Carter’s Suspends Outlook After Tariff Shock, Unveils Job Cuts and Store Closures

Overview

• Third-quarter earnings were $0.74 per share, slightly topping estimates, while net sales of $757.84 million missed expectations and margins weakened.
• The company withdrew its fiscal 2025 guidance and warned of a fourth-quarter pre-tax impact of $25 million to $35 million from higher duties.
• Carter’s will eliminate about 300 office roles, or roughly 15%, by year-end 2025, targeting about $35 million in annualized savings beginning in 2026 and booking related charges.
• The retailer increased its store rationalization plan to approximately 150 low-margin North American closures over three years, with management expecting profitability benefits after sales transfer and cost removal.
• Sourcing is shifting toward Vietnam, Cambodia, Bangladesh, and India at roughly 75% of spend in fiscal 2025 with China under 3%, while the company ended the quarter with $184.19 million in cash, paid $9.1 million in dividends, paused buybacks, and saw shares fall about 7% premarket.