Carter’s, Inc. Reports First Quarter Fiscal 2025 Results
-
Net sales
vs.$630 million in Q1 2024$661 million
-
Diluted EPS
vs.$0.43 in Q1 2024; adjusted diluted EPS$1.04 vs.$0.66 in Q1 2024$1.04
-
Returned
to shareholders through dividends in Q1$29 million
- Company suspends forward guidance in light of CEO transition and tariff uncertainty
“I am very proud to join Carter’s as its new CEO,” said Douglas C. Palladini, Chief Executive Officer & President. “Carter’s is one of America’s most iconic companies and I am sincerely grateful to our Board of Directors for the faith it has placed in me to return Carter’s to consistent, profitable growth. I very much look forward to earning the trust of all our valuable stakeholders, including consumers, employees, key accounts, and investors.
“I believe the potential of Carter’s is tremendous. The strength of our brand assets, broad market distribution, substantial equity with generations of consumers, and our talented team represent significant advantages to drive long-term growth. As someone who wore Carter’s and OshKosh B’gosh as a kid and dressed his own children in our brands as well, I understand the special bond we have with families and the honor we have in being part of such a remarkable time in peoples’ lives.
“Our teams delivered a good first quarter. Our
“As I get up to speed on the business and assess what is required to return to growth, we are suspending forward-looking guidance at this time. I strongly believe in the tenet that we ‘do what we say’ and I intend to spend the time required to be able to meet that commitment. In addition, the current tariff situation has introduced substantial uncertainty, greatly complicating our ability to accurately predict Carter’s financial outlook.”
Adjustments to Reported GAAP Results
In addition to the results presented in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements, as presented below. The Company believes these adjustments provide a meaningful comparison of the Company’s results and afford investors a view of what management considers to be the Company’s underlying performance. These measures are presented for informational purposes only. See “Reconciliation of Adjusted Results to GAAP” section of this release for additional disclosures and reconciliations regarding these non-GAAP financial measures.
First quarter fiscal 2025 results included pre-tax expenses of
|
Fiscal Quarter Ended |
|||||||||||||||||||||||
|
March 29, 2025 |
|
|
March 30, 2024 |
||||||||||||||||||||
(In millions, except earnings per share) |
Operating Income |
|
% Net Sales |
|
Net
|
|
Diluted
|
|
|
Operating
|
|
% Net
|
|
Net
|
|
Diluted
|
||||||||
As reported (GAAP) |
$ |
26.1 |
|
4.1 |
% |
|
$ |
15.5 |
|
$ |
0.43 |
|
|
$ |
55.0 |
|
8.3 |
% |
|
$ |
38.0 |
|
$ |
1.04 |
Leadership transition costs |
|
6.1 |
|
|
|
|
5.8 |
|
|
0.16 |
|
|
|
— |
|
|
|
|
— |
|
|
— |
||
Operating model improvement costs |
|
3.2 |
|
|
|
|
2.4 |
|
|
0.07 |
|
|
|
— |
|
|
|
|
— |
|
|
— |
||
As adjusted |
$ |
35.4 |
|
5.6 |
% |
|
$ |
23.8 |
|
$ |
0.66 |
|
|
$ |
55.0 |
|
8.3 |
% |
|
$ |
38.0 |
|
$ |
1.04 |
Note: Results may not be additive due to rounding. |
Consolidated Results
First Quarter of Fiscal 2025 (13 weeks) compared to First Quarter of Fiscal 2024 (13 weeks)
Net sales decreased
Operating income decreased
Adjusted operating income (a non-GAAP measure) decreased
Net income decreased
Adjusted net income (a non-GAAP measure) decreased
Net cash used in operations in the first quarter of fiscal 2025 was
See the “Reconciliation of Adjusted Results to GAAP” sections of this release for additional disclosures regarding non-GAAP measures.
Return of Capital
In the first quarter of fiscal 2025, the Company paid a cash dividend of
The Company’s Board of Directors will evaluate future distributions of capital, including dividends and share repurchases, based on a number of factors, including business conditions, the Company’s future financial performance, investment priorities, and other considerations.
Leadership Transition
On January 3, 2025, Michael D. Casey retired as Chief Executive Officer and Chairman of the Board of the Company. Mr. Casey continued to serve in an advisory capacity through February 28, 2025.
