- Net sales $696 million
- Diluted EPS $0.95; adjusted diluted EPS $0.98
- Returned $38 million to shareholders through share
repurchases and dividends
- Company reaffirms full year fiscal 2023 outlook1:
- Net sales of $3.0 billion
- Adjusted operating income of $350 million
- Adjusted diluted EPS of $6.15
Carter’s, Inc. (NYSE:CRI), the largest branded marketer in North
America of apparel exclusively for babies and young children, today
reported its first quarter fiscal 2023 results.
“We exceeded our first quarter sales and earnings objectives,”
said Michael D. Casey, Chairman and Chief Executive Officer. “We
saw higher than planned demand from some of our largest wholesale
customers eager to receive our new Spring product offerings in
preparation for the shift to warmer weather outfitting. Our retail
and international sales were in line with our plans.
“On-time deliveries of our product offerings sourced from Asia
improved to the best performance we have experienced since the
pandemic began and enabled us to support earlier than planned
demand.
“As expected, our first quarter sales and earnings were lower
than last year. Historic inflation began to meaningfully weigh on
families with young children and their demand for our brands last
year.
“To mitigate the effects of lower consumer demand, we have
focused on reducing discretionary spending and improving price
realization, largely driven through better inventory management. As
a result, earnings and cash flow from operations exceeded our
expectations in the first quarter.
“Given a good start to the year, we are reaffirming our previous
guidance for sales and earnings for 2023. With time, we expect
inflation will decrease to more acceptable levels, the burden of
lower real wages affecting families with young children will
moderate, and demand for our brands will improve.
“Carter’s is the best-selling brand in young children’s apparel
with unparalleled market share and distribution capabilities. We
believe our multi-brand, multi-channel business model, and leading
market position in essential core products will enable Carter’s to
benefit from the market recovery in the years ahead.”
____________________________
1 Refer to “Business Outlook” section of
this release for additional information regarding reconciliations
of forward-looking non-GAAP financial measures.
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 non-GAAP financial measurements provide a meaningful
comparison of the Company’s results and afford investors a view of
what management considers to be the Company’s underlying
performance. These measures are presented for informational
purposes only. See “Reconciliation of Adjusted Results to GAAP”
section of this release for additional disclosures and
reconciliations regarding these non-GAAP financial measures.
Adjustments made to Q1 fiscal 2023 results reflect costs related to
organizational restructuring. There were no adjustments to Q1
fiscal 2022 results.
Fiscal Quarter Ended
April 1, 2023
April 2, 2022
(In millions, except earnings per
share)
Operating Income
% Net Sales
Net Income
Diluted EPS
Operating Income
% Net Sales
Net Income
Diluted EPS
As reported (GAAP)
$
56.4
8.1
%
$
36.0
$
0.95
$
102.6
13.1
%
$
67.9
$
1.66
Organizational restructuring
1.2
0.9
0.03
—
—
—
As adjusted
$
57.5
8.3
%
$
36.9
$
0.98
$
102.6
13.1
%
$
67.9
$
1.66
Note: Results may not be additive due to
rounding.
Consolidated Results
First Quarter of Fiscal 2023 compared to First Quarter of Fiscal
2022
Net sales decreased $85.4 million, or 10.9%, to $695.9 million,
compared to $781.3 million in the first quarter of fiscal 2022.
Macroeconomic factors, including inflation, drove lower demand from
consumers and wholesale customers. U.S. Retail comparable net sales
declined 12.9%. Changes in foreign currency exchange rates used for
translation in the first quarter fiscal 2023, as compared to the
first quarter of fiscal 2022, had an unfavorable effect on
consolidated net sales of approximately $2.2 million, or 0.3%.
Operating income decreased $46.3 million, or 45.1%, to $56.4
million, compared to $102.6 million in the first quarter of fiscal
2022. Operating margin decreased to 8.1%, compared to 13.1% in the
prior year period, principally due to fixed cost deleverage on
lower sales, channel mix of sales, and higher inbound freight
costs, partly offset by lower air freight expenses.
