What Happened?
Shares of children’s apparel manufacturer Carter’s (NYSE:CRI) jumped 16.9% in the afternoon session after the company reported first-quarter calendar 2026 results that surpassed analyst expectations for revenue and profit, and provided strong guidance for the upcoming quarter.
The children's apparel maker announced that its net sales grew by 8.1% year-over-year to $681.1 million, and same-store sales rose 10.5%. While adjusted earnings per share of $0.39 was lower than the same period in the previous year, it significantly beat Wall Street's consensus estimates.
Looking ahead, Carter's projected second-quarter adjusted earnings of about $0.04 per share, which is much better than the loss analysts had anticipated.
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What Is The Market Telling Us
Carter’s shares are very volatile and have had 27 moves greater than 5% over the last year. But moves this big are rare even for Carter's and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 21 days ago when the stock gained 3.6% on the news that UBS analysts suggested the company had a solid first quarter and would likely raise its full-year profit forecast.
The investment firm's checks indicated that Carter's performance would lead to an earnings per share beat of 4 cents. UBS also believed that an improved gross margin outlook, stemming from more favorable tariff rates, would allow the company to lift its fiscal 2026 earnings per share guidance.
The firm projected Carter's would move its guidance to a range of $3.20 to $3.40, an improvement from the prior forecast of $2.95 to $3.08. This updated view, if realized, was expected to push Wall Street's average estimate of $3.06 higher and boost the stock.
Carter's is up 16.9% since the beginning of the year, but at $38.81 per share, it is still trading 12.5% below its 52-week high of $44.37 from February 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Carter’s shares 5 years ago would now be looking at only $357.13.
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