Carter's (CRI) 25 Feb 222021 Q4 Earnings call transcript

00:03 Welcome to Carter's Fourth Quarter 2021 Earnings Conference Call.

On the call today are Michael Casey, Chairman and Chief Executive Officer; Richard Westenberger, Executive Vice President and Chief Financial Officer; Brian Lynch, President; and Sean McHugh, Vice President and Treasurer. After today's prepared remarks, we will take questions as time allows. 00:30 Carter's issued its fourth quarter 2021 earnings press release earlier this morning. A copy of the release and presentation materials for today's call have been posted on the Investor Relations section of the company's website at ir.carters.com. and let call you presentation and the outlook, begin, on statements materials we forward-looking company's conference are this in plans Before me that remind made about statements. XX:XX performance future the company's Actual results may from projected. materially differ those

of will most discussion cause could materials A quarterly the measurements On to being filed And now, recent financial those is over annual non-GAAP the non-GAAP that Please vary please refer Also, release reference financial the Securities recorded. measurements actual forward-looking with Commission XX:XX go presentation in call sir. and posted the company factors ahead, in materials. company's various is earnings company's financial reconciliation statements, to and of and to turn to from conference like provided website. GAAP a call, For this I'd results Mr. and contained the the the measurements. to Exchange Casey. company's on the reports XX:XX presentation these the today's

Good very us joining the on Thanks Thanks for morning, XX:XX call. everyone. much.

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pay growth continued to we and debt adjusted of XX%. expected share forecasting our per share XX% Given earnings down repurchases, are

affect on quarter amount We business. healthy first XX:XX issues a XX, half facilitate first the continued quarter cash, will performance. believe and regard generate there will of to which are With which we investment some comparability to the expect page in first

I affect we operating means did ago. likely year Easter month from later costs $XXX this net in of All year which net in important adjusted in the performance our first of if issues in year in million XX:XX very in benefited year, government over the Finally, XXXX. to store of some quarter our to sales range we're year-over-year of the revenue expecting and successful quarter that $X.XX last of profitability the achieved volume on adjusted year to a the the said, closures what to $X.XXX is products million transportation in than are it's in that million billion in a of March $X.XX $XX billion, continue late to April the comparability adjusted which XX:XX adjusted and million, to we've later and retail other segment. in in to $XXX weeks quarter, of for page. arrive up first-half would part were XX% and million to expectations We're and We're with summarized of operating be less elevated. first our XX:XX said, $XXX expected a note record which the significant of $X.XX. first even roughly was particularly earnings will sales $X.XX. and As with first the we EPS range Our the to expecting of of in $XXX half million, comparing growth $X.XXX income result of the remain couple sales to the XX% we $XX will range forecast second have reported last the early last It's first-quarter quarter EPS high just volume also March. strong stimulus, summarize, to bottom holiday-related with income

across first-half your the we're take questions. these Here pre-pandemic With first XXXX made again, business, the performance. XX:XX we've profitability to XX% believe improvements we will remarks, meaningfully, our up half be ready about over

America. question you Thank Bank [Operator from Our Instructions] XX:XX of first comes Nardone with Chris

open. is line Your go Please ahead.

XX:XX you, good guys, and morning. Thank

XX:XX morning. Good

throughout And the you -- margin be to you're chain supply morning. 'XX particular, year just cadence Relative cadence can expecting us the the outlook, you you're when in on price the if very helpful? good give will would Relative and your can to you. kick-in? improve your some gross on that to fiscal when increases discuss Thank situation XX:XX

XX:XX Hi Chris.

were other the vaccination for -- rates most their encouraged XX%. than we the year are vaccination production Vietnam, rates improving. that over time improvement vaccination countries levels gradual the many by XX%, This major What with business is less Cambodia, through last very are us employees year. parts of expecting low suppliers the had do we're probably rates, XX%. So very Today Asia other are rates in attendance we're -- over

So production levels were are meaningfully better year. last than they

our But is we expecting will West on improve this of half, the in it, delays mean, that transportation through that through -- XXXX pandemic. than about, tell, we that the the read So way year. continue expect of things have time this will the We -- year. to improvement. be the it that, last balance all tell. increases was the delays we've you've that worst I The probably the improve 'XX Price reported issue Coast will one will we last ports. we're is worked particularly expecting second for of but gradual improvement. year things than increases, this 'XX recent and of year, the recently think I will they even will be Coast, have on But 'XX they suggest things XX:XX year, our Maersk improving transportation transportation sluggish had better we're think continue worst I things are half, largest to time gradual yes, the will are be in would quarter better providers West price first every was articles

-- the the margin more Richard? going in our margin to offerings profile, full taken up. prices are increases we've spring product we've margin So for up our pricing with and objectives achieve to us help taken up And respect than cost