Effective January 5, 2025, Richard F. Westenberger, then serving as Senior Executive Vice President, Chief Financial Officer & Chief Operating Officer, was appointed as Interim Chief Executive Officer.
On March 26, 2025, the Company announced the appointment of Douglas C. Palladini as Chief Executive Officer & President and a member of the Board of Directors, effective April 3, 2025. Mr. Palladini succeeded Mr. Westenberger, who continues to serve as Senior Executive Vice President, Chief Financial Officer & Chief Operating Officer.
2025 Business Outlook
Given the Company’s recent leadership transition and significant uncertainty surrounding proposed new tariffs and potential related impact on the business, the Company is suspending its forward guidance.
Conference Call
The Company will hold a conference call with investors to discuss first quarter fiscal 2025 results and provide an update on its business on April 25, 2025 at 8:30 a.m. Eastern Daylight Time. To listen to a live webcast and view the accompanying presentation materials, please visit ir.carters.com and select links for “News & Events” followed by “Events.” To access the call by phone, please preregister on https://register-conf.media-server.com/register/BIa9905a7906854eb1863d5668318514d5 to receive your dial-in number and unique passcode.
A webcast replay will be available shortly after the conclusion of the call at ir.carters.com.
About Carter’s, Inc.
Carter’s, Inc. is the largest branded marketer in
Forward Looking Statements
Statements in this press release that are not historical fact and use predictive words such as “estimates”, “outlook”, “guidance”, “expect”, “believe”, “intend”, “designed”, “target”, “plans”, “may”, “will”, “are confident” and similar words are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements or views expressed in this press release. These risks and uncertainties include, but are not limited to, those disclosed in Part II, Item 1A. “Risk Factors” of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2025 and Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024, and otherwise in our reports and filings with the Securities and Exchange Commission, as well as the following factors: changes in global economic and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits; risks related to public health crises; risks related to consumer tastes and preferences, as well as fashion trends; the failure to protect our intellectual property; the diminished value of our brands, potentially as a result of negative publicity or unsuccessful branding and marketing efforts; delays, product recalls, or loss of revenue due to a failure to meet our quality standards; risks related to uncertainty regarding the future of international trade agreements and the United States’ position on international trade, as well as significant political, trade, and regulatory developments and other circumstances beyond our control; increased competition in the marketplace; financial difficulties for one or more of our major customers; identification of locations and negotiation of appropriate lease terms for our retail stores; distinct risks facing our eCommerce business; failure to forecast demand for our products and our failure to manage our inventory; increased margin pressures, including increased cost of materials and labor and our inability to successfully increase prices to offset these increased costs; continued inflationary pressures with respect to labor and raw materials and global supply chain constraints that have, and could continue, to affect freight, transit, and other costs; fluctuations in foreign currency exchange rates; unseasonable or extreme weather conditions; risks associated with corporate responsibility issues; our foreign sourcing arrangements; a relatively small number of vendors supply a significant amount of our products; disruptions in our supply chain, including increased transportation and freight costs; our ability to effectively source and manage inventory; problems with our
