What happened?
Shares of children’s apparel manufacturer Carter’s (NYSE: CRI) fell 3.9% in the afternoon session after the company reported third quarter fiscal 2026 financial results and moderated its full-year 2026 revenue outlook. According to a company press release, Carter's reported revenue of $752.5 million for the third quarter of fiscal 2026, which was flat year on year, and adjusted earnings per share of $1.03. Revenue was in line with Wall Street's estimate of $749.5 million, while adjusted earnings per share was above analysts' expectations of 85 cents. For the fourth quarter of fiscal 2026, the company guided revenue to $870 million at the midpoint, which was below analysts' expectations of $924 million. The company moderated its full-year 2026 revenue outlook due to persistent consumer pressure stemming from economic and geopolitical uncertainty. Separately, the company announced an evolution of its leadership structure aimed at advancing its growth strategy by improving alignment across product, sales, brand, and operations.
The shares were trading at $31.88, down 4.5% from the previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Carter's? Access our full analysis report here, it’s free.
What is the market telling us
Carter’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 16.9% on the news that the company reported first-quarter calendar 2026 results that surpassed analyst expectations for revenue and profit, and provided strong guidance for the upcoming quarter. The children's apparel maker announced that its net sales grew by 8.1% year-over-year to $681.1 million, and same-store sales rose 10.5%. While adjusted earnings per share of $0.39 was lower than the same period in the previous year, it significantly beat Wall Street's consensus estimates. Looking ahead, Carter's projected second-quarter adjusted earnings of about $0.04 per share, which is much better than the loss analysts had anticipated.
Carter's is down 4% since the beginning of the year, and at $31.88 per share, it is trading 28.2% below its 52-week high of $44.37 from February 2026. Investors who bought $1,000 worth of Carter’s shares 5 years ago would now be looking at only $312.51.
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