Factors Likely To Decide Carter's (CRI) Fate In Q4 Earnings
Zacks Investment Research | Feb 17, 2019 08:32PM ET
Carter’s, Inc. (NYSE:CRI) is slated to release fourth-quarter 2018 results on Feb 25. The company reported negative earnings surprise of 4.8% in third-quarter 2018. However, it delivered average positive surprise of 13.5% in the trailing four quarters.
For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is pegged at $2.57 per share, which has moved down by a penny in the past 30 days. Nevertheless, the estimate reflects a year-over-year growth of 10.8%. Further, the Zacks Consensus Estimate for revenues in the fourth quarter is pegged at $1,069 million, up 4% year over year.
Carter's, Inc. Price and EPS Surprise
industry ’s 16.4% rally.
Nonetheless, Crater’s is poised to benefit from the Retail strategy, which is focused on improving store productivity, strengthening e-commerce business, and enhancing product offerings by introducing extended sizes for the Carter’s brand and expanding Skip Hop brand offerings. The company’s Skip Hop and Age Up initiatives are expected to drive retail sales in 2018. Additionally, it is witnessing a positive response for its co-branded stores, which is a one-stop shop for families with young children. These stores have been the most productive lately, receiving the highest promoter scores and return on investment.
Carter’s also continues to experience robust growth in the International business, which is likely to contribute meaningfully to fourth-quarter sales. Notably, more than 60% of the company’s International sales come from Canada, which is likely to be the largest contributor to International growth in the next five years. Further, it is on track with the integration of the Mexico business, which was acquired in 2017. It anticipates about $30-million sales contribution from Mexico in 2018, with the potential to double sales in the next five years. Moreover, the company expects China to generate about $20 million in sales for 2018, with significant e-commerce sales growth through Tmall.
A Look at the Zacks Model
Our proven model does not conclusively show that Carter’s is likely to beat estimates this quarter. That is because a stock needs to have both — a positive Original post
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