What happened

Friday was a generally upbeat day for the stock market, but you wouldn't know that from the performance of children's apparel retailer Carter's (CRI 0.69%). The company's stock was down by almost 5% in midafternoon trading, in the wake of its latest earnings release.

So what

Carter's unveiled its third-quarter results before market open on Friday, revealing that it took in net sales of just under $819 million. That was more than 20% below the third quarter of 2021 figure (more than $890 million). It also roughly corresponded with the 24% decline in non-GAAP (adjusted) net income, which landed at $65 million ($1.67 per share).

Both of the specialty retail company's headline fundamentals missed analyst estimates. On average, pundits following the stock were expecting a top-line number of just over $856 million and adjusted per-share net income of $1.73. 

Carter's attributed the declines to macroeconomic difficulties, specifically the inflation that has lifted prices for family essentials such as gasoline and food. The company said that in 2021, government stimulus payments supported the budgets of families with young children, giving them more scope to buy clothes.

Now what

Compounding that weaker-than-expected performance, Carter's reduced its top- and bottom-line guidance for the entirety of 2022.

The company now forecasts that it will book net sales of around $3.15 billion to $3.19 billion; previously it had guided for a range of $3.25 billion to $3.3 billion. The adjusted earnings estimate for the year also received a chop, with Carter's proffering a new one of $6.05 to $6.65 (formerly $7.10 to $7.60).