CARTER’S, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands, except per share data) (unaudited) |
|||||||
|
Fiscal Quarter Ended |
||||||
|
March 29, 2025 |
|
March 30, 2024 |
||||
Net sales |
$ |
629,827 |
|
|
$ |
661,492 |
|
Cost of goods sold |
|
338,737 |
|
|
|
346,302 |
|
Gross profit |
|
291,090 |
|
|
|
315,190 |
|
Royalty income, net |
|
5,332 |
|
|
|
5,216 |
|
Selling, general, and administrative expenses |
|
270,320 |
|
|
|
265,371 |
|
Operating income |
|
26,102 |
|
|
|
55,035 |
|
Interest expense |
|
7,819 |
|
|
|
7,905 |
|
Interest income |
|
(3,142 |
) |
|
|
(3,089 |
) |
Other expense, net |
|
76 |
|
|
|
274 |
|
Income before income taxes |
|
21,349 |
|
|
|
49,945 |
|
Income tax provision |
|
5,810 |
|
|
|
11,912 |
|
Net income |
$ |
15,539 |
|
|
$ |
38,033 |
|
|
|
|
|
||||
Basic net income per common share |
$ |
0.43 |
|
|
$ |
1.04 |
|
Diluted net income per common share |
$ |
0.43 |
|
|
$ |
1.04 |
|
Dividend declared and paid per common share |
$ |
0.80 |
|
|
$ |
0.80 |
|
CARTER’S, INC. BUSINESS SEGMENT RESULTS (dollars in thousands) (unaudited) |
|||||||
|
Fiscal Quarter Ended |
||||||
|
March 29, 2025 |
|
% of
|
|
March 30, 2024 |
|
% of
|
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,096 |
|
|
|
264,131 |
|
|
International |
85,299 |
|
|
|
89,719 |
|
|
Consolidated net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss) (1): |
|
|
Segment operating
|
|
|
|
Segment operating
|
|
|
|
|
|
|
|
|
|
55,309 |
|
|
|
63,328 |
|
|
International |
(215) |
|
(0.3)% |
|
2,186 |
|
|
Total segment operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items not included in segment operating income: |
|
|
Consolidated
|
|
|
|
Consolidated
|
Unallocated corporate expenses (2) |
|
|
n/a |
|
|
|
n/a |
Leadership transition costs (3) |
(6,126) |
|
n/a |
|
— |
|
n/a |
Operating model improvement costs (4) |
(3,162) |
|
n/a |
|
— |
|
n/a |
Consolidated operating income |
|
|
|
|
|
|
|
(1) | In fiscal 2024, the Company changed its measure of segment profitability to segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses as well as specific charges that are not directly attributable to segment operations, including restructuring costs, operating model improvement costs, leadership transition costs, and impairment charges related to goodwill and indefinite-lived intangible assets, which were included in our previous measure of segment profitability. Prior period segment operating income for the fiscal quarter ended March 30, 2024 has been recast to conform to the current presentation. |
|
(2) | Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our business segments and include unallocated accounting, finance, legal, human resources, and information technology expenses, occupancy costs for our corporate headquarters, and other benefit and compensation programs, including performance-based compensation. |
|
(3) | Related to costs associated with the transition of our former CEO, including accelerated vesting of outstanding time-based restricted stock awards. |
|
(4) | Primarily related to third-party consulting costs. |
CARTER’S, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) (unaudited) |
|||||||||||
|
March 29, 2025 |
|
December 28, 2024 |
|
March 30, 2024 |
||||||
ASSETS |
|
|
|
|
|
||||||
Current assets: |
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
320,794 |
|
|
$ |
412,926 |
|
|
$ |
267,575 |
|
Accounts receivable, net of allowance for credit losses of |
|
203,873 |
|
|
|
194,834 |
|
|
|
224,075 |
|
Finished goods inventories, net of inventory reserves of |
|
474,124 |
|
|
|
502,332 |
|
|
|
473,362 |
|
Prepaid expenses and other current assets |
|
50,216 |
|
|
|
32,580 |
|
|
|
51,775 |
|
Total current assets |
|
1,049,007 |
|
|
|
1,142,672 |
|
|
|
1,016,787 |
|
Property, plant, and equipment, net of accumulated depreciation of |
|
179,247 |
|
|
|
180,956 |
|
|
|
182,513 |
|
Operating lease assets |
|
568,856 |
|
|
|
577,133 |
|
|
|
522,192 |
|
Tradenames, net |
|
268,836 |
|
|
|
268,008 |
|
|
|
298,141 |
