Carter’s Inc. (NYSE: CRI) shares tumbled more than 14% in pre-market trading on Monday after the children’s apparel retailer reported third-quarter results that missed revenue expectations and suspended its 2025 guidance due to tariff-related uncertainty.
The company reported adjusted earnings per share of $0.74, narrowly beating analyst expectations of $0.72. Revenue came in at $758 million, below the consensus forecast of $771.17 million and flat compared to the prior-year quarter.
Adjusted operating income dropped 48.9% to $39.4 million, while operating margin fell to 5.2% from 10.2% a year earlier. Management cited higher tariff costs, product quality investments, and spending on new store openings as primary factors impacting profitability.
Carter’s also announced a series of cost-saving initiatives aimed at boosting efficiency, including cutting approximately 300 office-based positions — or 15% of its corporate workforce — by the end of 2025. The company plans to close around 150 North American stores over the next three years, with these actions expected to generate $35 million in annual savings beginning in 2026.
