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Carter’s Inc. (NYSE:CRI), a leading retailer in children’s apparel, has seen its stock price tumble to a 52-week low, reaching $40.73. Trading at a modest P/E ratio of 8.07 and offering a substantial 7.83% dividend yield, the stock appears undervalued according to InvestingPro Fair Value analysis. This latest price point underscores a period of significant bearish momentum for the company, which has experienced a stark 1-year decline of 47.4%. Investors have been cautious as the retail sector faces headwinds, including shifting consumer trends and economic pressures that have particularly impacted Carter’s performance on the stock market, with revenue declining 3.45% over the last twelve months. Despite these challenges, the company maintains strong liquidity with a current ratio of 2.25 and has sustained dividend payments for 13 consecutive years. The company’s management is likely to be exploring strategic initiatives to stabilize the stock price and regain investor confidence as they navigate through these challenging market conditions. InvestingPro subscribers can access 12 additional exclusive tips about Carter’s current market position and future outlook.
In other recent news, Carter’s Inc. reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $2.39, compared to the projected $1.88. The company’s revenue also exceeded forecasts, reaching $860 million against an expected $833.38 million. Despite these positive financial results, Carter’s stock experienced a notable decline in pre-market trading. The company also reported a 3% decrease in full-year net sales, totaling $2.8 billion, and a 13% drop in operating income to $287 million. Additionally, Carter’s has set its 2025 net sales guidance between $2.78 billion and $2.855 billion, with anticipated declines in U.S. retail sales. In related news, Citi analysts, led by Paul Lejuez, have adjusted Carter’s stock price target from $50 to $45, maintaining a Neutral rating due to concerns over the company’s fiscal year 2025 guidance. The analysts expressed caution about Carter’s management’s expectations for the second half of the year and noted disappointment in the decision not to close more U.S. stores. Carter’s is also undergoing a search for a new CEO, adding to the uncertainty surrounding its future performance.
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