Carters enters new $750 million revolving credit facility to replace prior agreement

Carter’s, Inc. (NYSE:CRI) announced Monday that its wholly-owned subsidiary, The William Carter Company, has entered into a new five-year senior secured asset-based revolving credit facility totaling up to $750 million. The new agreement, effective November 17, 2025, replaces the company’s previous secured revolving credit facility, according to a statement filed with the Securities and Exchange Commission.

The new revolving credit facility includes a $750 million U.S. dollar component, with up to $100 million available in Canadian dollars, Euros, Pounds Sterling, or other currencies as agreed by the lenders. The facility also features a $100 million sub-limit for letters of credit and a $50 million swing line sub-limit. Up to $40 million of the letters of credit may be drawn in foreign currencies.

Both The William Carter Company and its wholly-owned subsidiary, The Genuine Canadian Corp., are borrowers under the facility. The agreement allows the borrowers to request additional U.S. dollar commitments up to $150 million, plus any excess borrowing base above total commitments at the time.

Borrowings under the facility will mature and lending commitments will terminate five years from the closing date. The interest rate for borrowings is determined by a floating benchmark rate plus a credit spread adjustment, if applicable, and an additional amount ranging from 1.25% to 1.50%, based on average daily excess availability.

The obligations under the facility are unconditionally guaranteed by Carter’s and certain of its domestic subsidiaries. The facility is secured by a first-priority pledge of substantially all assets of Carter’s, the borrowers, and subsidiary guarantors, subject to customary exceptions.

As of November 17, 2025, Carter’s estimated its borrowing base under the new facility at approximately $799 million, with around $743 million in availability after accounting for outstanding letters of credit.

The agreement includes covenants restricting certain indebtedness, dividend payments, and other financial activities. It also features a springing financial covenant requiring a minimum fixed charge coverage ratio if excess availability falls below specified thresholds.

This information is based on a press release statement and the company’s SEC filing.

In other recent news, Carter’s Inc. reported its third-quarter 2025 earnings, showing a mixed performance. The company achieved earnings per share (EPS) of $0.74, slightly surpassing the forecast of $0.72, which represents a 2.78% surprise. However, revenue reached $758 million, falling short of the expected $771.17 million and reflecting a flat performance compared to the previous year. In related developments, Carter’s announced a quarterly dividend of $0.25 per share, payable on December 5, 2025, to shareholders of record on November 24, 2025. This decision was made by the Board of Directors and communicated through a company press release. Additionally, UBS maintained its Neutral rating on Carter’s stock with a price target of $33.00, as the investment bank evaluated the potential impact of the new CEO, Doug Palladini, on sales and margin trends. These recent developments provide investors with a snapshot of Carter’s current financial situation and strategic direction.

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