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Here are 1-2 brief analogies to describe Carter's (CRI):

• Like The Gap or Old Navy, but exclusively focused on apparel and accessories for babies and young children.
• A specialized version of Target or Walmart, offering a full range of clothing and accessories, but only for the baby and kids' market.

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• Carter's Branded Apparel: Offers a wide range of everyday clothing, sleepwear, and accessories for babies, toddlers, and young children.
• OshKosh B'gosh Apparel: Provides durable, play-ready clothing, including its iconic overalls and denim, for children.
• Skip Hop Products: Features innovative and stylish baby products such as diaper bags, toys, gear, and nursery essentials.

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Carter's (CRI) operates a significant hybrid business model, generating revenue through both wholesale sales to other retailers and direct-to-consumer sales via its own branded stores and e-commerce websites. While its direct-to-consumer segment is its largest revenue driver, Carter's explicitly identifies major wholesale customers that account for a substantial portion of its total net sales.

Major Wholesale Customers:

According to Carter's annual filings, specific large retailers are identified as major customers due to the significant percentage of Carter's total net sales they represent:

• Target Corporation (TGT)
• Walmart Inc. (WMT)

For example, in fiscal year 2023, Target Corporation accounted for approximately 18% of Carter's total net sales, and Walmart Inc. accounted for approximately 10% of Carter's total net sales.

Direct-to-Consumer Customer Categories:

Through its direct-to-consumer channels (Carter's, OshKosh B'gosh, and Skip Hop retail stores and e-commerce), Carter's serves primarily individuals falling into these categories:

• Parents and Guardians: The primary demographic includes parents and guardians of infants, toddlers, and young children (up to size 14 for some brands) seeking everyday apparel, sleepwear, accessories, and related products for their children.
• Gift-Givers: Individuals purchasing gifts for baby showers, birthdays, holidays, or other special occasions for children, such as grandparents, aunts/uncles, and friends.
• First-Time Parents/Caregivers: Those preparing for a new baby, often looking for essential layette items, multi-packs, and foundational clothing sets.

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Douglas C. Palladini Chief Executive Officer & President

Douglas C. Palladini joined Carter's on April 3, 2025. Prior to his role at Carter's, he was the founder and owner of Kickstand, LLC, a consulting and advisory business focused on brand and consumer strategy, from April 2022 until March 2025. From July 2016 through March 2022, Mr. Palladini served as Global Brand President of Vans, a subsidiary of V.F. Corporation, having held various roles of increasing responsibility at Vans since June 2004.

Richard F. Westenberger Senior Executive Vice President, Chief Financial Officer & Chief Operating Officer

Richard F. Westenberger joined Carter's in 2009 as Executive Vice President & Chief Financial Officer. He was appointed Senior Executive Vice President, Chief Financial Officer & Chief Operating Officer in March 2024, and also served as Interim Chief Executive Officer from January 2025 to April 2025. Before joining Carter's, Mr. Westenberger served as Vice President of Corporate Finance and Treasurer of Hewitt Associates, Inc. from 2006 to 2008. From 1996 to 2006, he held various senior financial management positions at Sears Holdings Corporation and its predecessor organization, Sears, Roebuck and Co., including Senior Vice President & Chief Financial Officer of Lands' End, Inc. He was also with Kraft Foods, Inc. and began his career at Price Waterhouse LLP.

Sarah J. Crockett Chief Marketing Officer

Sarah J. Crockett joined Carter's in 2024 as Chief Marketing Officer. She previously served as Chief Marketing Officer of DICK'S Sporting Goods, Inc. from 2020 to 2024. Prior to that, she was Chief Marketing Officer of Vans from 2017 to 2020 and Chief Marketing Officer of Burton Snowboards from 2015 to 2017.

Julie A. D'Emilio Executive Vice President, Global Sales

Julie A. D'Emilio joined Carter's in August 2016 as Executive Vice President, Global Sales. From 2010 to 2016, she served as Group President, Wholesale at Ralph Lauren Corporation. Prior to that, Ms. D'Emilio held various leadership roles at Liz Claiborne Inc. from 1993 to 2010.

Emily D. Evert Chief Strategy Officer

Emily D. Evert joined Carter's in August 2025 as Chief Strategy Officer. Before joining Carter's, Ms. Evert served as a Managing Director and Partner at The Boston Consulting Group, Inc. from September 2021 through July 2025. Prior to that, she held various roles at AlixPartners, LLP from January 2014 to September 2021, including as a Director. Ms. Evert began her career with Alvarez & Marsal Holdings LLC.

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The key risks to Carter's (CRI) business are primarily influenced by macroeconomic conditions affecting consumer spending, a highly competitive market environment, and challenges within its supply chain, including rising costs and tariffs.

