Carter’s posts drop in Q1 sales, profit
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Business
US kidswear retailer Carter’s has reported a 10.9 percent drop in Q1 sales as its profits narrowed.
The company made net sales of 695.9 million dollars in the first quarter of the year, down from 781.3 million dollars a year earlier. It said the drop was linked to macroeconomic factors, including inflation, which drove consumer demand down.
The company’s net income in the quarter narrowed to 36 million dollars from 67.9 million dollars the prior year.
“We exceeded our first quarter sales and earnings objectives,” chair and CEO Michael D. Casey said in a statement.
He continued: “We saw higher than planned demand from some of our largest wholesale customers eager to receive our new Spring product offerings in preparation for the shift to warmer weather outfitting. Our retail and international sales were in line with our plans.
“On-time deliveries of our product offerings sourced from Asia improved to the best performance we have experienced since the pandemic began and enabled us to support earlier than planned demand.”
Carter’s confirms FY outlook
Casey said that in the first quarter inflation began to “meaningfully weigh on families with young children and their demand for our brands last year”.
He continued: “To mitigate the effects of lower consumer demand, we have focused on reducing discretionary spending and improving price realization, largely driven through better inventory management. As a result, earnings and cash flow from operations exceeded our expectations in the first quarter.”
The company reaffirmed its full-year outlook following its first-quarter results. The retailer expects net sales of 3 billion dollars and adjusted operating income of 350 million dollars.
Casey continued: “Given a good start to the year, we are reaffirming our previous guidance for sales and earnings for 2023. With time, we expect inflation will decrease to more acceptable levels, the burden of lower real wages affecting families with young children will moderate, and demand for our brands will improve.”