Adjusted operating income (a non-GAAP measure) decreased $45.1
million, or 44.0%, to $57.5 million, compared to $102.6 million in
the first quarter of fiscal 2022. Adjusted operating margin was
8.3%, compared to 13.1% in the prior year period, principally due
to the factors discussed above.
Net income decreased $31.9 million to $36.0 million, or $0.95
per diluted share, compared to $67.9 million, or $1.66 per diluted
share, in the first quarter of fiscal 2022.
Adjusted net income (a non-GAAP measure) decreased $31.1 million
to $36.9 million, compared to $67.9 million in the first quarter of
fiscal 2022. Adjusted earnings per diluted share (a non-GAAP
measure) was $0.98, compared to $1.66 in the first quarter of
fiscal 2022.
Net cash provided by operations in the first quarter of fiscal
2023 was $42.2 million, compared to net cash used in operations of
$163.8 million in the prior year period. The improved operating
cash flow principally reflects favorable changes in working
capital, including the reduction in inventories, and lower payments
of performance-based compensation, partially offset by decreased
net income.
See the “Business Segment Results” and “Reconciliation of
Adjusted Results to GAAP” sections of this release for additional
disclosures regarding business segment performance and non-GAAP
measures.
Return of Capital Activity
In the first quarter of fiscal 2023, the Company returned a
total of $38.1 million to shareholders through share repurchases
and cash dividends as described below.
- Share repurchases: During the first quarter, the Company
repurchased and retired approximately 136 thousand shares of its
common stock for $9.6 million at an average price of $70.55 per
share. Fiscal year-to-date through April 27, 2023, the Company
repurchased and retired approximately 272 thousand shares for $19.2
million at an average price of $70.54 per share. As of April 27,
2023, the total remaining capacity under the Company’s
previously-announced repurchase authorizations was approximately
$730 million.
- Dividends: In the first quarter, the Company paid a cash
dividend of $0.75 per common share totaling $28.5 million. Future
payments of quarterly dividends will be at the discretion of the
Company’s Board of Directors based on a number of factors,
including the Company’s future financial performance and other
considerations.
2023 Business Outlook
We do not reconcile forward-looking adjusted operating income or
adjusted diluted earnings per share to their most directly
comparable GAAP measures because we cannot predict with reasonable
certainty the ultimate outcome of certain components of such
reconciliations that are not within our control due to factors
described above, or others that may arise, without unreasonable
effort. For these reasons, we are unable to assess the probable
significance of the unavailable information, which could materially
impact the amount of future operating income or diluted EPS, the
most directly comparable GAAP metrics to adjusted operating income
and adjusted diluted earnings per share, respectively.
For the second quarter of fiscal 2023, the Company
expects approximately:
- $590 million to $605 million in net sales (compared to $700.7
million in the second quarter of fiscal 2022);
- $30 million to $35 million in adjusted operating income
(compared to $75.4 million in the second quarter of fiscal 2022);
and
- $0.40 to $0.50 in adjusted diluted earnings per share (compared
to $1.30 in the second quarter of fiscal 2022).
Our forecast for the second quarter of fiscal 2023 assumes:
- Shift of previously planned U.S. Wholesale demand from the
second quarter to the first quarter of 2023;
- Continued inflationary pressure on consumer demand;
- Improved gross margin, reflecting lower inventory-related costs
and lower inbound freight costs;
- Comparable SG&A;
- Higher interest expense and tax rate; and
- Lower shares outstanding.
For fiscal year 2023, the Company is reaffirming its
prior guidance and projects approximately:
- $3.0 billion in net sales (compared to $3,212.7 million in
fiscal 2022);
- $350 million in adjusted operating income (compared to $388.2
million in fiscal 2022);
- $6.15 in adjusted diluted earnings per share (compared to $6.90
in fiscal 2022);
- Operating cash flow of over $300 million; and
- Capital expenditures of approximately $75 million.
