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Shares of Carter’s (NYSE:CRI) tumbled Friday after the company missed third-quarter earnings and revenue estimates.
The apparel company posted earnings of $1.67 per share on revenue of $819 million. Analysts expected earnings per share of $1.73 on revenue of $856.01 million. Operating income was $92 million. The year-over-year $72 million, or 8.1% decline in net sales, was put down to reductions in the company’s U.S. Retail, International, and U.S. Wholesale sales of 12.3%, 6.7%, and 1.9%, respectively. In addition, U.S. Retail comparable net sales declined by 11%.
The company said “historic and persistent inflation” has continued to weigh on demand for its brands.
“Real wages are lower, gas and food prices remain elevated and many families have struggled to find baby formula given shortages this past year. The global recovery from the pandemic that began last year, and enabled Carter’s to achieve record profitability in 2021, has been disrupted by inflation and lingering supply chain delays,” commented Michael Casey, Chairman and Chief Executive Officer of Carter’s Inc. “Our supply chain performance continued to improve in the third quarter, but on-time deliveries are not yet back to pre-pandemic levels due to port congestion on the East Coast.”
Looking ahead, the company reduced the full-year 2022 net sales expectations to approximately $3.145 billion to $3.185 billion from previous guidance of $3.25 billion to $3.3 billion. Adjusted EPS is seen around $6.05 to $6.65, down from the previous guidance range of $7.10 to $7.60.
Carter’s shares are down over 6% at the time of writing.
