Q3 2024 Carter's Inc Earnings Call Transcript
Key Points
- Carter's Inc (CRI) exceeded its third-quarter sales and earnings guidance, driven by strong performance in the US Retail segment.
- The company reported better-than-expected inventory levels and cash flow, ending the quarter with over $1 billion in liquidity and no seasonal borrowings.
- Carter's Inc (CRI) saw a 12% lift in omnichannel sales, with 38% of digital orders supported by stores, enhancing margin-accretive transactions.
- The company experienced growth in its Baby apparel segment, which contributed over 50% of total apparel sales, and saw a lift in new and reactivated customers.
- Carter's Inc (CRI) maintained its position as the largest supplier of children's apparel to major retailers like Target, Walmart, and Amazon, with exclusive brands forecasted to grow to 55% of total US Wholesale sales.
- Third-quarter net sales were down 4% year-over-year, with declines in the US Retail and International segments.
- The company experienced a double-digit decrease in sales for apparel targeting 4- to 10-year-old children, contributing less than 20% of total apparel sales.
- Carter's Inc (CRI) faced a 60 basis point decline in gross margin due to price investments, a higher mix of lower-margin US Wholesale sales, and higher inbound freight costs.
- US Retail sales were down 6%, with e-commerce sales declining 10% year-to-date, reflecting ongoing challenges in consumer demand.
- The International segment saw a 9% decline in sales, with Canada experiencing a high single-digit decrease due to economic pressures and warmer weather affecting demand.
Welcome to Carter's Third Quarter Fiscal 2024 Earnings Conference Call. On the call are Michael Casey, Chairman and Chief Executive Officer; Richard Westenberger, Chief Financial Officer and Chief Operating Officer; Kendra Krugman, Chief Creative and Growth Officer; and Sean McHugh, Treasurer. Please note that today's call is being recorded.
I'll now turn the call over to Mr. McHugh.
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Thank you, and good morning, everyone. We issued our third quarter 2024 earnings release earlier today. The release and presentation materials for today's call are available on our Investor Relations website at ir.carters.com. Note that statements on today's call about items such as the company's outlook and plans are forward-looking statements.
For a discussion of factors that could cause actual results to vary from those contained in the forward-looking statements, please see our most recent SEC filings and the earnings release and presentation materials
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