|
Goodwill |
|
207,125 |
|
|
|
206,875 |
|
|
|
209,733 |
|
Customer relationships, net |
|
22,672 |
|
|
|
23,543 |
|
|
|
26,383 |
|
Other assets |
|
36,057 |
|
|
|
33,980 |
|
|
|
29,769 |
|
Total assets |
$ |
2,331,800 |
|
|
$ |
2,433,167 |
|
|
$ |
2,285,518 |
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
||||||
Current liabilities: |
|
|
|
|
|
||||||
Accounts payable |
$ |
199,056 |
|
|
$ |
248,200 |
|
|
$ |
191,406 |
|
Current operating lease liabilities |
|
125,556 |
|
|
|
130,564 |
|
|
|
133,190 |
|
Other current liabilities |
|
84,734 |
|
|
|
130,052 |
|
|
|
94,361 |
|
Total current liabilities |
|
409,346 |
|
|
|
508,816 |
|
|
|
418,957 |
|
|
|
|
|
|
|
||||||
Long-term debt, net |
|
498,328 |
|
|
|
498,127 |
|
|
|
497,543 |
|
Deferred income taxes |
|
45,300 |
|
|
|
38,210 |
|
|
|
48,090 |
|
Long-term operating lease liabilities |
|
498,628 |
|
|
|
501,503 |
|
|
|
444,375 |
|
Other long-term liabilities |
|
32,953 |
|
|
|
31,949 |
|
|
|
35,200 |
|
Total liabilities |
$ |
1,484,555 |
|
|
$ |
1,578,605 |
|
|
$ |
1,444,165 |
|
|
|
|
|
|
|
||||||
Commitments and contingencies |
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Stockholders' equity: |
|
|
|
|
|
||||||
Preferred stock; par value |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Common stock, voting; par value |
|
362 |
|
|
|
360 |
|
|
|
366 |
|
Additional paid-in capital |
|
9,385 |
|
|
|
3,856 |
|
|
|
— |
|
Accumulated other comprehensive loss |
|
(43,066 |
) |
|
|
(43,678 |
) |
|
|
(25,667 |
) |
Retained earnings |
|
880,564 |
|
|
|
894,024 |
|
|
|
866,654 |
|
Total stockholders' equity |
|
847,245 |
|
|
|
854,562 |
|
|
|
841,353 |
|
Total liabilities and stockholders' equity |
$ |
2,331,800 |
|
|
$ |
2,433,167 |
|
|
$ |
2,285,518 |
|
CARTER’S, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (unaudited) |
|||||||
|
Fiscal Quarter Ended |
||||||
|
March 29, 2025 |
|
March 30, 2024 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
15,539 |
|
|
$ |
38,033 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
||||
Depreciation of property, plant, and equipment |
|
12,340 |
|
|
|
13,905 |
|
Amortization of intangible assets |
|
914 |
|
|
|
929 |
|
Provision for excess and obsolete inventory, net |
|
1,385 |
|
|
|
2,026 |
|
Amortization of debt issuance costs |
|
415 |
|
|
|
403 |
|
Stock-based compensation expense |
|
9,753 |
|
|
|
5,170 |
|
Unrealized foreign currency exchange (gain) loss, net |
|
(295 |
) |
|
|
9 |
|
(Recoveries of) provisions for doubtful accounts receivable from customers |
|
(454 |
) |
|
|
561 |
|
Unrealized gain on investments |
|
(329 |
) |
|
|
(618 |
) |
Deferred income taxes |
|
6,572 |
|
|
|
6,811 |
|
Effect of changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(8,603 |
) |
|
|
(40,746 |
) |
Finished goods inventories |
|
27,122 |
|
|
|
61,039 |
|
Prepaid expenses and other assets |
|
(19,035 |
) |
|
|
(22,386 |
) |
Accounts payable and other liabilities |
|
(93,968 |
) |
|
|
(90,687 |
) |
Net cash used in operating activities |
$ |
(48,644 |
) |
|
$ |
(25,551 |
) |
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures |
$ |
(10,346 |
) |
|
$ |
(12,017 |
) |
Net cash used in investing activities |
$ |
(10,346 |
) |
|
$ |
(12,017 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Dividends paid |
$ |
(28,999 |
) |
|
$ |
(29,338 |
) |
Repurchases of common stock |
|
— |
|
|
|
(8,999 |
) |
Withholdings from vesting of restricted stock |
|
(4,222 |
) |
|
|
(7,378 |
) |
Proceeds from exercises of stock options |
|
— |
|
|
|
367 |
|
Other |
|
(370 |
) |
|
|
— |
|
Net cash used in financing activities |
$ |
(33,591 |
) |
|
$ |
(45,348 |
) |
|
|
|
|
||||
Net effect of exchange rate changes on cash and cash equivalents |
|
449 |
|
|
|
(722 |
) |
Net decrease in cash and cash equivalents |
$ |
(92,132 |
) |
|
$ |
(83,638 |
) |
Cash and cash equivalents, beginning of period |
|
412,926 |
|
|
|
351,213 |
|
Cash and cash equivalents, end of period |
$ |
320,794 |
|
|
$ |
267,575 |
|
CARTER’S, INC. RECONCILIATION OF ADJUSTED RESULTS TO GAAP (dollars in millions, except earnings per share) (unaudited) |
