Carter's Q3 net sales drop 2.5 percent
For the third quarter, Carter’s, Inc. reported 2.5 percent decrease in net sales to 923.9 million dollars, principally driven by a net sales decline in the company’s US wholesale segment, reflecting loss of sales to Toys “R” Us and Bon-Ton, partially offset by growth in the US retail and international segments. The company said, changes in foreign currency exchange rates also adversely affected consolidated net sales by 4.1 million dollars or 0.4 percent. On a constant currency basis, consolidated net sales decreased 2.1 percent in the third quarter of fiscal 2018.
“We did not achieve our growth objectives in the third quarter,” said Michael D. Casey, Carter’s Chairman and CEO in a statement, adding, “Given the improved trend in sales, together with the strength of our fall and holiday product offerings, we are expecting good growth in sales and earnings in the fourth quarter.”
Carter’s says Q3 results below expectations
Operating income in the third quarter decreased 26.9 million dollars or 20.6 percent, to 103.6 million dollars and operating margin decreased 260 basis points to 11.2 percent, compared to 13.8 percent in the third quarter of fiscal 2017. Adjusted operating income decreased 23.8 million dollars or 18.2 percent, to 107.1 million dollars, while adjusted operating margin decreased 220 basis points to 11.6 percent, compared to 13.8 percent in the third quarter of fiscal 2017.
Net income decreased 10.5 million dollars or 12.8 percent, to 71.8 million dollars or 1.53 dollars per diluted share, while adjusted net income decreased 6.7 million dollars or 8.2 percent, to 75.3 million dollars and adjusted earnings per diluted share declined by 5.4 percent to 1.61 dollars.
Carter’s upbeat about Q4, full year results
For the fourth quarter of fiscal 2018, the company projects net sales to increase approximately 5 percent and adjusted diluted earnings per share to increase approximately 10 percent compared to adjusted diluted earnings per share of 2.33 dollars in the fourth quarter of fiscal 2017.
For fiscal 2018, the Company projects net sales to increase approximately 1.5 percent compared to fiscal 2017 and adjusted diluted earnings per share to increase approximately 5 percent compared to 5.77 dollars in fiscal 2017.