In what's becoming delightfully old hat, Carter's (NYSE:CRI) just announced its ninth consecutive quarterly earnings beat on Wednesday. But revenue also came in a little light, and Carter's made some toddler-sized adjustments to its 2015 outlook.

Let's take a closer look at what Carter's accomplished this quarter: 

Carter's results: The raw numbers


Q3 2015 Actuals

Q3 2014 Actuals

Growth (YOY)


 $849.8 million 

 $798.9 million


Adjusted Net Income

 $79.9 million

 $67.9 million


Adjusted EPS




Data source: Carter's.

What happened with Carter's this quarter?

  • Carter's guidance called for slightly higher revenue of $854.9 million, but lower adjusted earnings per share of $1.40 to $1.46.
  • Consensus estimates predicted earnings at the high end of that range, and revenue of $851.9 million.
  • Carter's retail segment revenue rose 4.8% to $294.9 million.
  • Carter's direct-to-consumer retail comparable sales decreased 3.2%, including a 5.6% decline at retail stores, and 6.2% growth in e-commerce.
  • Carter's wholesale segment revenue rose 10.9% to $343.6 million, driven primarily by strong product demand, but also the timing of a new playwear initiative.
  • OshKosh retail segment revenue rose 7.5% to $98.3 million.
  • OshKosh DTC comps fell 2%, including a 5.4% drop at retail stores and 14.1% growth from e-commerce.
    • OshKosh comps were hurt by the strong dollar, which resulted in lower demand from international tourists at both retail and online channels.
  • OshKosh wholesale revenue fell 25.1% to $18.8 million, because of lower seasonal bookings and lower sales to the off-price channel.
  • International sales rose 3.4% (17.3% on a constant-currency basis) to $94.2 million, driven by:
    • Canada, where direct-to-consumer growth was strong, and comps at retail locations rose 4.8%.
    • Strong demand in China from Carter's new e-commerce business on Tmall.
  • The company repurchased 290,800 shares of common stock for $29.4 million, or an average price of $101.26 per share.
  • That left $97 million remaining under Carter's existing repurchase authorization.

Source: Carter's.

What management had to say 
"We continued to outperform the market," added Carter's Chairman and CEO Michael Casey, "with good growth in sales and earnings in the third quarter. The strength of our brands, broad market distribution, and expense discipline enabled us to achieve our profit objectives and mitigate the effects of foreign currency fluctuations."

Looking forward
For the current quarter, Carter's expects revenue to fall 2% year over year, to roughly $852 million, while fourth-quarter adjusted earnings per diluted share should be $1.22 to $1.30, compared with $1.32 in the same year-ago period. During the subsequent conference call, management explained that these declines are due to a combination of calendar alignment differences between Carter's and its wholesale customers, as well as the fact that fiscal 2014 benefited from an extra week in the year.

For the full year 2015, Carter's sees revenue up 4% over last year, a slight decrease from previous guidance for 5% top-line growth given greater visibility into near-term demand. Adjusted earnings per diluted share for the year are now expected to be up 13% to 15%, or to a range of $4.44 to $4.52, a slight increase from Carter's previous guidance for 12% to 15% bottom-line growth.

All things considered, there were no big surprises in this quarter's report, which essentially leaves investors with a solid business that continues to take market share and outgrow its industry.