|||||||||||||||||||||
|
Fiscal Quarter Ended March 29, 2025 |
||||||||||||||||||||
|
SG&A |
|
% Net
|
|
Operating
|
|
% Net
|
|
Income
|
|
Net
|
|
Diluted
|
||||||||
As reported (GAAP) |
$ |
270.3 |
|
|
42.9 |
% |
|
$ |
26.1 |
|
4.1 |
% |
|
$ |
5.8 |
|
$ |
15.5 |
|
$ |
0.43 |
Leadership transition costs (b) |
|
(6.1 |
) |
|
|
|
|
6.1 |
|
|
|
|
0.3 |
|
|
5.8 |
|
|
0.16 |
||
Operating model improvement costs (c) |
|
(3.2 |
) |
|
|
|
|
3.2 |
|
|
|
|
0.8 |
|
|
2.4 |
|
|
0.07 |
||
As adjusted (a) |
$ |
261.0 |
|
|
41.4 |
% |
|
$ |
35.4 |
|
5.6 |
% |
|
$ |
6.9 |
|
$ |
23.8 |
|
$ |
0.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present SG&A, operating income, income taxes, net income, and net income on a diluted share basis excluding the adjustments discussed above. The Company believes these adjustments provide a meaningful comparison of the Company’s results and afford investors a view of what management considers to be the Company's core performance. The adjusted, non-GAAP financial measurements included in this earnings release should not be considered as an alternative to net income or as any other measurement of performance derived in accordance with GAAP. The adjusted, non-GAAP financial measurements are presented for informational purposes only and are not necessarily indicative of the Company’s future condition or results of operations. |
|
(b) | Related to costs associated with the transition of our former CEO, including accelerated vesting of outstanding time-based restricted stock awards. |
|
(c) | Primarily related to third-party consulting costs. |
|
Note: Results may not be additive due to rounding. |
CARTER’S, INC. RECONCILIATION OF NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS (unaudited) |
|||||||
|
Fiscal Quarter Ended |
||||||
|
March 29, 2025 |
|
March 30, 2024 |
||||
Weighted-average number of common and common equivalent shares outstanding: |
|
|
|
||||
Basic number of common shares outstanding |
|
35,312,090 |
|
|
|
35,860,740 |
|
Dilutive effect of equity awards |
|
1,923 |
|
|
|
3,843 |
|
Diluted number of common and common equivalent shares outstanding |
|
35,314,013 |
|
|
|
35,864,583 |
|
As reported on a GAAP Basis: |
|
|
|
||||
(dollars in thousands, except per share data) |
|
|
|
||||
Basic net income per common share: |
|
|
|
||||
Net income |
$ |
15,539 |
|
|
$ |
38,033 |
|
Income allocated to participating securities |
|
(285 |
) |
|
|
(691 |
) |
Net income available to common shareholders |
$ |
15,254 |
|
|
$ |
37,342 |
|
Basic net income per common share |
$ |
0.43 |
|
|
$ |
1.04 |
|
Diluted net income per common share: |
|
|
|
||||
Net income |
$ |
15,539 |
|
|
$ |
38,033 |
|
Income allocated to participating securities |
|
(285 |
) |
|
|
(691 |
) |
Net income available to common shareholders |
$ |
15,254 |
|
|
$ |
37,342 |
|
Diluted net income per common share |
$ |
0.43 |
|
|
$ |
1.04 |
|
As adjusted (a): |
|
|
|
||||
Basic net income per common share: |
|
|
|
||||
Net income |
$ |
23,750 |
|
|
$ |
38,033 |
|
Income allocated to participating securities |
|
(468 |
) |
|
|
(691 |
) |
Net income available to common shareholders |
$ |
23,282 |
|
|
$ |
37,342 |
|
Basic net income per common share |
$ |
0.66 |
|
|
$ |
1.04 |
|
Diluted net income per common share: |
|
|
|
||||
Net income |
$ |
23,750 |
|
|
$ |
38,033 |
|
Income allocated to participating securities |
|
(468 |
) |
|
|
(691 |
) |
Net income available to common shareholders |
$ |
23,282 |
|
|
$ |
37,342 |
|
Diluted net income per common share |
$ |
0.66 |
|
|
$ |
1.04 |
(a) |
In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present per share data excluding the adjustments discussed above. The Company has excluded |
|
Note: Results may not be additive due to rounding. |
CARTER’S, INC. RECONCILIATION OF ADJUSTED RESULTS TO GAAP (dollars in millions) (unaudited) |
||||||||||||
The following table provides a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods indicated: |
||||||||||||
|
