Carter's, Inc. CRI is expected to report top-line growth when it reports first-quarter 2026 results. The branded marketer of apparel, exclusively for babies and children in North America, is likely to witness a decline in the bottom line in the quarter to be reported.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $662 million, indicating a rise of 5.1% from the figure reported in the year-ago quarter. The consensus estimate for quarterly earnings is pegged at seven cents per share, down from 30 cents per share 30 days ago. This also indicates a decline from 66 cents in the year-earlier quarter.
The company has a negative trailing four-quarter earnings surprise of 7.3%, on average. In the last reported quarter, CRI’s bottom line surpassed the Zacks Consensus Estimate by 11.8%.
Factors to Note For CRI’s Quarterly Performance
Carter’s is likely to have benefited from its leading position in the baby and children’s apparel market, with strong brand recognition, a wide distribution network and a focus on quality and value-driven products. Also, measures like improved pricing, optimized inventory management and robust e-commerce capabilities have been acting as tailwinds. The company’s direct-to-consumer strategy strengthens its position by boosting margins, deepening customer relationships and generating valuable consumer insights.
Carter’s has been undertaking significant productivity and cost optimization efforts. The company is streamlining its operations by reducing organizational complexity, rightsizing its workforce and simplifying its product assortment. Additionally, Carter’s benefits from a diversified distribution network that includes retail stores, e-commerce platforms and wholesale partnerships with major department stores and online retailers.
Product innovation remains another key focus area for CRI. The company has been ramping up investments in product development to improve the quality, design and overall appeal of its offerings. The strong performance of core categories, especially baby apparel, underscores the effectiveness of this strategy. By consistently delivering better and more compelling products, the company is reinforcing its ability to command higher prices while also enhancing overall brand perception.
For the first quarter of 2026, Carter’s anticipates double-digit sales growth in the International segment, largely driven by continued strength in Mexico and Canada. We expect sales growth of 8.7% for the Retail and 10.6% for the International segments in the first quarter. For the first quarter of 2026, Carter’s anticipates net sales growth in the mid-single-digit percentage from $630 million seen in the year-earlier quarter.
However, Carter's continues to operate in a challenging macroeconomic and retail landscape, marked by constrained discretionary spending, which has been weighing on apparel demand. The company has been witnessing selling, general and administrative (SG&A) expenses on higher store-based expenses, including labor and occupancy costs, as well as increased marketing investment. Our model anticipates SG&A expenses to grow 3% for the first quarter of 2026. In addition, heightened tariff pressures have been acting as deterrents. Tariffs are likely to weigh more heavily on profitability in the first half of 2026.
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 before they’re reported with our Earnings ESP Filter.
Carter's currently has an Earnings ESP of 0.00% and a Zacks Rank of 1.
Carter's, Inc. Price and EPS Surprise
Carter's, Inc. price-eps-surprise | Carter's, Inc. Quote
Valuation Picture
From a valuation perspective, Carter’s offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 12.10x, which is below the five-year high of 21.14x and the Shoes and Retail Apparel industry’s average of 21.33x, the stock offers compelling value for investors seeking exposure to the sector.
The recent market movements show that CRI’s shares have risen 2% in the past three months compared with the industry's 25.9% decline.
Stocks Poised to Beat Earnings Estimates
Here are some companies, which according to our model, have the right combination of elements to post an earnings beat:
Cimpress plc CMPR currently has an Earnings ESP of +6.67% and sports a Zacks Rank of 1. CMPR is likely to register top and bottom-line growth when it reports third-quarter fiscal 2026 results. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its quarterly revenues is pegged at $861.8 billion, indicating a 9.2% increase from the figure reported in the year-ago quarter. The consensus estimate for CMPR’s fiscal third-quarter earnings is pegged at 15 cents per share, implying a 145.5% surge from the year-ago quarter’s actual. The consensus mark has fallen 11.8% in the past 30 days.
Marriott International, Inc. MAR currently has an Earnings ESP of +4.03% and a Zacks Rank of 3. MAR is likely to register top and bottom-line growth when it reports first-quarter 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $6.58 billion, indicating 5% growth from the figure reported in the year-ago quarter.
The consensus estimate for MAR’s first-quarter earnings is pegged at $2.59 a share, implying 11.6% growth from the year-earlier quarter. The consensus mark has moved up 0.8% in the past seven days.
Boyd Gaming BYD currently has an Earnings ESP of +0.09% and a Zacks Rank of 3. BYD is likely to register a top-line decline when it reports first-quarter 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $990.8 million, indicating a 0.1% drop from the figure reported in the year-ago quarter.
The consensus estimate for Boyd Gaming’s first-quarter earnings is pegged at $1.75 a share, implying 8% growth from the year-earlier quarter. The consensus mark has been stable in the past 30 days.
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This article originally published on Zacks Investment Research (zacks.com).