Our forecast for fiscal year 2023 assumes:
- Improvement in demand trend as inflation moderates;
- Gross margin expansion, driven by lower transportation costs,
improved price realization, and favorable changes in channel
mix;
- Comparable SG&A;
- Higher interest expense and tax rate; and
- Lower shares outstanding.
Our adjusted operating income and diluted earnings per share
outlooks for fiscal year 2023 exclude a pre-tax net charge of $1.2
million related to organizational restructuring recorded in the
first fiscal quarter.
Conference Call
The Company will hold a conference call with investors to
discuss first quarter fiscal 2023 results and its business outlook
on April 28, 2023 at 8:30 a.m. Eastern Daylight Time. To listen to
a live webcast and view the accompanying presentation materials,
please visit ir.carters.com and select links for “News &
Events” followed by “Webcasts & Presentations.” To access the
call by phone, please preregister on
https://register.vevent.com/register/BI8a4d7c8d0bba49e3ac509567ccbd80ce
to receive your dial-in number and unique passcode.
A webcast replay will be available shortly after the conclusion
of the call at ir.carters.com.
About Carter’s, Inc.
Carter’s, Inc. is the largest branded marketer of young
children’s apparel in North America. The Company owns the Carter’s
and OshKosh B’gosh brands, two of the most recognized brands in the
marketplace. These brands are sold in leading department stores,
national chains, and specialty retailers domestically and
internationally. They are also sold through nearly 1,000
Company-operated stores in the United States, Canada, and Mexico
and online at www.carters.com, www.oshkosh.com,
www.cartersoshkosh.ca, and www.carters.com.mx. The Company’s Child
of Mine brand is available at Walmart, its Just One You brand is
available at Target, and its Simple Joys brand is available on
Amazon. The Company also owns Little Planet, a brand focused on
organic fabrics and sustainable materials, and Skip Hop, a global
lifestyle brand for families with young children. Carter’s is
headquartered in Atlanta, Georgia. Additional information may be
found at www.carters.com.
Forward Looking Statements
Statements contained in this press release that are not
historical fact and use predictive words such as “estimates”,
“outlook”, “guidance”, “expect”, “believe”, “intend”, “designed”,
“target”, “plans”, “may”, “will”, “are confident” and similar words
are forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995). These
forward-looking statements and related assumptions involve risks
and uncertainties that could cause actual results and outcomes to
differ materially from any forward-looking statements or views
expressed in this press release. These risks and uncertainties
include, but are not limited to, the factors disclosed in Part I,
Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2022, and otherwise in our
reports and filings with the Securities and Exchange Commission, as
well as the following factors: the continuing effects of the novel
coronavirus (COVID-19) pandemic; macroeconomic factors, including
inflationary pressures; the impact of supply chain delays;
financial difficulties for one or more of our major customers; an
overall decrease in consumer spending; our products not being
accepted in the marketplace; increased competition in the market
place; diminished value of our brands; the failure to protect our
intellectual property; the failure to comply with applicable
quality standards or regulations; unseasonable or extreme weather
conditions; pending and threatened lawsuits; a breach of our
information technology systems and the loss of personal data;
increased margin pressures, including increased cost of materials
and labor; our foreign sourcing arrangements; disruptions in our
supply chain, including increased transportation and freight costs;
the management and expansion of our business domestically and
internationally; the acquisition and integration of other brands
and businesses; changes in our tax obligations, including
additional customs, duties or tariffs; our ability to achieve our
forecasted financial results for the fiscal year; our continued
ability to declare and pay a dividend and conduct share repurchases
in future periods; our planned opening and closing of stores during
the fiscal year; and other risks detailed in the Company’s periodic
reports as filed in accordance with the Securities Exchange Act of
1934, as amended. The Company does not undertake any obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
CARTER’S, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(dollars in thousands, except per
share data)
(unaudited)
Fiscal Quarter Ended
April 1, 2023
April 2, 2022
Net sales
$
695,880
$
781,284
Cost of goods sold
386,413
426,242
Gross profit
309,467
355,042
Royalty income, net
6,519
7,474
Selling, general, and administrative
expenses
259,632
259,893
Operating income
56,354
102,623
Interest expense
9,644
15,132
Interest income
(700
)
(338
)
Other income, net
(258
)
(512
)
Income before income taxes
47,668
88,341
Income tax provision
11,672
20,408
Net income
$
35,996
$
67,933
Basic net income per common share
$
0.95
$
1.66
Diluted net income per common share
$
0.95
$
1.66
Dividend declared and paid per common
share
$
0.75
$
0.75
CARTER’S, INC.
