The following is a summary of the Carter's, Inc. (CRI) Q1 2024 Earnings Call Transcript:
Financial Performance:
Carter's reported Q1 2024 net sales of around $660 million, a dip from $696 million in Q1 2023 due to lower U.S. retail and e-commerce sales.
Gross profit margin expanded in Q1 due to lower product and inbound freight costs, resulting in higher average cash balances and total liquidity of over $1 billion.
There was a 23% decrease in inventory and lower borrowing, resulting in a use of cash of $26 million in operating cash flow.
Carter's returned capital to shareholders with a 7% increase in its quarterly dividend to $0.80 per share, totaling a $38 million return of capital in Q1.
The financial outlook for Q2 2024 estimates net sales in the range of $560 million to $570 million and adjusted operating income between $25 million to $30 million.
Business Progress:
Carter's is expecting gradual improvement with strategic actions such as better inventory management, sharper price points, and improved marketing.
The company has relished success with its Everyday Value program, Little Planet premium brand, and PurelySoft collection, leading to the expansion of product ranges and retail store presence.
The company is strengthening its U.S. Retail business through store renovations and customization of store assortments based on demographics.
The e-commerce operations are being optimized with a focus on traffic growth and site performance enhancements.
Carter's is executing strategic pricing with the implementation of the Everyday Value pricing strategy and early-season discounting. They are also refining their inventory mix and levels while focusing on enhancing user experience and search engine optimization.
More details: Carter's IR
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