Stock Alert: Carter's Drops 12% On Earnings Results

(RTTNews) - Shares of Carter's, Inc. (CRI) are down more than 12% Monday morning after the apparel retailer missed fourth-quarter earnings estimates.

Net income in the fourth quarter decreased 4.1%, to $125.1 million, or $2.82 per share from $130.6 million, or $2.83 per share, in the same quarter a year ago. Excluding items, adjusted EPS of $2.81 missed average estimates of analysts polled by Thomson Reuters at $2.89.

The decreased profitability in the quarter was due to continued investments in the business and higher inventory-related costs.

Net sales, however, grew 1.3% year-over-year to $1.1 billion. The consensus estimate for revenue matched at $1.1 billion.

For the first quarter, the company projects net sales to be comparable to the first quarter of fiscal 2019 and adjusted earnings per to be approximately $0.60. Analyst project earnings of $0.95 on revenue growth of 3.5%.

For the full-year, Carter's expects net sales to increase approximately 2% to 3%. Analysts see revenue growth of 3.1%.

The company is closely monitoring the outbreak of coronavirus in China, as it is planning to source 15% of its products from China in 2020. The company's suppliers also source a significant amount of fabric from China. Carter's guidance does not include any adjustments for potential effects of the coronavirus situation.

CRI is currently trading at $97.46 and has traded in a range of $81.54- $112.46 in the last one year.