Carter's reports 30th consecutive year of sales growth
Atlanta, Georgia-based children’s apparel company Carter’s, Inc., owner of the Carter’s and OshKosh B’gosh brands, announced increases in its fourth-quarter and full-year 2018 sales on Monday, with progress in its US retail segment helping boost the company into its 30th consecutive year of sales growth.
In the fourth quarter ended December 29, 2018, the company’s net sales totaled $1.1 billion, reflecting growth of 5.7% (6.1% in constant currencies) compared to the prior-year period. In the company’s US retail segment, sales increased 7.1% to $606.3 million, while comparable sales rose 5.7%, with progress made in both e-commerce and retail stores. US wholesale also increased 6.5% to $351.4 million. International sales, by contrast, decreased 2.4% to $128.6 million, mainly due to lower demand in China. Operating income for the quarter increased 16.5% to $170.6 million, compared to $146.4 million in the same period in the previous year. Net income, however, was down 4.1% to $130.6 million or $2.83 per diluted share, compared to $136.1 million, or $2.85 per diluted share, in Q4 2017. The company’s full-year 2018 net sales came to $3.5 billion, an increase of 1.8% when compared to fiscal 2017. Once again, the US retail segment led growth, experiencing a 4.3% sales rise to $1.9 billion and a comparable sales increase of 2.8%, principally driven by progress in the company’s e-commerce channel. Sales in the US wholesale segment, on the other hand, were down 2.4% to $1.2 billion, largely due to the effect of the bankruptcies of Toys “R” Us and Bon-Ton earlier in the year. International sales increased 3.6% to $430.4 million over the course of the year thanks to growth in Mexico and Canada, which was again partially offset by lower demand in China. Annual net income declined 6.9% to $282.1 million, or $6.00 per diluted share, compared to $302.8 million, or $6.24 per diluted share, in 2017. This decrease reflects increased expenses related to both wholesale customer bankruptcy charges and the transition of the Carter’s business model in China. For fiscal 2019, the company has issued an outlook predicting net sales growth of between 1% and 2%, while adjusted diluted EPS growth is expected to be between 4% and 6%. “We believe Carter’s is well-positioned to achieve good growth in sales and earnings in the years ahead,” said the company’s chairman and CEO Michael D. Casey in a release. “Carter’s is the market leader in young children’s apparel in North America, and we are extending the reach of our brands throughout the world through e-commerce capabilities and strategic relationships.”
By Robin Driver
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