Carter’s Intrinsic Value Calculator – 2023: Carter’s Closes North American Retail, Terminates Head
March 14, 2023
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2023 marks a dramatic change for Carter’s ($NYSE:CRI), as the well-known and beloved children’s clothing brand announces that it is closing its North American retail operations and terminating the employment of its North American retail head. The abrupt decision has been met with shock and confusion, as Carter’s had been a beloved staple in the North American retail space for decades. The move comes as a surprise, as the company had been steadily growing over the past few years, with particularly strong sales in its North American market.
However, it appears that the company has decided that the cost of maintaining its retail stores outweighs the benefits they offer, leading them to shutter the brick-and-mortar locations. The decision has caused some controversy, as many believe that Carter’s is not taking the necessary steps to ensure its employees are taken care of. Despite this, the company remains committed to its online presence and continues to grow its e-commerce operations. The future of Carter’s is uncertain, but the brand has vowed to continue providing quality clothing for children everywhere, regardless of their presence in physical stores.
Share Price
On Monday, Carter’s made a major announcement that they will be closing all of their North American retail stores and releasing their head, eliciting mixed reactions from media. Despite the news, media sentiment towards Carter’s remains mostly positive. CARTER’S stock opened at $74.2 on Monday and closed at $72.5, a decrease of 3.6% from the previous closing price of $75.2. This announcement comes as the company strives to focus on its digital presence and strengthen its online business amidst the challenging retail market. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Carter’s. More…
| Total Revenues | Net Income | Net Margin |
| 3.21k | 246.32 | 8.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Carter’s. More…
| Operations | Investing | Financing |
| 88.36 | -40.36 | -819.27 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Carter’s. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.44k | 1.64k | 21.13 |
Key Ratios Snapshot
Some of the financial key ratios for Carter’s are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -3.0% | -1.2% | 11.2% |
| FCF Margin | ROE | ROA |
| 1.5% | 28.4% | 9.2% |
Analysis – Carter’s Intrinsic Value Calculator
At GoodWhale, we recently conducted an analysis of CARTER’S’s wellness and have found that their fair value is around $137.7, as determined by our proprietary Valuation Line. Currently, the stock is trading at $72.5, meaning that it is undervalued by 47.3%. We believe that this presents a good opportunity for investors to buy into the company, as it is likely to gain value in the future. We recommend that potential investors keep a watchful eye on CARTER’S’s stock, as it could be a great long-term investment. More…
Peers
The company’s competitors include Children’s Place Inc, Apranga APB, and Boot Barn Holdings Inc.
– Children’s Place Inc ($NASDAQ:PLCE)
Children’s Place Inc is a publicly traded company with a market capitalization of 506.93M as of 2022. The company’s return on equity is 55.72%. Children’s Place Inc is a specialty retailer of children’s apparel and accessories. The company operates through two segments: North America and Europe. Children’s Place Inc offers a variety of merchandise, including clothing, footwear, accessories, and gifts. The company was founded in 1969 and is headquartered in Secaucus, New Jersey.
– Apranga APB ($LTS:0KJF)
As of 2022, Apranga APB has a market cap of 103.12M. The company’s return on equity is 19.95%. Apranga APB is a Lithuanian clothing retail chain. The company was founded in 1989 and is headquartered in Vilnius, Lithuania. Apranga APB operates in Lithuania, Latvia, and Estonia. The company operates a chain of stores under the Apranga and APB brands. Apranga APB offers a range of clothing, footwear, and accessories for men, women, and children.
– Boot Barn Holdings Inc ($NYSE:BOOT)
As of 2022, Boot Barn Holdings Inc has a market cap of 1.71B and a Return on Equity of 23.87%. The company is a retailer of western and work-related footwear, apparel, and accessories for men, women, and children.
Summary
Investment analysis of CARTER’S has been mostly positive since the company announced its decision to close its North American retail operations and terminate its head in 2023. Furthermore, their stock price dropped the same day of the announcement, suggesting that the market is not in favor of this move. Investors should consider the potential short-term effects of the closure, such as reduced revenue and loss of consumer trust, while also looking into the long-term benefits of the decision, such as improved efficiency, increased cost savings and higher profits. Additionally, investors should also pay attention to recent consumer trends to better understand the potential impact of the closure on CARTER’S future performance.
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