel market, has seen its stock tumble to a 52-week low, reaching a price level of $39.81. Trading at an attractive P/E ratio of 7.9 and offering a substantial 7.7% dividend yield, the company has maintained consistent dividend payments for 13 consecutive years. According to InvestingPro analysis, the stock appears undervalued at current levels. This significant downturn reflects a challenging year for the company, with the stock experiencing a steep 1-year change, plummeting by -52.83%. Despite the decline, Carter’s maintains strong liquidity with a current ratio of 2.25, indicating solid financial health. Investors are closely monitoring Carter’s performance as it navigates through a complex retail environment, marked by shifting consumer trends and heightened competition. The company’s ability to rebound from this low will be critical in determining its future in the competitive landscape of children’s apparel. For deeper insights into Carter’s financial health and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Carter’s Inc. has reported its fourth-quarter 2024 earnings, which exceeded analysts’ expectations. The company achieved an earnings per share (EPS) of $2.39, surpassing the forecast of $1.88, and revenue came in at $860 million, above the anticipated $833.38 million. Despite these positive results, Carter’s stock experienced a decline, attributed to investor concerns over future guidance. The company’s full-year net sales decreased by 3% to $2.8 billion, with operating income also down by 13% to $287 million.
Citi analysts have adjusted Carter’s stock price target to $45, down from $50, while maintaining a Neutral rating. This revision follows Carter’s recent financial disclosures and reflects challenges such as weak fiscal year 2025 guidance. The company’s first-quarter-to-date trends show a 7% decline, slightly better than the 8% decline in the same period last year. Carter’s anticipates U.S. retail sales to decline by mid-single digits in 2025, with wholesale sales remaining flat or slightly down.
Citi expressed disappointment over Carter’s decision not to close more U.S. stores amidst uncertainty in the direct-to-consumer business. Additionally, the company is undergoing a search for a new CEO following the retirement of its previous CEO. Carter’s has set its 2025 net sales guidance between $2.78 billion and $2.855 billion, with operating income expected to range from $180 million to $210 million.
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