|
Fiscal Quarter Ended |
|
Four Fiscal Quarters Ended |
||||||||
|
|
March 29, 2025 |
|
March 30, 2024 |
|
March 29, 2025 |
||||||
Net income |
|
$ |
15.5 |
|
|
$ |
38.0 |
|
|
$ |
163.0 |
|
Interest expense |
|
|
7.8 |
|
|
|
7.9 |
|
|
|
31.2 |
|
Interest income |
|
|
(3.1 |
) |
|
|
(3.1 |
) |
|
|
(11.1 |
) |
Income tax provision |
|
|
5.8 |
|
|
|
11.9 |
|
|
|
39.2 |
|
Depreciation and amortization |
|
|
13.3 |
|
|
|
14.8 |
|
|
|
56.4 |
|
EBITDA |
|
$ |
39.3 |
|
|
$ |
69.6 |
|
|
$ |
278.7 |
|
|
|
|
|
|
|
|
||||||
Adjustments to EBITDA |
|
|
|
|
|
|
||||||
Leadership transition costs (a) |
|
$ |
6.1 |
|
|
$ |
— |
|
|
$ |
6.1 |
|
Operating model improvement costs (b) |
|
|
3.2 |
|
|
|
— |
|
|
|
3.2 |
|
Organizational restructuring (c) |
|
|
— |
|
|
|
— |
|
|
|
1.8 |
|
Intangible asset impairment (d) |
|
|
— |
|
|
|
— |
|
|
|
30.0 |
|
Partial pension plan settlement (e) |
|
|
— |
|
|
|
— |
|
|
|
0.9 |
|
Total adjustments |
|
|
9.3 |
|
|
|
— |
|
|
|
42.1 |
|
Adjusted EBITDA |
|
$ |
48.6 |
|
|
$ |
69.6 |
|
|
$ |
320.8 |
|
(a) | Related to costs associated with the transition of our former CEO, including accelerated vesting of outstanding time-based restricted stock awards. |
|
(b) | Primarily related to third-party consulting costs. |
|
(c) | Net expenses related to organizational restructuring. |
|
(d) | Non-cash impairment charge on the OshKosh indefinite-lived tradename asset. |
|
(e) | Non-cash charge for partial settlement of the OshKosh B’Gosh Pension Plan. |
|
Note: Results may not be additive due to rounding. |
EBITDA and Adjusted EBITDA are supplemental financial measures that are not defined or prepared in accordance with GAAP. We define EBITDA as net income before interest, income taxes, and depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items described in footnotes (a) - (e) to the table above. |
We present EBITDA and Adjusted EBITDA because we consider them important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. These measures also afford investors a view of what management considers to be the Company's core performance. |
The use of EBITDA and Adjusted EBITDA instead of net income or cash flows from operations has limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. EBITDA and Adjusted EBITDA do not represent net income or cash flow from operations as those terms are defined by GAAP and do not necessarily indicate whether cash flows will be sufficient to fund cash needs. While EBITDA, Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. EBITDA and Adjusted EBITDA do not reflect the impact of earnings or charges resulting from matters that we consider not to be indicative of our ongoing operations. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us for working capital, debt service and other purposes. |
CARTER’S, INC. RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (dollars in millions) (unaudited) |
||||||||||||||||||
The table below reflects the calculation of constant currency net sales on a consolidated and International segment basis for the fiscal quarter ended March 29, 2025: |
||||||||||||||||||
|
Fiscal Quarter Ended |
|||||||||||||||||
|
Reported Net
|
|
Impact of
|
|
Constant-
|
|
Reported Net
|
|
Reported
|
|
Constant-
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consolidated net sales |
$ |
629.8 |
|
$ |
(6.4 |
) |
|
$ |
636.2 |
|
$ |
661.5 |
|
(4.8 |
)% |
|
(3.8 |
)% |
International segment net sales |
$ |
85.3 |
|
$ |
(6.4 |
) |
|
$ |
91.7 |
|
$ |
89.7 |
|
(4.9 |
)% |
|
2.2 |
% |
The Company evaluates its net sales on both an “as reported” and a “constant currency” basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates that occurred between the comparative periods. Constant currency net sales results are calculated by translating current period net sales in local currency to the |
||||||||||||||||||
Note: Results may not be additive due to rounding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250424388062/en/
Sean McHugh
Vice President & Treasurer
(678) 791-7615
Source: Carter’s, Inc.