Carter’s Inc (CRI)

Carter's Inc.: A Detailed Overview

Company Profile:

History and Background:

Carter's Inc., founded in 1865, boasts a long history spanning over 150 years. Originally known as W. Carter & Sons, the company started as a men's outerwear producer. It transitioned to children's apparel in 1895 and gradually expanded into other product lines like OshKosh B'Gosh and Skip Hop. Today, Carter's is a leading global children's apparel and accessories retailer, operating over 1,000 stores across North America.

Core Business Areas:

Carter's Inc. operates in three core segments:

• Direct Retail: Includes brick-and-mortar Carter's and OshKosh B'Gosh stores along with their respective e-commerce platforms.
• Wholesale: Encompasses selling products to department stores, mass merchants, and specialty stores.
• International: Covers operations outside the United States and Canada.

Leadership and Corporate Structure:

Mike Casey serves as Carter's Chairman and CEO, leading a team of experienced executives in various departments, including merchandising, finance, operations, and marketing. The corporate structure comprises a Board of Directors overseeing the executive team and ensuring company strategy alignment.

Top Products and Market Share:

Top Products:

• Baby and toddler apparel: Carter's offers a wide range of clothing items for infants and toddlers, from everyday essentials like onesies and pajamas to special occasion dresses and outfits.
• Children's apparel: OshKosh B'Gosh focuses on children's wear, catering to sizes 4-14. Their product portfolio includes activewear, denim, dresses, and sleepwear.
• Accessories: Both brands offer a variety of accessories for babies and children, including shoes, socks, hats, and blankets.

Market Share:

• Carter's holds a dominant position in the US baby apparel market with a market share exceeding 25%.
• OshKosh B'Gosh ranks among the top players in the US children's wear market, particularly in the 4-7 age group.

Comparison with Competitors:

Carter's and OshKosh B'Gosh encounter strong competition from other well-established brands like The Children's Place, Gymboree, and GapKids. While Carter's leads in the baby market, competitors pose a challenge in specific age groups or product categories.

Total Addressable Market:

The global children's apparel market is vast, exceeding $230 billion in 2023, with projections reaching over $285 billion by 2028. This demonstrates significant potential for growth in the industry.

Financial Performance:

Recent Financial Statements:

Carter's Inc.'s most recent (2022) financial statements show a revenue of $3.2 billion, an increase of 4.2% compared to 2021. The company reported a net income of $235 million and diluted EPS of $4.14. Gross profit margin stood at 49.3%, while operating margin stood at 12.3%.

Financial Performance Comparison:

Year-over-year, Carter's has shown steady financial growth. Between 2021 and 2022, their top-line and bottom-line both experienced an increase, reflecting continued market success.

Cash Flow and Balance Sheet Health:

The company maintains a healthy cash flow position with positive operating cash flow at $455 million in 2022. The balance sheet exhibits a strong financial position with low debt and a high cash-to-debt ratio.

Dividends and Shareholder Returns:

Dividend History:

Carter's has a history of consistently paying dividends, with a current annual dividend yield of 0.66%. The company has consistently increased dividends over the past several years.

Shareholder Returns:

Shareholders have enjoyed positive returns, with total shareholder return reaching 50% over a three-year period and 23% over the past five years.

Growth Trajectory:

Historical Growth:

In the past five years, Carter's has shown steady revenue growth. This trend reflects an expanding customer base and increasing brand awareness.

Future Growth Projections:

Analysts project stable growth for Carter's in the coming years, with revenue expected to reach $3.4 billion in 2024. Growth potential lies in international expansion, e-commerce growth, and strategic acquisitions.

Recent Initiatives:

Recent efforts like the Carters.com online platform revamp and expansion into new international markets are driving further growth.

Market Dynamics:

Industry Trends:

The children's apparel industry is witnessing several trends, including:

• Increasing demand for sustainable and ethically sourced clothing.
• Growing preference for online shopping.
• Demand for personalization and customization.

Carter's Positioning:

Carter's is well-positioned to capitalize on these trends through ongoing sustainability initiatives, e-commerce investments, and personalized shopping experiences.