DOW JONES NEWSWIRES
Carter's Inc. (CRI) said Tuesday its second-quarter profit
quadrupled as the company said it cut back on inventory and costs
while seeing sales and margins rise again.
Shares rose 6.6% to $28.70 in after-hours trading as the
children's apparel maker blew away expectations and delivered
confidence on the rest of the year.
"Our outlook for the year has improved based on our first-half
performance and the growth we anticipate in the second half of the
year," said Chief Executive Michael Casey.
Carter's expects third-quarter adjusted earnings per share to
grow by mid- to high-single digits and for revenue to increase in
the low-single digits. Analysts estimated earnings will rise 2% to
61 cents a share and revenue would climb 1% to $441 million.
The company's sales have held up better than most retailers as
parents - and grandparents - continue to buy baby clothes while
they cut back on their own. Demand also has natural support because
babies grow quickly.
To help shoppers on a budget, Carter's has introduced more
mix-and-match products that can be worn for different occasions and
matched with other outfits. The company also has laid off 10% of
its corporate work force, closed facilities and made other
cuts.
In the latest quarter, the company reported a profit of $11.3
million, or 19 cents a share, up from $2.8 million, or 5 cents a
share, a year earlier. Excluding restructuring and other charges,
earnings rose to 23 cents a share from 10 cents.
Revenue rose 5.4% to $317.9 million as same-store sales climbed
8.1%.
In April, Carter's predicted a second-quarter profit of as much
as 3 cents with revenue flat to down slightly.
Gross margin rose to 36.6% from 33%.
The company's once high-flying OshKosh B'Gosh line, for
toddlers, which sustained losses in 2007 and early 2008, saw sales
rise 8.1%. Mass-channel sales, composed of sales of the Child of
Mine brand to Wal-Mart Stores Inc. (WMT) and Just One Year brand to
Target Corp. (TGT), decreased 13.4%, while wholesale sales climbed
6.1%.
-By David Benoit and Kathy Shwiff, Dow Jones Newswires;
212-416-2357; Kathy.Shwiff@dowjones.com