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Factors Likely to Decide Carter's (CRI) Fate in Q2 Earnings

Zacks Equity Research
·5-min read

Carter's, Inc. CRI is scheduled to release its second-quarter 2022 earnings on Jul 29, before the opening bell. The Zacks Consensus Estimate for second-quarter revenues is pegged at $758.3 million, indicating an increase of 1.6% from the figure reported in the year-ago quarter.

However, the Zacks Consensus Estimate for second-quarter earnings has moved down by a penny to $1.66 in the past seven days, suggesting a decline of 0.6% from the year-ago quarter’s reported figure.

The branded marketer of apparel, exclusively for babies and children in North America, has a trailing four-quarter earnings surprise of 46.5%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by 23.9%.

Carter's, Inc. Price and EPS Surprise

Carter's, Inc. price-eps-surprise | Carter's, Inc. Quote

Factors to Note

Carter’s has been witnessing drab retail sales stemming from sluggishness in the retail segment. This is likely to have hurt the top line in the quarter under review. Also, adverse impacts of supply-chain headwinds, rising labor costs, marketing investments, and distribution and freight costs remain concerning.

On its last earnings call, management envisioned adjusted earnings of $1.60-$1.80 for the second quarter, down from $1.67 reported in the prior-year quarter. Adjusted operating income was expected to increase $95-$100 million, compared with $107.6 million reported in the prior-year quarter.

However, the company has been benefiting from its solid e-commerce business, driven by expanded omnichannel facilities, including curbside pickup, same-day pickup, buy online and pickup at store and ship from store, along with easy access to a broad array of online products when shopping in stores. Its mobile app has also been performing well.

That said, it remains focused on strengthening its e-commerce capabilities through investments to speed up deliveries. Also, improved price realization and gains from share repurchases are likely to have aided the second-quarter 2022 performance.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Carter'sthis time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Carter's currently has a Zacks Rank #4 (Sell) and an Earnings ESP of -4.22%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat.

Corteva CTVA currently has an Earnings ESP of +8.12% and a Zacks Rank #1. CTVA is anticipated to register top and bottom-line growth when it reports second-quarter 2022 results. The Zacks Consensus Estimate for Corteva’s quarterly revenues is pegged at $6.2 billion, indicating an improvement of 9.4% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Corteva’s bottom line remains unchanged in the past 30 days at $1.46 per share. However, the consensus mark for CTVA suggests growth of 4.3% from the year-ago quarter’s reported figure. CTVA has delivered an earnings beat of 22.3%, on average, in the trailing four quarters.

Kellogg's K currently has an Earnings ESP of +2.01% and a Zacks Rank #3. K is anticipated to register top-line growth when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for Kellogg's quarterly revenues is pegged at $3.64 billion, indicating an improvement of 2.5% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Kellogg's bottom line has been unchanged in the past 30 days at $1.05 per share. However, the consensus mark suggests a decline of 7.9% from the prior-year quarter. K has delivered an earnings beat of 12.8%, on average, in the trailing four quarters.

Tyson Foods TSN currently has an Earnings ESP of +5.71% and a Zacks Rank of 3. The company is likely to register a rise in the top line when it reports third-quarter fiscal 2022 results. The consensus mark for TSN’s quarterly revenues is pegged at $13.4 billion, which suggests a jump of 7% from the figure reported in the prior-year quarter.

The consensus mark for Tyson Foods’ quarterly earnings has moved down from $1.92 to $1.88 per share in the past 30 days. The consensus estimates for TSN’s third-quarter earnings suggest a decline of 30.4% from the year-ago quarter’s reported figure. Tyson Foods delivered an earnings beat of 33.3%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Tyson Foods, Inc. (TSN) : Free Stock Analysis Report
 
Kellogg Company (K) : Free Stock Analysis Report
 
Carter's, Inc. (CRI) : Free Stock Analysis Report
 
Corteva, Inc. (CTVA) : Free Stock Analysis Report
 
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Zacks Investment Research