Changes in foreign currency exchange rates during H1 FY23 unfavourably affected consolidated net sales by around $3.3 million, or 0.2 per cent. Operating income decreased significantly by 47.3 per cent or $84.1 million to $93.9 million, compared to $178 million in H1 FY22, driving the operating margin down to 7.2 per cent from 12 per cent, the company said in a press release.

Adjusted operating income, a non-GAAP measure, saw a similar decrease, falling by 46.4 per cent or $82.6 million to $95.5 million in H1 FY23. The adjusted operating margin also declined to 7.4 per cent from 12 per cent in H1 FY22.

In terms of profitability, net income amounted to $59.9 million, or $1.59 per diluted share, in H1 FY23, compared to $104.9 million, or $2.59 per diluted share, in H1 FY22. Adjusted net income, another non-GAAP measure, stood at $61 million, significantly lower than the $120.1 million reported in H1 FY22. Accordingly, adjusted earnings per diluted share declined to $1.62 from $2.97 in the previous fiscal year's first half.

In the second quarter (Q2) of FY23, Carter's reported a 14.3 per cent decrease in net sales to $600.2 million, compared to $700.7 million in Q2 FY22. Operating income decreased by 50.2 per cent to $37.6 million, and net income was $23.9 million, or $0.64 per diluted share. Adjusted net income was $24.2 million, with adjusted earnings per diluted share at $0.64, down from $1.30 in the corresponding quarter of the previous year, the release added.

“We achieved our second quarter sales and earnings objectives,” said Michael D. Casey, chairman and chief executive officer. “For the third consecutive quarter, we saw higher than planned demand in our wholesale business driven, we believe, by the strength of our product offerings and leaner inventory positions.”

Fibre2Fashion News Desk (DP)