Carter's Inc. Common Stock (CRI)

FairStock Score: 52/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I look first at durability and price. Carter's sells childrenswear under recognized brands, which gives it some repeat purchase and shelf space, but it is still a consumer-cyclical apparel retailer with modest pricing power. The filed numbers show erosion: in fiscal 2025, the year ended 2026-01-03, revenue was $2.9B, net income $91.8M, and diluted EPS $2.53, down from net income $185.5M and EPS $5.12 in fiscal 2024, the year ended 2024-12-28, and $232.5M and $6.24 in fiscal 2023, the year ended 2023-12-30. The computed Lynch category captures this: a slow grower that is shrinking, with profit down about 3.5% a year over five years and revenue down 0.8%. There are brighter spots: in fiscal Q2 2026, the quarter ended 2026-07-04, revenue was $615.5M, net income $105.0M, and diluted EPS $2.87, showing earnings can rebound. Financial health is mixed. FairStock's calculations at the 2026-10-13 close show ROE 20.74%, but ROCE only 6.94%, debt-to-equity 1.15, Piotroski F-Score 3/9, and Altman Z-Score 1.67—not a fortress. Free cash flow is $127.1M, and FairStock's FCF yield is 10.9%, while the 3.37% dividend is a real return. FairStock calculations at the same close put valuation at P/E 5.94, P/B 1.14, EV/EBITDA 9.18, and the Graham Number of $55.13 gives a 42.26% margin of safety. But a low multiple on shrinking profits can be a trap. I would want evidence that the Q2 2026 profit rebound is durable and that debt and margins improve before calling this a high-quality bargain.

In plain English: Carter's makes and sells clothes for babies and young children through stores and wholesalers. The business has shown shrinking profits over several years, and some financial safety measures look weak, but the stock price looks low compared with recent earnings and cash flow. That combination can mean a cheap-looking stock with real business risk.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-07-04) · fiscal Q1 2026 10-Q (period ended 2026-04-04) · fiscal Q3 2025 10-Q (period ended 2025-09-27) · fiscal Q2 2025 10-Q (period ended 2025-06-28) · FY2025 10-K (period ended 2026-01-03) · FY2024 10-K (period ended 2024-12-28) · FY2023 10-K (period ended 2023-12-30)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer