Carter’s ( NYSE: CRI ) stock slid sharply on Friday after providing a far lighter than anticipated earnings forecast for first quarter and year ahead.
For the fourth quarter reported on Friday, the Atlanta-based retailer notched $2.29 in earnings per share, $0.49 better than analysts anticipated. Meanwhile, a 17.1% drop in revenue to $912M was a smaller decline than the Street had anticipated. US comparable sales fell 12.9% year over year.
“We saw stronger than expected demand for our brands in the final months of the year which enabled Carter’s to achieve its fourth quarter sales and earnings objectives,” CEO Michael D. Casey said. “Our supply chain performance improved meaningfully in the second half of 2022, enabling a stronger product offering for holiday shoppers and better on-time deliveries of our new Spring product offerings. Despite a very promotional market, we improved price realization in the fourth quarter which, together with lower spending and better inventory results, drove higher than expected cash flow.”
However, he warned that “inflation will continue to weigh on consumers” in 2023. Additionally, Casey said that wholesale customers are carefully managing inventory commitments.
For the first quarter, the company projected between $630M to $650M in net sales, far below the consensus of $705.69M. Additionally, a forecast of between $0.35 to $0.55 in adjusted diluted earnings per share fell significantly short of the $1.23 analyst consensus.
For the full year, net sales are expected to reach $3B, down from $3.2B in 2022 and below the consensus of $3.19B. An adjusted diluted EPS forecast of $6.15 also disappointed in comparison with the $6.52 Street consensus.
Shares of Carter’s Inc. ( CRI ) slid 3.7% shortly before Friday’s market open.
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Carter’s stock slips as 2023 forecasts fall well short of expectations