The net sales of Carter’s, the largest branded marketer in North America of apparel exclusively for babies and young children, has decreased $45.7 million, or 6.1, to $700.7 million in the second quarter of fiscal 2022, driven by declines in the company’s US retail and US wholesale sales, partially offset by growth in its international sales.
US retail and US wholesale net sales declined by 11 per cent and 3 per cent, respectively. International net sales grew 7 per cent. US retail comparable net sales declined 8 per cent. Changes in foreign currency exchange rates used for translation in the second quarter of fiscal 2022, as compared to the second quarter of fiscal 2021, had an unfavorable effect on consolidated net sales of approximately $2.3 million, or 0.3 per cent.
The net sales of Carter’s, the largest branded marketer in North America of apparel exclusively for babies and young children, has decreased $45.7 million, or 6.1, to $700.7 million in the second quarter of fiscal 2022, driven by declines in the company’s US retail and US wholesale sales, partially offset by growth in its international sales.
Operating income decreased $32.2 million to $75.4 million, compared to $107.6 million in the second quarter of fiscal 2021. Operating margin was 10.8 per cent, compared to 14.4 per cent in the prior-year period. Adjusted operating income (a non-GAAP measure) decreased $35.0 million to $75.4 million, compared to $110.4 million in the second quarter of fiscal 2021. Adjusted operating margin was 10.8 per cent, compared to 14.8 per cent in the prior year period, reflecting higher ocean freight rates, increased inventory provisions, and fixed cost deleverage on lower sales, partially offset by lower air freight expenses, lower performance-based compensation provisions, and reduction of other discretionary spending, the company said in a press release.
In the first half of 2022, net sales decreased $51.8 million, or 3.4 per cent, to $1.48 billion, driven by a decline in the company’s US retail segment, partially offset by growth in its International and US wholesale segments. US retail net sales declined 10 per cent, reflecting the comparison to the first half of 2021 which benefited from significant and unprecedented government stimulus payments made to consumers in response to the pandemic and a lower store count related to the closure of low-margin stores. US retail comparable net sales declined 7 per cent. International and the US wholesale net sales increased by 9 per cent and 3 per cent, respectively. Changes in foreign currency exchange rates used for translation in the first half of fiscal 2022, as compared to the first half of fiscal 2021, had an unfavorable effect on consolidated net sales of approximately $2.5 million, or 0.2 per cent.
“After a strong start to the year, our sales slowed in the second quarter,” said Michael D. Casey, chairman and chief executive officer. “In 2021, the United States government provided unprecedented stimulus payments and support to families with young children to help them recover from the pandemic. The absence of that support this year, together with the surge in gas prices and inflation, has weighed on consumers’ demand for our brands.
“Since the pandemic began, year-over-year comparisons have been affected by historic challenges and the related disruption to the lives of families with young children. Our performance relative to the pre-pandemic period reflects our progress increasing the profitability of Carter’s. By that measure, our earnings are significantly higher in 2022 and have been driven by the structural improvements made to our business since 2019,” explained Casey.
“We have revised our outlook for the balance of the year to reflect the trends in our business, and market risks related to inflation and related impact on consumer demand. We are focused on mitigating the effects of the current retail environment, including reducing inventory commitments and discretionary spending. We plan to continue investing in our direct-to-consumer, merchandising, brand marketing, and pricing capabilities which we believe will enable us to achieve our longer-term growth objectives,” added Casey.
Fibre2Fashion News Desk (RR)
