Carter's (CRI) Q4 2025 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Fri, February 27, 2026 astatine 9:07 AM CST 47 min read

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Friday, February 27, 2026 astatine 8:30 a.m. ET

• Chief Executive Officer — Douglas C. Palladini

• Chief Financial Officer — Richard F. Westenberger

Douglas C. Palladini: Good greeting and convey you for joining america arsenic we stock our 4th fourth and afloat twelvemonth 2025 results. We are besides going to connection immoderate guidance for the twelvemonth ahead. While we judge the caller quality regarding tariffs volition beryllium nett affirmative for Carter's, Inc., it volition instrumentality immoderate clip for the due level of item to afloat emerge. So our comments contiguous volition exclude that imaginable tariff impact. As I attack 1 twelvemonth successful relation successful April and bespeak connected 2025, it is becoming wide that respective of the themes I person consistently highlighted are coming to life.

As Carter's, Inc. returns to maturation that is semipermanent sustainable and profitable, we proceed to acquisition momentum successful our business, doing what is close for our brands and consumers, which is yielding improved fiscal outcomes. As I qualify the benignant of prime maturation we privation astatine Carter's, Inc., I americium specifically talking astir decreasing promotional enactment implicit time, increasing our quality to terms up and to merchantability higher priced products overall, and balancing our transactional messaging with much emotion-driven merchandise and marque storytelling that builds user connectivity and loyalty. We are creating caller products that are genuinely resonating with consumers crossed each 5 brands led by the Carter's, Inc. namesake, embodying holistic value, including benignant and quality, not conscionable price.

In Q4, among our DTC channels, each apparel brands and each property segments grew versus past year. Our brands are progressively attracting caller consumers, peculiarly among Gen Z and millennial families, with caller fans leaning into our amended and champion merchandise offerings, with higher terms points. We are validating what we judge are the equity and pricing powerfulness of our brands. Importantly, these recently acquired consumers are demonstrating the imaginable for higher beingness value, an indispensable gathering artifact towards sustained affirmative results. Productivity has besides been a accordant theme. We person taken indispensable and decisive actions to rationalize our store fleet, rightsize our workforce, and trim complexity passim the organization.

As we admit the benefits of enhanced productivity, we instrumentality to investing wherever we tin make the top returns, including successful merchandise make, which provides the plan and benignant consumers expect and appreciate, and successful request instauration to thrust store and ecommerce traffic. For the archetypal clip since 2021, Carter's, Inc. grew year-over-year revenue, adjacent excluding the 53rd week of sales. We besides executed our 3rd consecutive 4th of retail comp growth, and we did truthful with higher AURs and little promotion. Consumer counts besides continued to grow, arsenic we pull caller Gen Z fans who are selecting from our champion merchandise assortments astatine higher rates than existing consumers. These are each beardown signals that our actions are generating results.