Carter’s, Inc. CRI, a seasoned player in the apparel market, is gearing up to unveil their fourth-quarter 2023 financial report on Feb 27, as the market eagerly awaits. With a primary focus on the baby and children’s niche in North America, the upcoming results are anticipated with a mix of curiosity and caution. The forecast indicates a slight dip in revenue figures, with the Zacks Consensus Estimate pegged at $869 million, showcasing a 4.7% decrease from the previous year’s stats. Nevertheless, the consensus points toward a positive trajectory in quarterly earnings, locked in at $2.55 per share, painting an 11.4% increase year-over-year.
A closer look reveals a consistent earnings surprise trend, averaging at 42.3% over the past four quarters. The most recent financial disclosure witnessed the company outstripping the Zacks Consensus Estimate by a resounding 23.5%.
Exploring Key Drivers
Carter’s has been navigating through a landscape marked by robust demand in their wholesale sector, attributed to compelling product assortments and optimized inventory levels. The company’s strategic ventures include refined pricing strategies and enhanced inventory management techniques to counteract the impact of wavering consumer demand. Efforts to curtail inventory levels drive a push towards improved product sell-throughs, boosting the profit margin calculus.
The quarter under review is expected to benefit from superior product offerings, streamlined shipping practices, and favorable cost dynamics – encapsulating a narrative of growth and resilience amidst economic headwinds.
Investments towards bolstering their e-commerce infrastructure underline the company’s commitment to keeping pace with shifting consumer preferences. Initiatives like omnichannel upgrades and convenient delivery options are poised to offer patrons a seamless shopping experience, reflecting a customer-first ethos pivotal to staying competitive in today’s retail landscape. Management’s outlook for alleviating demand trends in the latter half of 2023 signals a prudent stance towards inflationary pressures, reassuring stakeholders of a steady ship.
Despite riding the wave of success, Carter’s has encountered inflation-induced strains, compounded further by escalating performance-based compensation outlays. The management’s forward guidance for Q4 2023 projects net sales in the range of $862-$877 million, reflecting a dip from the $912 million reported in the same period last year. Adjusted earnings are slated at $2.50-$2.72 per share.
Zacks Model Insights
The Zacks model wades through the data maze to present a mixed forecast for Carter’s Q4 earnings. While a favorable concoction of a positive Earnings ESP coupled with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) typically hints at a probable earnings beat, the current reality appears less clear-cut. Uncover market gems before the verdict with our Earnings ESP Filter.
Visualizing Carter’s Journey
Carter’s, Inc. price-eps-surprise | Carter’s, Inc. Quote
Presently, Carter’s exhibits an Earnings ESP of -1.96% alongside a Zacks Rank of 2.
Earning Leaders on the Horizon
Diving into the realm of anticipated success stories, our analysis highlights a few contenders poised to excel in this earnings cycle:
lululemon athletica [Ticker: LULU] boasts a promising Earnings ESP of +0.29%, paired with a Zacks Rank of 2. The apparel giant is projected to witness a double-digit surge in both revenue and earnings, with an estimated 15% growth in quarterly revenues. The consensus anticipates earnings per share at $4.99, marking a healthy 13.4% uptick from the previous year.
NIKE [Ticker: NKE], equipped with an Earnings ESP of +5.39% and a Zacks Rank of 3, braces for a slight dip in revenue metrics for the upcoming quarter. The consensus earmarks a 0.3% decrease in quarterly revenues, alongside an 8.9% decline in earnings per share from the prior period.
Planet Fitness [Ticker: PLNT] stands tall with an Earnings ESP of +2.04% and a Zacks Rank of 3, indicating a possible growth trajectory for the fourth quarter of 2023. Projections hint at an uptick in both top-line and bottom-line figures, underpinned by a 0.8% gain in quarterly revenues and a 9.4% surge in earnings per share.
Keep abreast of forthcoming market movements with the Zacks Earnings Calendar.
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The viewpoints depicted here reflect the author’s standpoint and may differ from those of Nasdaq, Inc.
