Carter's Retail Momentum Builds: Can Comparable Sales Stay Strong?

Carter's, Inc. CRI has been showing encouraging momentum in its retail business, supported by improving consumer demand and stronger engagement across its stores and digital platforms. The company’s strategy to strengthen brand appeal, introduce new product offerings and invest in demand creation initiatives is helping drive traffic and attract new customers. With its well-known children’s apparel brands and expanding direct-to-consumer focus, Carter’s is gradually rebuilding sales momentum while positioning itself for sustained growth in the competitive apparel market.

In the fourth quarter of 2025, Carter’s retail segment delivered solid performance. Retail net sales increased 9.4% year over year, while comparable sales rose 4.7%, marking the third consecutive quarter of positive comps. The improvement was driven by strong e-commerce traffic, broad-based demand across baby, toddler and kids’ categories, and higher average unit retail prices. The company also saw continued strength in its baby category, which recorded its sixth consecutive quarter of growth, highlighting resilient demand for core products.

Carter's is also strengthening its digital and omnichannel capabilities, which are increasingly central to its retail momentum. The company has been investing in initiatives that connect its physical stores with its e-commerce platform, allowing customers to shop seamlessly across channels. Strong online traffic growth in recent quarters highlights how digital engagement is helping drive overall retail sales while improving convenience for shoppers. By enhancing its website experience, leveraging targeted digital marketing and integrating store and online inventory, Carter’s is creating a more connected shopping journey. This omnichannel strategy not only supports higher customer engagement but also complements the company’s broader efforts to sustain comparable sales growth and strengthen its direct-to-consumer business.

Looking ahead, Carter’s expects its retail business to remain a key growth engine, supported by continued investments in marketing, product innovation and digital capabilities. Management is also focusing on attracting higher-income consumers and reducing promotional activity to strengthen pricing power. While challenges such as tariffs and cost pressures remain, sustained traffic growth and improving product mix could help Carter’s maintain positive comparable sales and reinforce its retail momentum in the coming quarters.

CRI’s Price Performance, Valuation and Estimates

Carter’s shares have gained 7.5% in the past three months against the industry’s 17.6% decline.

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From a valuation standpoint, CRI trades at a forward price-to-earnings ratio of 11.69X compared with the industry’s average of 22.39X.

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Carter’s currently sports a Zacks Rank #1 ( Strong Buy).

Other Key Picks in the Consumer Discretionary Space

Crocs, Inc. CROX , which is a leading footwear company, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CROX delivered a trailing four-quarter earnings surprise of 16.6%, on average. The Zacks Consensus Estimate for Crocs’ current financial-year EPS indicates a rise of 7.2% from the year-ago number.

Ralph Lauren RL , which is a designer and marketer of premium lifestyle products, currently carries a Zacks Rank of 2.

RL delivered a trailing four-quarter earnings surprise of 9.7%, on average. The Zacks Consensus Estimate for RL’s current financial-year sales indicates growth of 12.4% from the year-ago number.

Kontoor Brands, Inc. KTB, which is an apparel company, currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for KTB’s current financial-year EPS is expected to rise 15.6% from the corresponding year-ago reported figure. KTB delivered a trailing four-quarter earnings surprise of 13.9%, on average.

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Ralph Lauren Corporation (RL): Free Stock Analysis Report

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