BUSINESS SEGMENT
RESULTS
(dollars in thousands)
(unaudited)
Fiscal Quarter Ended
April 1, 2023
% of Consolidated Net
Sales
April 2, 2022
% of Consolidated Net
Sales
Net sales:
U.S. Retail
$
323,721
46.5
%
$
366,358
46.9
%
U.S. Wholesale
279,990
40.3
%
307,301
39.3
%
International
92,169
13.2
%
107,625
13.8
%
Consolidated net sales
$
695,880
100.0
%
$
781,284
100.0
%
Operating income:
% of Segment Net
Sales
% of Segment Net
Sales
U.S. Retail
$
26,939
8.3
%
$
49,994
13.6
%
U.S. Wholesale
52,092
18.6
%
60,506
19.7
%
International
3,124
3.4
%
10,388
9.7
%
Corporate expenses(*)
(25,801
)
n/a
(18,265
)
n/a
Consolidated operating income
$
56,354
8.1
%
$
102,623
13.1
%
(*)
Corporate expenses include expenses
related to incentive compensation, stock-based compensation,
executive management, severance and relocation, finance, office
occupancy, information technology, certain legal fees, consulting
fees, and audit fees.
Fiscal Quarter Ended April 1,
2023
(dollars in millions)
U.S. Retail
U.S. Wholesale
International
Organizational restructuring(*)
$
(0.8)
$
(0.5)
$
(0.1)
(*)
Relates to gains for organizational
restructuring and related corporate office lease amendment actions.
Additionally, the first fiscal quarter ended April 1, 2023 includes
a corporate charge of $2.4 million related to organizational
restructuring and related corporate office lease amendment
actions.
CARTER’S, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(dollars in thousands, except per
share data)
(unaudited)
April 1, 2023
December 31, 2022
April 2, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
157,685
$
211,748
$
702,266
Accounts receivable, net of allowance for
credit losses of $7,425, $7,189, and $5,766, respectively
223,939
198,587
265,694
Finished goods inventories, net of
inventory reserves of $18,076, $19,268, and $11,307,
respectively
613,921
744,573
679,729
Prepaid expenses and other current assets
(*)
47,173
33,812
51,186
Total current assets
1,042,718
1,188,720
1,698,875
Property, plant, and equipment, net of
accumulated depreciation of $577,183, $569,528, and $536,580,
respectively
180,383
189,822
197,515
Operating lease assets
494,969
492,335
469,354
Tradenames, net
298,331
298,393
307,581
Goodwill
209,601
209,333
212,518
Customer relationships, net
29,801
30,564
33,151
Other assets
27,524
30,548
29,084
Total assets
$
2,283,327
$
2,439,715
$
2,948,078
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
180,181
$
264,078
$
284,034
Current portion of long-term debt, net
—
—
495,743
Current operating lease liabilities
(*)
139,350
142,432
133,620
Other current liabilities
91,104
122,439
111,078
Total current liabilities
410,635
528,949
1,024,475
Long-term debt, net
576,803
616,624
496,104
Deferred income taxes
46,090
41,235
48,450
Long-term operating lease liabilities
417,012
421,741
419,493
Other long-term liabilities
34,894
34,757
44,266
Total liabilities
$
1,485,434
$
1,643,306
$
2,032,788
Commitments and contingencies
Stockholders' equity:
Preferred stock; par value $0.01 per
share; 100,000 shares authorized; none issued or outstanding at
April 1, 2023, December 31, 2022, and April 2, 2022
$
—
$
—
$
—
Common stock, voting; par value $0.01 per
share; 150,000,000 shares authorized; 37,799,251, 37,692,132, and
40,555,922 shares issued and outstanding at April 1, 2023, December
31, 2022, and April 2, 2022, respectively
378
377
406
Additional paid-in capital
—
—
—
Accumulated other comprehensive loss
(30,412
)
(34,338
)
(26,115
)
Retained earnings
827,927
830,370
940,999
Total stockholders' equity
797,893
796,409
915,290
Total liabilities and stockholders'
equity
$
2,283,327
$
2,439,715
$
2,948,078
(*)
Prepaid expense and other current assets
and Current operating lease liabilities as of April 2, 2022 were
revised to reflect the presentation for payments of rent before
payment due date of $13 million.
