Carter’s (CRI) 4Q15 Results: Beats Forecasts, but Issues Mixed Guidance

Executive Summary

• Carter’s reported 4Q15 revenue of $866.5 million, down 0.3% year over year but beating the consensus estimate of $854.4 million. (There was an additional week in 2014, so 4Q15 revenue was up 5.0% on a 13-week aligned basis.) On a constant-currency basis, revenue increased by 1.0% in the quarter.
• The company reported adjusted EPS of $1.40 for the quarter, up 6.1% year over year and above the consensus estimate of $1.29. The upside was driven by the Carter’s retail and OshKosh retail segments.
• The company provided diluted EPS guidance for 2016 of $4.98–$5.07, up 8%–10% year over year but short of the $5.12 consensus estimate. Revenue is expected to increase by 6%–7% year over year, to $3.19–$3.22 billion, in line with the consensus estimate of $3.20 billion.