📊 CRI Key Takeaways
Is Carters Inc. (CRI) a Good Investment?
Carter's Inc exhibits severely deteriorated operational fundamentals characterized by negative free cash flow, anemic 1.9% revenue growth, and abysmal returns on equity (1.5%) and assets (0.6%). Despite a strong cash position, the company's inability to generate profits or convert earnings to cash flow, combined with a 50.6% EPS decline and razor-thin 2.1% net margins, indicates structural operational weakness in a challenging retail apparel market.
Carter's shows stable but low-quality growth, with revenue and net income rising modestly while operating margin remains thin and free cash flow conversion is weak. The balance sheet is still sound, supported by strong liquidity and manageable leverage, but profitability is not strong enough to support a more bullish fundamental view. Overall, the business appears financially stable but lacks the margin strength and cash generation typically associated with higher-conviction upside.
Why Buy Carters Inc. Stock? CRI Key Strengths
- Strong cash position of $473.4M provides near-term liquidity cushion
- Moderate leverage with 0.61x debt/equity ratio and healthy current ratio of 2.80x
- Gross margin of 43.1% is defensible for apparel sector and indicates some product pricing power
- Solid liquidity with $487.07M in cash and a 2.51x current ratio
- Manageable leverage profile with 0.61x debt-to-equity and positive interest coverage
- Revenue and net income remained positive year over year, indicating business stability
CRI Stock Risks: Carters Inc. Investment Risks
- Negative free cash flow of -$543K demonstrates the company is burning cash and cannot self-fund operations
- Critically weak returns: ROE of 1.5% and ROA of 0.6% indicate severe capital inefficiency and shareholder value destruction
- 50.6% year-over-year EPS decline despite slight net income growth reveals significant shareholder dilution masking underlying operational strain
- Interest coverage of only 2.4x limits financial flexibility; further deterioration could trigger covenant concerns
- Stagnant 1.9% revenue growth in a mature apparel market with compressed 4.2% operating margins suggests competitive pressure and limited pricing power
- Operating margin of 5.0% and net margin of 3.2% leave limited room for execution errors or demand weakness
- Free cash flow is modest at $68.63M with only a 2.4% FCF margin, suggesting weak cash conversion
- Diluted EPS fell 50.6% year over year despite higher net income, which raises concern about earnings quality or share-count-related pressure
Key Metrics to Watch
- Free cash flow trajectory and operating cash flow generation capacity
- Gross margin sustainability and inventory management efficiency
- Revenue growth acceleration and operating margin expansion
- Debt refinancing schedule and interest coverage maintenance above 2.5x
- Operating margin and gross margin trend
- Free cash flow and operating cash flow conversion
Carters Inc. (CRI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.80x current ratio provides a solid financial cushion.
CRI Profit Margin, ROE & Profitability Analysis
CRI vs Consumer Sector: How Carters Inc. Compares
How Carters Inc. compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Carters Inc. Stock Overvalued? CRI Valuation Analysis 2026
Based on fundamental analysis, Carters Inc. shows some fundamental concerns relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Carters Inc. Balance Sheet: CRI Debt, Cash & Liquidity
CRI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Carters Inc.'s revenue has declined by 16% over the 5-year period, indicating business contraction. The most recent EPS of $6.24 reflects profitable operations.
CRI Revenue Growth, EPS Growth & YoY Performance
CRI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $629.8M | $14.3M | $0.39 |
| Q3 2025 | $757.8M | $11.6M | $0.32 |
| Q2 2025 | $564.4M | $446.0K | $0.01 |
| Q1 2025 | $629.8M | $15.5M | $0.43 |
| Q3 2024 | $758.5M | $58.3M | $1.62 |
| Q2 2024 | $564.4M | $23.9M | $0.64 |
| Q1 2024 | $661.5M | $36.0M | $0.95 |
| Q3 2023 | $791.7M | $65.0M | $1.67 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Carters Inc. Dividends, Buybacks & Capital Allocation
CRI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Carters Inc. (CIK: 0001060822)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| May 15, 2026 | 4 | xslF345X06/wk-form4_1778876718.xml | View → |
| May 15, 2026 | 4 | xslF345X06/wk-form4_1778876671.xml | View → |
| May 15, 2026 | 4 | xslF345X06/wk-form4_1778876629.xml | View → |
| May 15, 2026 | 4 | xslF345X06/wk-form4_1778876591.xml | View → |
| May 15, 2026 | 4 | xslF345X06/wk-form4_1778876503.xml | View → |
❓ Frequently Asked Questions about CRI
What is the AI rating for CRI?
Carters Inc. (CRI) has a Combined AI Rating of SELL from Claude (STRONG SELL) and ChatGPT (HOLD) with 80% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CRI's key strengths?
Claude: Strong cash position of $473.4M provides near-term liquidity cushion. Moderate leverage with 0.61x debt/equity ratio and healthy current ratio of 2.80x. ChatGPT: Solid liquidity with $487.07M in cash and a 2.51x current ratio. Manageable leverage profile with 0.61x debt-to-equity and positive interest coverage.
What are the risks of investing in CRI?
Claude: Negative free cash flow of -$543K demonstrates the company is burning cash and cannot self-fund operations. Critically weak returns: ROE of 1.5% and ROA of 0.6% indicate severe capital inefficiency and shareholder value destruction. ChatGPT: Operating margin of 5.0% and net margin of 3.2% leave limited room for execution errors or demand weakness. Free cash flow is modest at $68.63M with only a 2.4% FCF margin, suggesting weak cash conversion.
What is CRI's revenue and growth?
Carters Inc. reported revenue of $681.1M.
Does CRI pay dividends?
Carters Inc. pays dividends, with $9.2M distributed to shareholders in the trailing twelve months.
Where can I find CRI SEC filings?
Official SEC filings for Carters Inc. (CIK: 0001060822) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CRI's EPS?
Carters Inc. has a diluted EPS of $0.39.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is CRI a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Carters Inc. has a SELL rating with 80% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CRI stock overvalued or undervalued?
Valuation metrics for CRI: ROE of 1.5% (sector avg: 18%), net margin of 2.1% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
Should I buy CRI stock in 2026?
Our dual AI analysis gives Carters Inc. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CRI's free cash flow?
Carters Inc.'s operating cash flow is $6.4M, with capital expenditures of $7.0M. FCF margin is -0.1%.
How does CRI compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 2.1% (avg: 8%), ROE 1.5% (avg: 18%), current ratio 2.80 (avg: 1.5).