Carter's posts decline in Q2 sales and profit
Prachi Singh| Friday, July 24 2020
Carter’s, Inc. net sales for the second quarter decreased 219.5 million dollars or 29.9 percent to 514.9 million dollars. The decline, Carter’s said in a statement, was driven by the closure of the company’s retail stores in the second quarter, particularly during the months of April and May, and decreased sales to certain wholesale customers as a result of disruptions related to Covid-19, partially offset by ecommerce channel growth.
Comparable ecommerce sales in the U.S. and Canada grew 101 percent and 194 percent, respectively. As of the end of the second quarter, approximately 97 percent of the company’s stores in the U.S. and 90 percent in Canada had reopened.
“Thankfully, the disruption to our business due to the pandemic and related store closures was less meaningful than we expected,” said Michael D. Casey, the company’s Chairman and Chief Executive Officer, adding, “By the end of June, substantially all of our stores in the United States had reopened and we saw strong demand for our brands over the July 4th holiday shopping period. We expect gradually improving trends in the performance of our company, relative to the second quarter, in the balance of the year.”
Highlights of Carter’s Q2 results
Operating income for the second quarter was 21 million dollars compared to 64.5 million dollars in the second quarter of fiscal 2019, while adjusted operating income was 41.1 million dollars compared to 63.8 million dollars reflecting the decline in net sales and lower royalty income, partially offset by improved gross margin and lower selling, general, and administrative expenses.
The company added that net income was 8.2 million dollars or 19 cents per diluted share, compared to 43.9 million dollars or 97 cents per diluted share, in the second quarter of fiscal 2019. Adjusted net income was 23.6 million dollars compared to 43.4 million dollars in the second quarter of fiscal 2019 and adjusted earnings per diluted share were 54 cents compared to 95 cents in the second quarter of fiscal 2019.
First half net sales drop 20.7 percent at Carter’s
The company further said that net sales for the first six month period decreased 306.1 million dollars or 20.7 percent to 1.17 billion dollars driven by the closure of the company’s retail stores in the first half of fiscal 2020, particularly during the months of March, April and May, and decreased sales to certain wholesale customersh. Comparable ecommerce sales in the U.S. and Canada increased 53 percent and 110 percent, respectively.
The company posted an operating loss of 57.5 million dollars compared to operating income of 125.2 million dollars in the first half of fiscal 2019. Adjusted operating income was 14.8 million dollars compared to 124.1 million dollars in the first half of fiscal 2019.
The company’s net loss was 70.5 million dollars or 1.64 dollars per diluted share, compared to net income of 78.4 million dollars or 1.72 dollars per diluted share, in the first half of fiscal 2019. The Company posted an adjusted net loss of 11.2 million dollars compared to adjusted net income of 83 million dollars in the first half of fiscal 2019, while adjusted loss per diluted share was 26 cents compared to adjusted earnings per diluted share of 1.82 dollars in the first half of fiscal 2019.