Carter's reports rise in 1Q profit, job cuts

Children's-clothes maker Carter's Inc. reported Tuesday its first-quarter profit jumped 42 percent, and it said it is laying off about 10 percent of its corporate work force.

For the quarter ended April 4, net income rose to $16.4 million, or 28 cents per share, from $11.6 million, or 19 cents per share, a year earlier.

Analysts polled by Thomson Reuters expected profit of 16 cents per share.

Excluding facility closure costs, asset impairment charges and severance costs, the company said it earned 38 cents per share.

Revenue climbed 8 percent to $356.8 million from $330 million. Analysts predict revenue of $334.9 million.

Sales of both the namesake Carter's brand and the OshKosh brand grew in the quarter.

The company said the layoffs come partly as a result of its decision to close its Oshkosh, Wis., facility and one of its three distribution centers.

To cut costs, Carter's said it is also freezing wages and suspending its matching contribution to its 401(k) plan.

Annual savings from the cuts are expected to be about $10 million. The company said it will incur about $2 million in additional severance-related costs in the second quarter and $4 million for recruiting, relocation and retention costs through the rest of 2009.

Carter's said it expects second quarter adjusted profit to be down 7 cents to 10 cents per share compared with the second quarter last year. The company's adjusted profit in last year's second quarter was 13 cents per share.

Shares fell $1.20, or 5.2 percent, to $22 in electronic after-hours trading. During the regular session, shares rose $1, or 4.5 percent, to close at $23.20.