Carter’s posts 8% sales growth as U.S. retail momentum continues

Carter’s (NYSE:CRI), the leading provider of apparel for babies and young children in North America, reported a steady start to fiscal 2026, characterized by robust consumer demand within its direct-to-consumer channels.

The Atlanta-based company saw net sales rise to $681 million for the first quarter, an 8.1% increase compared to $630 million in the same period last year.

A primary driver of the quarter’s performance was the U.S. Retail segment, which posted a 10.5% increase in comparable sales.

This marks the fourth consecutive quarter of growth for the segment, suggesting sustained brand strength despite a competitive retail landscape.

On the profitability front, Carter’s reported a GAAP operating margin of 4.2%, a slight improvement from the 4.1% recorded in the first quarter of 2025.

However, the adjusted operating margin fell to 4.2% from 5.6% in the prior-year period, reflecting a shift in the promotional environment and higher operational costs.

Diluted earnings per share (EPS) for the quarter were $0.39, down from $0.43 a year ago, while adjusted diluted EPS stood at $0.39 compared to $0.66 in the first quarter of 2025.

During the quarter, the company remained committed to its shareholder return program, distributing $9 million in dividends.

Management highlighted the strength of the balance sheet as a key factor in its ability to navigate market volatility while investing in its digital and physical retail presence.