1. Macroeconomic Factors and Consumer Spending: Carter's business is highly sensitive to overall levels of consumer spending, confidence, and sentiment, particularly within the young children's apparel market. Elevated inflation rates and higher interest rates have negatively impacted consumer demand and retail sales, leading to lower traffic and demand in the U.S. and other international segments. This economic pressure can result in reduced discretionary spending by consumers, directly affecting Carter's sales and profitability.
2. Highly Competitive Market and Pricing Pressures: The company operates in an intensely competitive market for young children's apparel, facing significant competition from both branded and private-label manufacturers. This competitive landscape, along with a promotional retail environment, creates pricing pressure that can lead to lower margins and may require promotional pricing to move excess inventory, negatively impacting profitability. The emergence of online competitors has also intensified this pressure.
3. Supply Chain Disruptions, Increased Costs, and Tariffs: Carter's faces ongoing risks related to its supply chain, including inflationary pressures on critical cost components such as raw materials, labor, and transportation. The company's reliance on third-party manufacturing, predominantly in Asia, exposes it to potential supply chain disruptions and geopolitical tensions. Additionally, trade policies and tariffs have historically threatened Carter's cost structure, leading to higher product costs and impacting gross margins, although the impact can fluctuate with trade agreements.

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• Proliferation of Specialized Direct-to-Consumer (DTC) Children's Apparel Brands

  The rapid growth of online-first, specialized children's apparel brands directly challenges Carter's broad market appeal. These agile DTC companies often focus on niche segments such as organic, sustainable, gender-neutral, or uniquely designed clothing and specialized items like premium sleepwear. Leveraging social media for brand building and direct-to-consumer sales channels, brands like Little Sleepies and Kyte BABY have quickly gained significant market share by catering to specific parent preferences and offering a distinct customer experience, fragmenting the broader children's apparel market.

• Aggressive Expansion of Ultra-Low-Cost Fast Fashion E-commerce Giants

  Global fast-fashion platforms such as Shein and Temu are aggressively expanding their offerings in children's apparel. These companies provide an enormous variety of trendy clothing at exceptionally low price points, driven by rapid production cycles and sophisticated digital marketing. Their ability to quickly introduce new styles at prices often significantly lower than traditional retailers poses a substantial threat to Carter's, particularly in the value segment, by eroding market share and exerting downward pressure on pricing across the industry.

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• The North American apparel market focused on newborn to 10-year-old children was valued at $34 billion in 2022.
• The United States children's wear market was valued at approximately USD 52.55 billion in 2024 and is projected to reach USD 77.04 billion by 2034.
• Globally, the children's wear market is valued at USD 284.68 billion in 2025 and is projected to climb to USD 378.95 billion by 2030.

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Here are the expected drivers of future revenue growth for Carter's (CRI) over the next 2-3 years:

1. Strategic Price Increases: Carter's plans to drive future revenue growth through price increases across its product assortments. This strategy is primarily aimed at offsetting the impact of higher tariffs and is expected to be a significant contributor to revenue gains in 2026. The company has already seen mid-single-digit average unit retail (AUR) increases in its U.S. retail business.
2. Growth in U.S. Retail and International Segments: The U.S. Retail and International segments have demonstrated consistent strength and growth. Carter's intends to capitalize on these segments, with U.S. retail showing positive comparable sales for two consecutive quarters. The company is also focused on geographic expansion, particularly in markets with higher birth rates like Brazil, to drive international growth.
3. Expansion of the Baby and "Age Up" Categories: The baby category continues to be a strong performer, with robust sales growth. Additionally, Carter's "Age Up" initiative targets apparel sales for children aged four to ten years old, a market significantly larger than the combined baby and toddler apparel markets, presenting a substantial growth opportunity.
4. E-commerce Growth and Digital Platform Enhancements: Carter's expects its e-commerce sales to grow to nearly 50% of its total U.S. retail sales over the next five years. The company aims to leverage digital platforms and enhance consumer experiences to drive this growth, indicating a continued focus on its online channels.

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Share Repurchases

• In fiscal year 2024, Carter's returned a total of $166.7 million to shareholders through cash dividends and share repurchases.
• During the first three quarters of fiscal 2024, the company repurchased and retired approximately 0.7 million shares of its common stock for $50.5 million.
• As of August 19, 2021, Carter's had approximately $650.4 million remaining under outstanding share repurchase authorizations with no expiration date.

Capital Expenditures

• For fiscal year 2025, Carter's projects approximately $65 million in capital expenditures.
• In fiscal year 2024, capital expenditures were $65 million. These expenditures primarily focused on U.S. and international retail store openings and remodels, investments in distribution facilities, and strategic information technology initiatives.
• Capital expenditures were $60 million in fiscal year 2023.