Carter's

CRI

Specialty Retail · Consumer Cyclical

Price

$38.10

-1.62 (-4.08%)

Market Cap

$1.40B

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−17.6% over 5y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 43.0M (2021) → 35.4M (2026)

Carter's makes clothing for babies and young children. Its main brands are Carter's and OshKosh B'gosh, which sell items like onesies, pajamas, and playwear. It is one of the largest branded sellers of young children's apparel in the United States.

The company makes money by selling clothes through its own retail stores, its website, and wholesale partnerships with large retailers like Target and Walmart. Carter's operates mostly in the United States but also has stores in Canada and sells internationally through partners. Its brand recognition among parents of newborns gives it a steady customer base, but the business faces real pressure from declining U.S. birth rates, which shrinks the pool of potential customers over time.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

YoY Growth Rate

Revenue data limited

EPS Growth

YoY Growth Rate

EPS data limited

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

5.2%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$487M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

43.2%

Healthy — 43.2% gross margin

Operating Margin

9.2%

Modest — 9.2% operating margin

ROCE

5.2%

Weak — 5.2% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+4.9%

Slow sales growth (4.9% YoY)

EPS YoY

-43.9%

Earnings shrinking (-43.9% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

196%

Turns 196% of profit into real cash

FCF Margin

4.3%

Thin free cash flow (4.3%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.76

Moderate — manageable debt (0.76)

Interest Cover

3.71x

Tight — interest eats into profit (3.7x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

15.0x

Fair value — P/E 15.0

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+2.6

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend Yield

2.46%

Moderate income — 2.46% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

-62.3%

Dividend cut (-62.3% YoY) — warning sign

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