Factors to Influence Carter's (CRI) This Earnings Season
Carter's, Inc. CRI is scheduled to release third-quarter 2023 earnings on Oct 27, before the opening bell. The branded marketer of apparel, exclusively for babies and children in North America, is likely to witness declines in the top and the bottom lines when it reports third-quarter results.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $786.7 million, indicating a decrease of 3.9% from the figure reported in the year-ago quarter. Also, the consensus estimate for quarterly earnings, which has been unchanged at $1.49 in the past 30 days, suggests a plunge of 11% from the year-ago quarter’s reported figure.
We expect revenues to be down 4.1% from the year-ago quarter’s actual to $785 million and adjusted earnings to decrease 11.5% to $1.49 per share.
The company has a trailing four-quarter earnings surprise of 36.7%, on average. In the last reported quarter, CRI’s bottom line beat the Zacks Consensus Estimate by 25.5%.
Carter's, Inc. Price and EPS Surprise
Carter's, Inc. price-eps-surprise | Carter's, Inc. Quote
Factors to Note
Carter’s has been witnessing higher-than-planned demand in its wholesale business, driven by the strength of product offerings and lower inventory. The company has been implementing several measures, including improved pricing and optimized inventory management, to counteract the impacts of decreased consumer demand.
CRI has been making efforts to reduce inventory levels to improve product sell-throughs, price realization and the gross profit margin. Stronger product offerings, improved on-time shipping performance, and lower ocean freight rates and product costs, is expected to aid sales and earnings in the quarter under review.
The company has been strengthening e-commerce capabilities through investments to speed up deliveries. Some other notable efforts include expanded omnichannel facilities, including curbside pickup, same-day pickup, buy online and pickup at store, and ship from store. These, along with the easy access to a broad array of online products when shopping in stores, bode well.
However, Carter’s has been reeling under inflationary pressure. Also, CRI has been witnessing higher performance-based compensation provisions.
In its last earnings report, management expected third-quarter 2023 sales to be $770-$790 million, whereas it reported $819 million in the second quarter of 2022. Meanwhile, the guidance is in sync with our estimate of $785 million. Adjusted earnings are predicted to be $1.45-$1.55, suggesting a decline from the $1.68 reported in the prior-year quarter but in line with our estimate of $1.49. Adjusted operating income is expected to be $80-$85 million, implying a dip from the $91.6 million recorded in the year-ago quarter.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Carter's this season. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Carter's currently has an Earnings ESP of 0.00% and a Zacks Rank #3.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Caesars Entertainment CZR currently has an Earnings ESP of +37.22% and a Zacks Rank #2. CZR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.92 billion, suggesting 1% growth from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Caesars Entertainment’s third-quarter earnings is pegged at 26 cents, suggesting 8.3% growth from the 24 cents reported in the year-ago quarter. The consensus mark has moved up by 2 cents in the past 30 days.
Marriott International MAR currently has an Earnings ESP of +1.59% and a Zacks Rank #3. MAR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.91 billion, suggesting 11.2% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Marriott’s third-quarter earnings is pegged at $2.09, suggesting year-over-year growth of 23.8%. The consensus mark has moved up by a penny in the past 30 days.
Cinemark Holdings CNK currently has an Earnings ESP of +70.56% and a Zacks Rank #3. The company is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $798.6 million, suggesting 22.8% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Cinemark Holdings’ third-quarter earnings is pegged at 33 cents, suggesting 265% growth from that reported in the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.
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