Carter's Inc. Reports Third Quarter Fiscal 2020 Results.

Highlights:

* Third quarter results show progress recovering from market disruption

* Net sales $865 million, decline of 8%

* U.S. Retail comparable sales down 3.5%, including 17% increase in eCommerce sales

* Sales of exclusive brands to Target, Walmart and Amazon grew 10%

* Operating income $114 million, growth of 35%; adjusted operating income $120 million, growth of 4%

* Diluted EPS $1.85, growth of 38%; adjusted diluted EPS $1.96, growth of 5%

* $1.6 billion in liquidity at quarter end

ATLANTA- Carter's, Inc. (NYSE:CRI), the largest branded marketer in North America of apparel exclusively for babies and young children, today reported its third quarter fiscal 2020 results.

'We exceeded our sales and earnings goals in the third quarter,' said Michael D. Casey, Chairman and Chief Executive Officer. 'The quarter got off to a strong start with our Fourth of July holiday retail sales up 7%. We saw less robust demand in August during the back-to-school shopping period with many children beginning their school year at home and learning virtually. We had the strongest level of demand in September with our Labor Day holiday retail sales up 15%, our best performance in three years.

'Earnings in the quarter were driven by the strength of our product offerings, more effective brand marketing, fewer promotions, curtailed spending and growth in eCommerce sales. eCommerce continues to be our fastest growing and highest margin business.

'We believe our third quarter performance reflects the strength of our brands, our strong value proposition, broad market distribution and the less discretionary nature of children's apparel.

'As we enter the final weeks of the year, consumer demand is less predictable this holiday season given the lingering effects and, in some markets, resurgence of the coronavirus. That said, we believe we are well-positioned to outperform the market in the balance of 2020 and years ahead by providing the best value and experience in young children's apparel.'

Adjustments to Reported GAAP Results

In addition to the results presented in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements, as presented below. The Company believes these adjustments provide a meaningful comparison of the Company's results and afford investors a view of what management considers to be the Company's core performance. These measures are presented for informational purposes only. See 'Reconciliation of GAAP to Adjusted Results' section of this release for additional disclosures and reconciliations regarding these non-GAAP financial measures.

The Company evaluates its net sales on both an 'as reported' and a 'constant currency' basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates that occurred between the comparative periods. Constant currency net sales results are calculated by translating current period net sales in local currency to the U.S. dollar amount by using the currency conversion rate for the prior comparative period. The Company consistently applies this approach to net sales for all countries where the functional currency is not the U.S. dollar. The Company believes that the presentation of net sales on a constant currency basis provides useful supplemental information regarding changes in our net sales that were not due to fluctuations in currency exchange rates and such information is consistent with how the Company assesses changes in its net sales between comparative periods.

See detailed results at: https://ir.carters.com/news-releases/news-release-details/carters-inc-reports-third-quarter-fiscal-2020-results

Sean McHugh

Vice President & Treasurer

sean.mchugh@carters.com

Source: Carter's, Inc.

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