Is a Beat in Store for Carter's (CRI) This Earnings Season?
Carter's, Inc. CRI is scheduled to release second-quarter 2023 earnings on Jul 28, before the opening bell. The branded marketer of apparel, exclusively for babies and children in North America, is likely to have witnessed declines in the top and the bottom lines when it reports second-quarter results.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $600.4 million, indicating a decrease of 14.3% from the figure reported in the year-ago quarter. Also, the consensus estimate for quarterly earnings, which has increased 4% to 51 cents in the past seven days, suggests a plunge of 60.8% from the year-ago quarter’s reported figure.
We expect revenues to be down 14% from the year-ago quarter’s actuals to $600.4 million and adjusted earnings to decrease 63% to 48 cents per share.
The company has a trailing four-quarter earnings surprise of 25.3%, on average. In the last reported quarter, CRI’s bottom line beat the Zacks Consensus Estimate by 88.5%.
Carter's, Inc. Price and EPS Surprise
Carter's, Inc. price-eps-surprise | Carter's, Inc. Quote
Factors to Note
Carter’s has been implementing several measures, including improved pricing and optimized inventory management, to counteract the impacts of decreased consumer demand. The company increased the mix of longer-life-cycle products, which are less likely to be marked down, and bought fewer units to improve sell-throughs and reduce the mix of low-margin clearance sales. Such endeavors are likely to have aided the second-quarter performance.
The company is constantly seeking ways to improve the online shopping experience. It has also been making efforts to strengthen its e-commerce capabilities through investments to speed up deliveries, along with easy access to a broad array of online products. Strength in its loyalty and private label credit card programs also bodes well. As a result, e-commerce continues to be one of its highest-margin businesses.
The Carter's and OshKosh brands have garnered a strong following across generations, offering compelling value propositions that encompass not only attractive price points but also quality, durability and stylish designs. Carter's exclusive brands — Just One You, Child of Mine and Simple Joys — have been gaining from significant visibility through Target's website, social media and in-store marketing. A partnership with Amazon opened doors to expand Simple Joys globally, also bodes well.
However, Carter’s has been reeling under macroeconomic headwinds, including inflation and muted demand for discretionary items due to lower incomes.
On its last reported quarter’s earnings call, management expected inflationary pressure on consumer demand and a shift of previously planned U.S. wholesale demand from the second quarter to the first quarter of 2023. The company also expected higher interest expenses and a lower average number of shares outstanding in the second quarter of 2023.
What the Zacks Model Unveils
Our proven model conclusively predicts an earnings beat for Carter's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Carter's currently has an Earnings ESP of +7.84% and a Zacks Rank #2.
Stocks With Favorable Combinations
Here are some other companies in the Zacks Consumer Discretionary sector that, too, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
Marriott International MAR currently has an Earnings ESP of +8.44% and a Zacks Rank of 2. The company is likely to register top and bottom-line growth when it reports second-quarter 2023 results. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MAR’s quarterly revenues is pegged at $6.1 billion, suggesting 13.3% growth from the figure reported in the prior-year quarter. The consensus mark for Marriott’s second-quarter earnings is pegged at $2.19 per share, suggesting year-over-year growth of 21.7%. The consensus mark has been unchanged in the past 30 days. MAR has a trailing four-quarter earnings surprise of 8%, on average.
Boyd Gaming BYD currently has an Earnings ESP of +2.92% and a Zacks Rank of 3. BYD is likely to register top and bottom-line growth when it reports second-quarter 2023 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $890.7 million, suggesting 0.4% growth from the figure reported in the prior-year quarter.
The consensus mark for Boyd Gaming’s second-quarter earnings is pegged at $1.56 per share, suggesting 5.4% growth from earnings of $1.48 per share reported in the year-ago quarter. The consensus mark has been unchanged in the past 30 days. BYD has a trailing four-quarter earnings surprise of 13.7%, on average.
Hyatt Hotels H currently has an Earnings ESP of +8.14% and a Zacks Rank #3. H is likely to register top and bottom-line growth when it reports second-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.65 billion, suggesting 11.3% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Hyatt Hotels’ second-quarter earnings is pegged at 83 cents, suggesting an 80.4% improvement from the year-ago quarter’s actual. The consensus mark has moved up by a penny in the past 30 days.
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Marriott International, Inc. (MAR) : Free Stock Analysis Report
Hyatt Hotels Corporation (H) : Free Stock Analysis Report
Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
Carter's, Inc. (CRI) : Free Stock Analysis Report