CARTER’S, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Fiscal Quarter Ended
April 1, 2023
April 2, 2022
Cash flows from operating activities:
Net income
$
35,996
$
67,933
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation of property, plant, and
equipment
14,799
13,282
Amortization of intangible assets
939
932
Recoveries of excess and obsolete
inventory, net
(1,256
)
(3,109
)
Gain on partial termination of corporate
lease
(4,366
)
—
Other asset impairments and loss on
disposal of property, plant and equipment, net of recoveries
2,632
190
Amortization of debt issuance costs
393
787
Stock-based compensation expense
4,343
5,859
Unrealized foreign currency exchange gain,
net
(240
)
(189
)
Provisions for (recoveries of) doubtful
accounts receivable from customers
235
(1,513
)
Unrealized (gain) loss on investments
(433
)
935
Deferred income taxes
5,031
7,759
Effect of changes in operating assets and
liabilities:
Accounts receivable
(24,944
)
(32,484
)
Finished goods inventories
134,147
(27,720
)
Prepaid expenses and other assets (1)
(12,678
)
(42
)
Accounts payable and other liabilities
(1)
(112,401
)
(196,427
)
Net cash provided by (used in) operating
activities
$
42,197
$
(163,807
)
Cash flows from investing activities:
Capital expenditures
$
(13,827
)
$
(7,652
)
Net cash used in investing activities
$
(13,827
)
$
(7,652
)
Cash flows from financing activities:
Payment of debt issuance costs
$
—
$
(3
)
Payments on secured revolving credit
facility
(40,000
)
—
Repurchases of common stock
(9,586
)
(74,496
)
Dividends paid
(28,483
)
(30,573
)
Withholdings from vesting of restricted
stock
(4,776
)
(6,623
)
Proceeds from exercises of stock
options
83
222
Net cash used in financing activities
$
(82,762
)
$
(111,473
)
Net effect of exchange rate changes on
cash and cash equivalents
329
904
Net decrease in cash and cash
equivalents
$
(54,063
)
$
(282,028
)
Cash and cash equivalents, beginning of
period
211,748
984,294
Cash and cash equivalents, end of
period
$
157,685
$
702,266
(1)
Cash flows for the fiscal quarter April 2,
2022 were revised to reflect the presentation for payments of rent
before payment due date of $13 million.
CARTER’S, INC.
