Short answer
CARTERS INC (CRI) filed its fiscal 2026 10-K annual report with the SEC on Feb 27, 2026.
- Top risk flagged: Regulatory/legal risk: Incremental tariff-related costs increased product costs by approximately $60 million in fiscal 2025
CARTERS INC FY2026 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business: North America’s largest apparel company focused exclusively on babies and young children with iconic brands Carter’s and OshKosh
- New toddler brand Otter Avenue launched July 2025 emphasizing independence, fashion-forward styles
- Strategic emphasis on sustainable clothing via Little Planet brand launched 2021 with GOTS-certified organic cotton
- Market share: Carter’s brands hold #1 U.S. infant/toddler apparel market position with 9% market share as of Dec 2025
- Operates 1,068 retail stores, ~19,500 wholesale locations in North America, plus international presence in 90+ countries
Management Discussion & Analysis
- Operating cash flow $122.3M, down 59.1% YoY due to lower net income and higher inventory purchases from tariffs
- Capital expenditures $53.7M, down 4.5% YoY; planned capex ~$55M for retail stores, distribution, and IT in fiscal 2026
- Financing cash flow $2.0M provided vs. $174.8M used prior year; driven by $575M senior notes issued and $500M notes redeemed
- No share repurchases in fiscal 2025; $599M remaining buyback capacity; dividends $1.55/share down from $3.20/share in prior year
- Management expects cash, operations cash flow, and $743.7M ABL facility borrowing capacity adequate for working capital and capex needs
Risk Factors
- Regulatory/legal risk: Incremental tariff-related costs increased product costs by approximately $60 million in fiscal 2025
- Geopolitical/macroeconomic threat: Unfavorable foreign currency exchange rates reduced consolidated net sales by $6.7 million in 2025
- Operational/supply chain vulnerability: Tariff-related cost pressures leading to raised prices, production mix changes, and cost-sharing with vendors
- Competitive/market disruption risk: Decreased demand and sales for Simple Joys brand in U.S. Wholesale segment due to shifts in Amazon partnership
- Financial/structural risk: Increased interest expense by $2.9 million to $34.2 million driven by overlap of senior notes and higher interest rate on $575 million notes due 2031
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