Carter's Exceeds Q2 Earnings Outlook Amid Tariff Recovery
Carter’s Inc. (NYSE:CRI) reported second-quarter fiscal 2026 results that exceeded its prior outlook, with net sales rising to $615 million and adjusted operating income increasing by 54% year-over-year to $18 million. The company benefited from strong U.S. retail comparable-sales growth, robust wholesale demand, cost savings, and a significant tariff recovery of $132 million in previously paid tariffs and related interest. Despite the positive results, Carter’s narrowed its full-year sales guidance to 2%–3%, citing softer second-half wholesale demand and cautious consumer pricing. The company maintained its adjusted operating-income growth forecast but raised its operating-cash-flow guidance to between $230 million and $240 million for fiscal 2026. New CEO Sharon Price John emphasized the importance of data-driven decision-making, brand building, and adapting to changing consumer behavior as key priorities. The tariff recovery was taxable, resulting in a $30 million tax provision expected to be paid in September.
Tickers: $CRI
Topics: adjusted_income financial_results sales_growth tariff_impact