RECONCILIATION OF ADJUSTED
RESULTS TO GAAP
(dollars in millions, except
earnings per share)
(unaudited)
Fiscal Quarter Ended April 1,
2023
Gross Profit
% Net Sales
SG&A
% Net Sales
Operating Income
% Net Sales
Income Taxes
Net Income
Diluted EPS
As reported (GAAP)
$
309.5
44.5
%
$
259.6
37.3
%
$
56.4
8.1
%
$
11.7
$
36.0
0.95
Organizational restructuring (b)
—
(1.2
)
1.2
0.3
0.9
0.03
As adjusted (a)
$
309.5
44.5
%
$
258.5
37.1
%
$
57.5
8.3
%
$
12.0
$
36.9
$
0.98
Fiscal Quarter Ended July 2,
2022
Gross Profit
% Net Sales
SG&A
% Net Sales
Operating Income
% Net Sales
Income Taxes
Net Income
Diluted EPS
As reported (GAAP)
$
331.2
47.3
%
$
261.4
37.3
%
$
75.4
10.8
%
$
10.1
$
37.0
$
0.93
Loss on extinguishment of debt (c)
—
—
—
4.8
15.2
0.38
As adjusted (a)
$
331.2
47.3
%
$
261.4
37.3
%
$
75.4
10.8
%
$
14.9
$
52.1
$
1.30
Fiscal Year Ended December 31,
2022
Gross Profit
% Net Sales
SG&A
% Net Sales
Operating
Income
% Net Sales
Income Taxes
Net Income
Diluted EPS
As reported (GAAP)
$
1,472.4
45.8
%
$
1,110.0
34.6
%
$
379.2
11.8
%
$
66.7
$
250.0
$
6.34
Intangible asset impairment (d)
—
—
9.0
2.1
6.9
0.17
Loss on extinguishment of debt (c)
—
—
—
4.8
15.2
0.38
As adjusted (a)
$
1,472.4
45.8
%
$
1,110.0
34.6
%
$
388.2
12.1
%
$
73.6
$
272.0
$
6.90
(a)
In addition to the results provided in
this earnings release in accordance with GAAP, the Company has
provided adjusted, non-GAAP financial measurements that present
gross profit, SG&A, operating income, income taxes, net income,
and net income on a diluted share basis excluding the adjustments
discussed above. 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. The adjusted, non-GAAP financial measurements included
in this earnings release should not be considered as an alternative
to net income or as any other measurement of performance derived in
accordance with GAAP. The adjusted, non-GAAP financial measurements
are presented for informational purposes only and are not
necessarily indicative of the Company’s future condition or results
of operations.
(b)
Net expenses related to organizational
restructuring and related corporate office lease amendment
actions.
(c)
Related to the redemption of the $500
million aggregate principal amount of senior notes due 2025 in
April 2022 that were previously issued by a wholly-owned subsidiary
of the Company.
(d)
Related to the write-down of the Skip Hop
tradename asset.
Note: No adjustments were made to GAAP
results in the first quarter of fiscal 2022. Results may not be
additive due to rounding.
CARTER’S, INC.
RECONCILIATION OF NET INCOME
ALLOCABLE TO COMMON SHAREHOLDERS
(unaudited)
Fiscal Quarter Ended
April 1, 2023
April 2, 2022
Weighted-average number of common and
common equivalent shares outstanding:
Basic number of common shares
outstanding
37,104,527
40,270,895
Dilutive effect of equity awards
8,063
77,437
Diluted number of common and common
equivalent shares outstanding
37,112,590
40,348,332
As reported on a GAAP Basis:
(dollars in thousands, except per share
data)
Basic net income per common share:
Net income
$
35,996
$
67,933
Income allocated to participating
securities
(576
)
(921
)
Net income available to common
shareholders
$
35,420
$
67,012
Basic net income per common share
$
0.95
$
1.66
Diluted net income per common share:
Net income
$
35,996
$
67,933
Income allocated to participating
securities
(576
)
(920
)
Net income available to common
shareholders
$
35,420
$
67,013
Diluted net income per common share
$
0.95
$
1.66
As adjusted (a):
Basic net income per common share:
Net income
$
36,879
$
67,933
Income allocated to participating
securities
(592
)
(921
)
Net income available to common
shareholders
$
36,287
$
67,012
Basic net income per common share
$
0.98
$
1.66
Diluted net income per common share:
Net income
$
36,879
$
67,933
Income allocated to participating
securities
(592
)
(920
)
Net income available to common
shareholders
$
36,287
$
67,013
Diluted net income per common share
$
0.98
$
1.66
(a)
In addition to the results provided in
this earnings release in accordance with GAAP, the Company has
provided adjusted, non-GAAP financial measurements that present per
share data excluding the adjustments discussed above. The Company
has excluded $0.9 million in after-tax expenses from these results
for the fiscal quarter ended April 1, 2023.
