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The operating income fell 62.2 per cent to $29.1 million, reflecting higher tariffs, increased investment in product quality and store expansion. Adjusted operating income dropped 48.9 per cent to $39.4 million, with an adjusted operating margin of 5.2 per cent versus 10.2 per cent in the previous year.<\/p>\n
American apparel company Carter’s, Inc, has reported flat Q3 FY25 sales at $757.8 million, while profit fell sharply due to higher tariffs and restructuring costs.
\nNet income dropped to $11.6 million from $58.3 million, with adjusted EPS down to $0.74.
\nThe company plans 300 job cuts and 150 store closures to save $35 million annually, while tariffs are expected to impact Q4 earnings by $25\u201335 million. <\/p>\n
Net income plunged to $11.6 million, or $0.32 per diluted share, from $58.3 million, or $1.62 per diluted share, a year earlier. On an adjusted basis, net income was $26.8 million, or $0.74 per diluted share, compared to $59 million, or $1.64 per diluted share, in Q3 FY24, Carter\u2019s said in a press release.<\/p>\n
\u201cOur third quarter performance reflected continued improvement in US retail business demand as we achieved positive comparable sales and improved pricing for the second consecutive quarter,\u201d said Douglas C Palladini, chief executive officer (CEO) and president<\/em><\/strong>. \u201cHowever, elevated product costs, in part due to the impact of higher tariffs, as well as additional investment, weighed meaningfully on our profitability.\u201d<\/p>\n For the first nine months (9M) of FY25, Carter\u2019s has reported net sales of $1.97 billion, down 0.6 per cent YoY. Adjusted operating income declined nearly half to $86.5 million, with adjusted earnings per share (EPS) at $1.57, compared with $3.43 a year earlier. Net cash used in operations totalled $136.3 million, compared to net cash inflow of $11.3 million in FY24.<\/p>\n The company has initiated a productivity drive, including the reduction of 300 office-based roles (around 15 per cent of its workforce) and the closure of 150 stores across North America by 2026, measures expected to generate annual savings of about $35 million beginning in 2026, added the release.<\/p>\n Looking ahead, the company warned that new US import tariffs could have a pre-tax earnings impact of $200\u2013250 million annually. Vietnam, Cambodia, Bangladesh, and India now account for about 75 per cent of Carter\u2019s sourcing, with China contributing less than 3 per cent. The company expects a $25\u201335 million hit to pre-tax income in Q4 FY25 due to tariff pressures.<\/p>\n Carter\u2019s has also secured commitments for a new five-year $750 million asset-based revolving credit facility to strengthen liquidity and is evaluating refinancing options for its $500 million senior notes maturing in 2027.<\/p>\n
<\/p>\n Fibre2Fashion News Desk (SG) <\/p>\n
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