GET DAILY SIGNALSCarter's (CRI) Q3 Earnings Preview: Guidance, Risks, and What to Watch
Key Takeaways
- Carter's, Inc. (CRI) is expected to report its third-quarter fiscal 2026 results in late October 2026, with Wall Street consensus pointing to adjusted earnings per share (EPS) of roughly $0.85.
- The company guided third-quarter net sales to approximately $750 million, modestly below the $758 million reported in the prior-year period, alongside adjusted operating income of about $50 million.
- Heading into the report, Carter's is coming off a strong second quarter, when adjusted EPS of $0.26 far exceeded consensus and U.S. Retail comparable sales grew for a fifth consecutive quarter.
- Key themes to watch include tariff costs, price-sensitive consumer spending, e-commerce momentum, and the strength of the core baby-products business.
- Management has flagged a more value-conscious consumer and lighter second-half wholesale demand, tempering its full-year sales outlook.
- For more context, review Carter's Major News, Today's Price Move, Price Targets, and Forecast pages.
Earnings Context and Why It Matters
Carter's is North America's largest apparel company focused exclusively on babies and young children, operating well-known brands such as Carter's, OshKosh B'gosh, and Skip Hop. Its third-quarter earnings offer investors a timely read on consumer spending on children's products ahead of the critical holiday season. The report follows a strong second quarter in which net sales rose 5.2% and adjusted EPS trounced expectations, extending a streak of comparable-sales gains. Because Carter's sells across retail, wholesale, and international channels, the results provide broad insight into demand, inventory discipline, and tariff pressures affecting the broader apparel sector. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Earnings Expectations
Analysts expect Carter's to report adjusted earnings per share (EPS) of approximately $0.85 for the third quarter of fiscal 2026, up from $0.74 in the same period a year ago. The company's own guidance calls for net sales of nearly $750 million, compared with $758 million in the prior-year quarter, and adjusted operating income of roughly $50 million, up from $39 million last year.
Investors will also watch segment-level performance. In the second quarter, U.S. Retail comparable sales rose 5.1%, U.S. Wholesale sales climbed 11.7%, and International sales grew 2.7%. E-commerce comparable sales increased at a double-digit rate, a trend the company has credited to improved digital capabilities. Tariff costs remain a central concern: incremental tariffs reduced second-quarter gross profit by about $28 million before mitigation efforts, and management has noted the potential for higher rates under new Section 301 tariffs.
Market Reaction and Investor Sentiment
Sentiment heading into the report reflects a mix of optimism over Carter's recent execution and caution about a softer consumer environment. The stock has rallied in recent months, supported by improving retail trends and productivity initiatives, but management has moderated its full-year sales outlook to growth of 2% to 3%, citing lighter second-half wholesale demand and more conservative customer commitments. Key risk factors include ongoing tariff uncertainty, a value-conscious consumer showing price resistance, and potential promotional pressure during the holiday season. Investors will be watching whether adjusted EPS lands in line with guidance and whether comparable-sales momentum in U.S. Retail can be sustained.
Forward Outlook and Key Factors to Monitor
Beyond the headline figures, investors should focus on several forward-looking signals in Carter's report. First, watch comparable-sales trends across U.S. Retail and e-commerce. The company has now delivered five consecutive quarters of comparable-sales growth, and sustaining that momentum would support the case that its digital and marketing investments are paying off.
Second, monitor gross margin. Incremental tariff costs and investments in product quality pressured margins in recent quarters, and management expects a lower gross margin for the full year, partially offset by pricing actions and productivity savings. Any update on tariff mitigation or sourcing changes will be closely read.
Finally, pay attention to inventory levels and management's commentary on holiday demand. Carter's ended the second quarter with inventories down 6.7% year over year, a sign of disciplined stock management. Guidance on fourth-quarter sell-through, promotional activity, and wholesale order flow will help investors gauge whether the company's turnaround can carry into the holiday season and into fiscal 2027.
Research Tools That Support My Analysis
I regularly use Tickeron’s AI Screener to quickly filter apparel names and spot patterns that might otherwise take hours to identify manually. It has become a reliable part of my routine when preparing for earnings like this one, helping me compare CRI against peers on both technical and fundamental metrics in a single view.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
CRI's RSI Oscillator ascends from oversold territory
The RSI Oscillator for CRI moved out of oversold territory on September 21, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 32 similar instances when the indicator left oversold territory. In 26 of the 32 cases the stock moved higher. This puts the odds of a move higher at 81%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 21, 2026. You may want to consider a long position or call options on CRI as a result. In 58 of 96 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 60%.
The Moving Average Convergence Divergence (MACD) for CRI just turned positive on September 21, 2026. Looking at past instances where CRI's MACD turned positive, the stock continued to rise in 41 of 55 cases over the following month. The odds of a continued upward trend are 75%.
CRI moved above its 50-day moving average on October 22, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +7.00% 3-day Advance, the price is estimated to grow further. Considering data from situations where CRI advanced for three days, in 194 of 307 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
The Aroon Indicator entered an Uptrend today. In 117 of 189 cases where CRI Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 62%.
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The 50-day moving average for CRI moved below the 200-day moving average on September 18, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CRI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 74%.
CRI broke above its upper Bollinger Band on October 06, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 32 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.212) is normal, around the industry mean (1.839). P/E Ratio (6.330) is within average values for comparable stocks, (12.245). Projected Growth (PEG Ratio) (0.070) is also within normal values, averaging (0.517). Dividend Yield (0.029) settles around the average of (0.064) among similar stocks. P/S Ratio (0.346) is also within normal values, averaging (0.652).
The Tickeron SMR rating for this company is 46 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 57 (best 1 - 100 worst), indicating steady price growth. CRI’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 73 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CRI’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 86, placing this stock worse than average.
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General Information
a provider of apparel and related products for babies and young children
Industry ApparelFootwearRetail
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