Q2 2025 Carter's Inc Earnings Call Transcript
Key Points
- Carter's Inc (CRI) reported a 4% growth in second-quarter sales, driven by US retail and international segments.
- The company has successfully reduced its product development timeline, enhancing its ability to react to consumer preferences.
- Carter's Inc (CRI) has seen positive consumer response to its Baby category, with double-digit sales growth in the second quarter.
- The company is implementing a new fleet segmentation strategy to enhance consumer experience and drive growth.
- Carter's Inc (CRI) has a strong liquidity position with substantial cash on hand and full availability under its credit facility.
- Higher tariffs are expected to have a significant impact on Carter's Inc (CRI)'s business going forward.
- The company's adjusted operating income and earnings per share were down considerably compared to the previous year.
- Gross margin in the second quarter decreased by 200 basis points, primarily due to pricing investments and higher inbound freight rates.
- The effective tax rate in the quarter was unusually high at approximately 74%, impacting profitability.
- Carter's Inc (CRI) has not reinstated guidance due to uncertainty around tariffs and their potential impact on the business.
Welcome to Carter's second quarter fiscal 2025 earnings conference call. On the call are Doug Palladini, Chief Executive Officer and President; Richard Westenberger, Chief Financial Officer and Chief Operating Officer; Kendra Krugman, Chief Product 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 2025 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 expectations 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 posted on our website. In these
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