Carters Inc

CRI

Apparel & Other Finishd Prods of Fabrics & Similar Matl

Mkt Cap

$2.479B

PE

12.23

Debt

$567.2M

Cash

$169.1M

EV

$2.877B

FCF

$455.7M

Market Cap

$2.479B

P/E Ratio

12.23

Debt

$567.2M

Cash

$169.1M

EV

$2.877B

FCF

$455.7M

Carter's, Inc. is a marketer of young children’s apparel in North America. Its segments include U.S. Retail, U.S. Wholesale, and International. The U.S. Retail segment includes sales of products in the United States through its retail stores and eCommerce websites. The U.S. Wholesale segment consists of sales in the United States of products to its wholesale partners. The International segment includes sales of products outside the United States, through its retail stores and eCommerce websites in Canada and Mexico, and sales to its international wholesale customers and licensees. It owns Carter’s and OshKosh B’gosh brands. These brands are sold in department stores, national chains, and specialty retailers domestically and internationally. They are also sold through nearly 1,000 Company-operated stores in the United States, Canada, and Mexico and online at www.carters.com, www.oshkosh.com, www.cartersoshkosh.ca, and www.carters.com.mx. It also owns Little Planet and Skip Hop brands.

Sector

10-Q
7/1/23
10-Q
4/1/23
10-K
12/31/22
10-Q
10/1/22
10-Q
7/2/22
10-Q
4/2/22
10-K
1/1/22
10-Q
10/2/21
10-Q
7/3/21
10-Q
4/3/21
10-K
1/2/21
10-Q
9/26/20
10-Q
6/27/20
10-Q
3/28/20
10-K
12/28/19
10-Q
9/28/19
10-Q
6/29/19
10-Q
3/30/19
10-K
12/29/18
10-Q
9/29/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/30/17

DCF

Discounted Cash Flow Valuation of Carters Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$455.7M	$435.2M	$415.6M	$396.9M	$379M	$362M	$345.7M	$330.1M	$315.3M	$301.1M	$287.5M	$2.875B
DCF		$378.4M	$314.2M	$261M	$216.7M	$180M	$149.4M	$124.1M	$103.1M	$85.59M	$71.07M	$710.7M
Value	$2.594B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 0.028%

Earnings Stability 0.00074%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	01-2015	01-2016	12-2016	12-2017	12-2018	12-2019	01-2021	12-2021	12-2022	TTM
Net Margin	6.6%	7.8%	8%	8.8%	8.1%	7.4%	3.6%	9.6%	7.7%	6.8%
ROA	18%	20%	22%	20%	19%	14%	5.6%	16%	16%	13%
ROE	24%	27%	32%	35%	32%	30%	12%	35%	31%	26%

What is the average Net Margin?

The average Net Margin over the past 5 years is +7.54%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.14%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +14.93%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.21%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +29.13%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.84%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	01-2015	01-2016	12-2016	12-2017	12-2018	12-2019	01-2021	12-2021	12-2022	TTM
Debt FCF	3.27	2.86	2.07	2.37	2.03	1.83	1.78	4.30	12.85	1.24
Debt Equity	0.74	0.67	0.74	0.72	0.68	0.68	1.05	1.04	0.77	0.72
MIN
Graham Stability	-	-	100%	100%	100%	94%	39%	100%	100%	39%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 1.24.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 1.69.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.39.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	01-2016	12-2017	12-2019	12-2021	Trend
Revenue	0.92%	-1.1%	-3%	-7.9%	-1.4%
Net Income	0.64%	-3.9%	-2%	-27%	3.5%
Stockholders Equity	-1.3%	-1.5%	-3.3%	-16%	-2%
FCF	-19%	-29%	-47%	-79%	-45%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is -1.13%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -1.36%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -3.89%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +3.48%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -1.46%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -1.97%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -28.68%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -44.73%.