Q2 2024 Carter's Inc Earnings Call Transcript
Key Points
- Earnings in the second quarter were meaningfully higher than planned, driven by a record gross profit margin.
- Cash flow through June trended better than planned, ending the quarter with a higher cash position and over $1 billion in liquidity.
- US wholesale sales saw good growth, driven by exclusive brands and higher demand.
- Baby apparel, which contributes over 50% of consolidated apparel sales, continues to be the best-performing age segment.
- The company has a strong supply chain with excellent on-time shipping and negotiated lower product costs for the balance of the year.
- US retail and international sales were lower than expected, with US retail comparable sales down 12% in the quarter.
- E-commerce sales were down 16% in the second quarter.
- International sales were down 10%, with significant declines in Canada and lower international wholesale sales.
- The company faced very aggressive promotions by competitors, with some items priced 50% below Carter's pricing.
- The revised annual forecast reflects a decline in consumer confidence and ongoing inflationary pressures, leading to lower expected sales and earnings.
Welcome to Carter's second 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 second 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.
Before we begin note that statements about items such as the company's outlook 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 posted on our
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