Overview
- Third-quarter net income fell about 80% year over year to $11.6 million, and the company cited sharply higher duties as a key driver of margin pressure.
- Roughly 150 low-margin stores will close over three years, with about 100 shuttering in fiscal 2025–2026 as leases expire across the U.S., Canada and Mexico, affecting locations that generate about $110 million in annual sales.
- About 300 office-based roles (approximately 15% of staff) will be eliminated by year-end 2025, with fourth-quarter severance and outplacement charges of $4 million to $5 million and expected annualized savings of around $35 million beginning in 2026.
- Carter’s plans to offset costs through price increases, a 20%–30% reduction in product assortment, cost-sharing with vendors and sourcing shifts that put about 75% of 2025 spend in Vietnam, Cambodia, Bangladesh and India while China falls below 3%.
- The company halted new U.S. openings under its current store model and maintained the suspension of fiscal 2025 guidance due to tariff uncertainty, noting prior import duties of about $110 million in 2024.