Yahoo Finance Factors Likely to Decide Carter's (CRI) Fate in Q4 Earnings
Carter's, Inc. CRI is scheduled to release fourth-quarter 2022 earnings on Feb 24, before the opening bell. The branded marketer of apparel, exclusively for babies and children in North America, is likely to witness a decline in the top and bottom lines when it reports fourth-quarter results.
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $869 million, indicating a decline of 18.2% from the figure reported in the year-ago quarter. The Zacks Consensus Estimate for fourth-quarter earnings has been unchanged at $1.74 in the past 30 days, suggesting a fall of 24.7% from the year-ago quarter’s reported figure.
For 2022, the consensus mark for earnings is pegged at $6.37, suggesting a decline of 19.1% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. The Zacks Consensus Estimate for the company’s 2022 revenues is pegged at $3.2 billion, suggesting a 9.1% decline from the prior-year quarter’s reported figure.
We expect the company’s fourth-quarter revenues to decline 18.5% year over year to $865.7 million and the bottom line to decrease 28% to $1.66 per share. For 2022, we estimate a revenue decline of 9.2% to $3,166.3 million and earnings per share decrease of 19.9% to $6.30.
The company has a trailing four-quarter earnings surprise of 4.5%, on average. In the last reported quarter, CRI’s bottom line beat the Zacks Consensus Estimate by 1.2%.
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 sales across the U.S. Retail, U.S. Wholesale and International divisions. Inflationary pressure leading to a surge in gas and food prices and slowed demand for its brands have been hurting its performance. Also, increased ocean freight rates and distribution expenses are likely to have hurt margins in the fourth quarter.
On its last reported quarter's earnings call, the company projected net sales of $845-$885 million for fourth-quarter 2022. Management envisioned adjusted earnings of $1.40-$2.00, down from $2.31 reported in the prior-year quarter. Adjusted operating income is expected to be $85-$115 million, suggesting a decline from $137.9 million reported in the year-ago quarter.
The fourth-quarter outlook reflects a tough macroeconomic environment, with U.S. Retail comparable sales expected to decline 10-15%. Moreover, U.S. Wholesale and International comparable sales are expected to decline.
Carter’s projected 2022 net sales of $3.145-$3.185 billion, with adjusted earnings per share of $6.05-$6.65. Adjusted operating income is forecast to be $355-$385 million for 2022.
We expect fourth-quarter 2022 sales to decline 16.3%, 22.2% and 19.5%, respectively, for the U.S. Retail, U.S. Wholesale and International divisions. For 2022, the aforementioned segments are expected to report sales decline of 12.7%, 5.3% and 4.2%, respectively.
However, Carter’s continues to gain from efforts to strengthen e-commerce capabilities through investments to speed up deliveries. 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, are likely to have been encouraging. Its mobile app has also been performing well for a while.
Improved price realization and gains from share repurchases are likely to have been tailwinds. Recovery in its stores, owing to improved tourism and improved price realization, bodes well.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Carter's this 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, as elaborated below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Carter's currently has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).
Stocks With Favorable Combination
Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
NIKE NKE currently has an Earnings ESP of +7.19% and a Zacks Rank of 3. NKE is likely to register top-line growth when it reports third-quarter fiscal 2023 earnings. The Zacks Consensus Estimate for quarterly revenues is pegged at $11.4 billion, suggesting 4.6% growth 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 NIKE’s earnings for the fiscal third quarter is pegged at 50 cents, suggesting a 42.5% decline from 87 cents reported in the year-ago quarter. The consensus mark has moved down by a penny in the past seven days. NKE delivered an earnings beat of 15.8%, on average, in the trailing four quarters.
PVH Corp PVH currently has an Earnings ESP of +0.71% and a Zacks Rank of 3. PVH is expected to register top and bottom-line declines when it reports fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for PVH’s quarterly revenues is pegged at $2.34 billion, suggesting a decline of 3.8% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for PVH’s quarterly earnings has moved up by a penny in the past 30 days. The consensus estimate for earnings suggests a decline of 42.3% from the year-ago quarter’s reported number. PVH delivered an earnings beat of 22.9%, on average, in the trailing four quarters.
Planet Fitness PLNT currently has an Earnings ESP of +0.39% and has a Zacks #3. PLNT is anticipated to register top and bottom-line growth when it reports fourth-quarter 2022 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $269.1 million, indicating an improvement of 46.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Planet Fitness’ earnings of 47 cents per share has been unchanged in the past 30 days. The consensus estimate suggests growth of 80.8% from 26 cents reported in the year-ago quarter. PLNT delivered an earnings beat of 6.6%, on average, in the trailing four quarters.
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