News

Carter's, Inc. CRI is scheduled to release fourth-quarter 2023 results on Feb 27, before the opening bell. The branded marketer of apparel, exclusively for babies and children in North America, is likely to witness a decline in the top line when it reports fourth-quarter results.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $869 million, indicating a decrease of 4.7% from the figure reported in the year-ago quarter. However, the consensus estimate for quarterly earnings, which has been unchanged at $2.55 per share in the past 30 days, suggests an increase of 11.4% from the year-ago quarter’s reported figure.

The company has a trailing four-quarter earnings surprise of 42.3%, on average. In the last reported quarter, CRI’s bottom line beat the Zacks Consensus Estimate by 23.5%.

Factors to Note

Carter’s has been witnessing higher-than-planned demand in its wholesale business, driven by the strength of product offerings and lower inventory. The company has been implementing several measures, including improved pricing and optimized inventory management, to counteract the impacts of decreased consumer demand. CRI has been making efforts to reduce inventory levels to improve product sell-throughs, price realization and the gross profit margin. Stronger product offerings, improved on-time shipping performance, and lower ocean freight rates and product costs are expected to have aided sales and earnings in the quarter under review.

The company has been strengthening e-commerce capabilities through investments to speed up deliveries. Some other notable efforts include expanded omnichannel facilities, including curbside pickup, same-day pickup, buy online and pickup at store, and ship from store. These, along with the easy access to a broad array of online products when shopping in stores, bode well. In its last earnings report, management expected the overall demand trends to improve in the second half of 2023, as it expects inflation to be moderate.

However, Carter’s has been reeling under inflationary pressures. In addition, CRI has been witnessing higher performance-based compensation provisions. Management had projected net sales for the fourth quarter of 2023 to be $862-$877 million, indicating a decline from $912 million recorded in the year-ago quarter. It had envisioned adjusted earnings to be $2.50-$2.72 per share.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Carter's this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Carter's, Inc. Price and EPS Surprise

Carter's currently has an Earnings ESP of -1.96% and a Zacks Rank of 2.

Stocks Poised to Beat Earnings Estimates

Here are some companies, which according to our model, have the right combination of elements to post an earnings beat:

lululemon athletica LULU currently has an Earnings ESP of +0.29% and a Zacks Rank of 2. LULU is likely to have registered top and bottom-line growth in the fourth quarter. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.2 billion, suggesting 15% growth from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for LULU’s fourth-quarter earnings is pegged at $4.99 a share, up 13.4% from the year-ago quarter. The consensus mark has risen by a penny in the past seven days.

NIKE NKE currently has an Earnings ESP of +5.39% and a Zacks Rank of 3. NKE is likely to have witnessed top and bottom-line decline this time around. The Zacks Consensus Estimate for its quarterly revenues is pegged at $12.4 billion, suggesting a 0.3% drop from the figure reported in the year-ago quarter.

The consensus estimate for NIKE’s third-quarter earnings is pegged at 72 cents per share, suggesting an 8.9% decline from the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.

Planet Fitness PLNT currently has an Earnings ESP of +2.04% and a Zacks Rank of 3. PLNT is likely to have witnessed top and bottom-line growth in fourth-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $283.6 million, suggesting 0.8% growth from the figure reported in the year-ago quarter.

The consensus estimate for Planet Fitness’ fourth-quarter earnings is pegged at 58 cents per share, suggesting 9.4% growth from the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.