Note: Results may not be additive due to
rounding.
RECONCILIATION OF ADJUSTED
RESULTS TO GAAP
(dollars in millions)
(unaudited)
The following table provides a
reconciliation of net income to EBITDA and Adjusted EBITDA for the
periods indicated:
Fiscal Quarter Ended
Four Fiscal Quarters
Ended
April 1, 2023
April 2, 2022
April 1, 2023
Net income
$
36.0
$
67.9
$
218.1
Interest expense
9.6
15.1
37.3
Interest income
(0.7
)
(0.3
)
(1.6
)
Income tax provision
11.7
20.4
58.0
Depreciation and amortization
15.7
14.2
66.8
EBITDA
$
72.4
$
117.3
$
378.5
Adjustments to EBITDA
Organizational restructuring (a)
$
1.2
$
—
$
1.2
Loss on extinguishment of debt (b)
—
—
19.9
Intangible asset impairment (c)
—
—
9.0
Total adjustments
1.2
—
30.1
Adjusted EBITDA
$
73.5
$
117.3
$
408.6
(a)
Net expenses related to organizational
restructuring and related corporate office lease amendment
actions.
(b)
Related to the redemption of the $500
million aggregate principal amount of senior notes due 2025 in
April 2022 that were previously issued by a wholly-owned subsidiary
of the Company.
(c)
Related to the write-down of the Skip Hop
tradename asset.
Note: Results may not be additive due to
rounding.
EBITDA and Adjusted EBITDA are
supplemental financial measures that are not defined or prepared in
accordance with GAAP. We define EBITDA as net income before
interest, income taxes, and depreciation and amortization. Adjusted
EBITDA is EBITDA adjusted for the items described in footnotes (a)
- (c) to the table above.
We present EBITDA and Adjusted EBITDA
because we consider them important supplemental measures of our
performance and believe they are frequently used by securities
analysts, investors, and other interested parties in the evaluation
of companies in our industry. These measures also afford investors
a view of what management considers to be the Company's core
performance.
The use of EBITDA and Adjusted EBITDA
instead of net income or cash flows from operations has limitations
as an analytical tool, and you should not consider them in
isolation, or as a substitute for analysis of our results as
reported under GAAP. EBITDA and Adjusted EBITDA do not represent
net income or cash flow from operations as those terms are defined
by GAAP and do not necessarily indicate whether cash flows will be
sufficient to fund cash needs. While EBITDA, Adjusted EBITDA and
similar measures are frequently used as measures of operations and
the ability to meet debt service requirements, these terms are not
necessarily comparable to other similarly titled captions of other
companies due to the potential inconsistencies in the method of
calculation. EBITDA and Adjusted EBITDA do not reflect the impact
of earnings or charges resulting from matters that we consider not
to be indicative of our ongoing operations. Because of these
limitations, EBITDA and Adjusted EBITDA should not be considered as
discretionary cash available to us for working capital, debt
service and other purposes.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION
(dollars in millions)
(unaudited)
The table below reflects the
calculation of constant currency net sales on a consolidated and
International segment basis for the fiscal quarter ended April 1,
2023:
Fiscal Quarter Ended
Reported Net Sales
April 1, 2023
Impact of Foreign Currency
Translation
Constant- Currency Net
Sales April 1, 2023
Reported Net Sales
April 2, 2022
Reported Net Sales %
Change
Constant- Currency Net Sales %
Change
Consolidated net sales
$
695.9
$
(2.2
)
$
698.0
$
781.3
(10.9
)%
(10.7
)%
International segment net sales
$
92.2
$
(2.2
)
$
94.3
$
107.6
(14.4
)%
(12.3
)%
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.
Note: Results may not be additive due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230427006005/en/
Sean McHugh Vice President & Treasurer (678) 791-7615
Carters (NYSE:CRI)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Carters (NYSE:CRI)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024