Carter’s posts Q1 net loss of 78.7 million dollars

Carter’s, Inc., for its first quarter reported net sales decrease of 86.6 million dollars or 11.7 percent to 654.5 million dollars, reflecting store closures in North America and lower wholesale customer demand as a result of the Covid-19 pandemic. The company posted an operating loss of 78.5 million dollars compared to operating income of 60.8 million dollars, while adjusted operating loss was 26.3 million dollars compared to adjusted operating income of 60.3 million dollars in the first quarter of fiscal 2019. The company’s net loss was 78.7 million dollars or 1.82 dollars per diluted share, compared to net income of 34.5 million dollars or 75 cents per diluted share, while adjusted net loss was 34.8 million dollars or 81 cents per diluted share compared to adjusted net income of 39.6 million dollars or earnings per share of 87 cents.

“The global pandemic has meaningfully disrupted the lives of families with young children. It began to impact our company’s performance in March and will weigh on the growth we had planned this year,” said Michael D. Casey, the company’s Chairman and Chief Executive Officer in a statement, adding, “In the second week of March, our sales began to decline as consumers reacted to the various media reports which heightened the awareness of significant risks related to Covid-19, and related precautions needed. In the days that followed, for the safety of consumers and employees, our store operations and related sales were suspended.”

Carter’s Q1 results across retail segments

The company said that U.S. retail segment sales decreased 56.3 million dollars or 14.9 percent to 320.7 million dollars driven by store closures as precautionary measures in response to the Covid-19 pandemic, partially offset by an increase in ecommerce sales. In the first quarter, the company opened three stores and closed five stores in the United States and operated 860 retail stores in the United States at the end of the quarter. U.S. wholesale segment net sales decreased 23.2 million dollars or 8.4 percent, to 252.1 million dollars, reflecting reduced demand due to the closure of certain wholesale customers’ stores as a result of Covid-19.

International segment net sales decreased 7 million dollars or 7.9 percent to 81.6 million dollars reflecting a decrease in retail store sales in Canada driven by store closures in response to Covid-19 and delayed wholesale shipments as a result of Covid-19. The company further said that changes in foreign currency exchange rates adversely affected international segment net sales in the first quarter of fiscal 2020 by 0.7 million dollars or 0.8 percent. On a constant currency basis, international segment net sales declined 7.1 percent. As of the end of the first quarter, the company operated 198 retail stores in Canada and 43 retail stores in Mexico.