Carter’s, an American marketer of children's apparel, has reported a decline in net sales by $70.2 million, or 5.4 per cent, bringing total sales to $1.23 billion in the first half of fiscal 2024 (FY24), compared to $1.30 billion in the same period of fiscal 2023 (FY23).

Segment-wise, net sales saw a decrease of 7.6 per cent in the US retail segment, 2.1 per cent in the US wholesale segment, and 6.1 per cent in the international segment. Additionally, US retail comparable net sales declined by 9.2 per cent, the company said in a press release.

Despite the drop in sales, Carter’s reported an increase in operating income by $0.6 million, or 0.6 per cent, to $94.5 million, compared to $93.9 million in H1 FY23. The operating margin improved to 7.7 per cent, up from 7.2 per cent in the previous year. The adjusted operating income, a non-GAAP measure, saw a slight decrease of $1 million, or 1 per cent, totalling $94.5 million, compared to $95.5 million in H1 FY23. The adjusted operating margin rose to 7.7 per cent from 7.4 per cent in the prior year.

Net income for H1 FY24 was reported at $65.7 million, or $1.80 per diluted share, an increase from $59.9 million, or $1.59 per diluted share, in H1 FY23. Adjusted net income, a non-GAAP measure, was $65.7 million, up from $61 million in the same period last year. Adjusted earnings per diluted share also increased to $1.80 from $1.62 in H1 FY23.

For the second quarter of FY24, Carter’s reported a net sales decrease of $35.8 million, or 6 per cent, to $564.4 million, down from $600.2 million in the second quarter of FY23. The US wholesale segment net sales increased by 3.2 per cent, while the US retail and international segment net sales declined by 10.3 per cent and 9.6 per cent, respectively. US retail comparable net sales saw a decline of 11.7 per cent.

Operating income for Q2 FY24 rose by $1.9 million, or 5 per cent, to $39.5 million, compared to $37.6 million in Q2 FY23. The operating margin increased to 7.0 per cent, up from 6.3 per cent in the same period last year. Adjusted operating income, a non-GAAP measure, increased by $1.5 million, or 4.0 per cent, totalling $39.5 million, compared to $37.9 million in Q2 FY23. The adjusted operating margin also improved to 7.0 per cent from 6.3 per cent in the prior year period.

Net income for Q2 FY24 was $27.6 million, or $0.76 per diluted share, up from $23.9 million, or $0.64 per diluted share, in Q2 FY23. Adjusted net income, a non-GAAP measure, was $27.6 million, compared to $24.2 million in the same quarter last year. Adjusted earnings per diluted share increased to $0.76 from $0.64 in Q2 FY23.

“The quarter got off to a slow start in April with the earlier Easter holiday and late arrival of warmer weather. Sales trends improved in the months that followed. Despite a highly promotional market, we achieved a record gross profit margin which reflects the strength of our product offerings, and lower inbound freight and product costs,” said Michael D Casey, chairman and chief executive officer.

Fibre2Fashion News Desk (DP)