Carter's Q2 Earnings Smashes Estimates, Lifts FY21 Outlook

Carter's Inc CRI reported second-quarter FY21 sales growth of 45% year-on-year, to $746.4 million, beating the analyst consensus of $713.84 million.
Net sales from U.S. Retail segment grew 34% to $423.63 million, U.S. Wholesale improved 53% to $231.63 million, and the International segment surged 93% to $91.14 million.
The gross margin expanded 370 basis points to 49.4% of net sales.
Selling, general and administrative expenses rose 22.7% Y/Y to $267.8 million.
The operating margin was 14.4%, and operating income for the quarter rose 412.4% to $107.6 million.
The company held $1.1 billion in cash and equivalents as of July 3, 2021. Net cash provided by operating activities totaled $49.5 million for two quarters.
Adjusted EPS of $1.67 beat the analyst consensus of $0.79.
"We continued to see strong demand for our brands, particularly in our stores, reflecting the benefits from store re-openings, progress with vaccinations, and easing of pandemic-related restrictions," said CEO Michael D. Casey.
Outlook: Carter's raised its FY21 sales outlook to increase 15% (prior 10%) from $3.0 billion in FY20, versus the consensus of $3.40 billion. Adjusted EPS to grow 75% (earlier 40%) from $4.16 in FY20, versus the consensus of $6.34.
Price action: CRI shares are trading higher by 0.81% at $99.32 on the last check Friday.

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