XX:XX year-over-year the year. the Yes, the margin in lower that, more higher is to the half closures Gross and store bit Chris. of pronounced affecting take is the couple a second impact the There's expected first factors of year I'll of in first half half. be in of

of in So retail be will mix a bigger second part half. our the

air So freight year. costs, it's the second of rich localized -- more the was of the business. of half part that's -- to specifically gross margin higher impact transportation Also the last margin

that second moderates in half. and gross margin pressure So should the benefit

the of we in late first we've on fourth was last it quarter product quarter what of Even thought but wasn't fall Yeah. some the the about rate year. taken XX:XX be, fourth it X. the in quarter that deliveries would The half cancellation

offering clear quarter. residual late the fall the moving So the in right, came the fall, first the we of so product, can some out fall to of arriving product keep late you that will in

than small X% a be they be quarter, our the elevated total less So, first but in total -- elevated, be sales. the sales as year-over-year a than closer a probably sales XXXX off-price like percentage sales first in bit that'll in But will that'll and X% will less relatively be off-price were still quarter. of of

whatever Just was to offering out from full year. last of clear the product left

XX:XX Got it. you. Thank

welcome. are You XX:XX

to at XX:XX Lejuez Paul We'll next Citi. go

is ahead. line Your Please open. go

XX:XX Paul. This our taking Hey guys, Thanks on Kelly for question. is for Crago

but relative fourth could for you sales wholesale in what's out wholesale down curious the if us we're beat levels. year parse Just still business. quarter, to the expectations for the X% about happening US XXXX in

I'm seems just feeling more their this curious driving about So the what's at stores businesses. point department It that? like are even optimistic

be thinking just So how and the about business should what's happening there curious F’XX? in we wholesale

about good XX:XX $XX wholesale, inventory did about and that so for troubled Yes, folks we we was do before that. compared million, are of gone of sales And X $XX half better with rest last year, really XXXX, million, meaningfully it. retailers. when Kelly. down They reasons we One have We the that management about think them our I to out of business did is, with exposure was, team, to feel less it's business. we the less really then reduced some off-price the

good. outlook But the reasons. X 'XX really are is main for those very our So

are year We sales expect up mid-single planned good year, demand this full digits. about

And said, top by to fall return even closer operating well forecast received X level. growth customers going price all that and wholesale has would our through the of as our think increases margins way to I with pre-pandemic accounts. Mike been we show X that our we're our expect XX:XX have

going Mike I we're a which now, articulates. year's the caused working off-price last And comparable, levels it business our that's transportation third sales service good, So predictable. should be run about business year, that to hard are be more to good by to been improve lower level, of replenishment has makes think a delays then

inventory learned, less what margin you heavy good higher when on about a inventories it pandemic, you're lot on a we like than inventory. retailers leaned with leaner business just XXXX. much can XX:XX they was during And driving with inventory, wholesale today Wholesale a overall, XXXX A feel inventories, leaner learned healthier business. you're and business. run is lot we the of had forward on in So the

than business XXXX. in much a it healthier So was it's wholesale

XX:XX Got were first could sales detail it. is question, quarter? I expecting. I just Good to you're but us down understand you hear did how you there. mean, help -- the mid-single there, the think just second you than give then thinking And some digits about worse us

to, So January How did of the so business what seeing see and look in first the that against it trend assuming as what are curious March in far currently smaller you're you you stimulus you big do upfront you're quarter? just you're seeing went the played business up the for a last stimulus? sort not And given that guiding business in much role as as in year? if down the

Yes. XX:XX

few a just things Just words. Kelly, few

poured it. Gucci, number right our trying going their is saw over to year lines the in like (ph) never but Gucci, the next April from anything door fancy to in next and to First-quarter first mall A you Tiffany in XX get us here and of year Rooney's Atlanta. quite into had the and into deep a quite lines quarter anything help, the we're nearly part right register smallest did that $X ringing, of [Fips] last stimulus got trillion economy the

their had so January, was us fundamentally most with we holidays again, from about we it first our you so We because Omicron. the trends. economy, Omicron, quarter. quarter I much strong colleagues when get benefited planned profitable, would of of someone got a business XX:XX have more first the family to think quarter XX% a quarter, first young got little came So children. softer What back January of this I all into and So helped to XXXX. for money lot the fourth families from first-quarter I we up on profits a year stronger, poured that. good, of this are out in and because was say, that we too point our focused the I from relative the very is worry of wiped our don't said the

relatively ahead be XX:XX in the March last President's our So largest this first end what's ringer, sales the some at month of February and in particularly then bell good, is was dip but the in context of was January. Day business us, very January small will we very, the a for year. good of and February saw to weekend year half -- compared us. are February of in the tail was of

of get wardrobes we March to the start closer change more the to family weather country the gear. out turn, warm As the for weather more starts parts to up, warmer

them benefit we quarter, later, Easter get Easter You the and a Easter. year week you might you that end to of XX:XX last time little in parts first quarter. By April closer visibility Weather first year. in that behind bit turned It's this get this is two have later of on Easter of like the the been it's increases. we'll of week have a get little benefit Asia, again don't country, first but to we more second when the is have from the will it year, product the from price we'll weeks better flowing in how be consumer at will update receptivity the us. April,

underway. -- have time is how you time more the year getting we'll by So the we early, update for sense a of next it's it's very

XX:XX you. Thank Got it. of Best luck.

Kelly. Thanks XX:XX

XX:XX We'll Susan Anderson B. Riley. with go next to

Your open. Please line is ahead. go

today. have drivers the to operating It on line, of up. goals. also details moving XX% biggest I biggest top talk the I just XX:XX could line, maybe Hi, that the guess is maybe retail like you're about curious, just I was changed -- versus And on margin and on you versus the kind for that change digit. Thanks looks long-term of like your of low buckets grow the pre-COVID looks all you're it morning. single the good the wholesale then expecting goal think mid-single-digit if

Thanks. growth, or what's greater dynamics wholesale curious that just going space So its on? driving gains other

Sure. XX:XX

it's a by as in sales, by we single share $X sales raised shared in we've as that relative So low now it's projecting it billion with what wholesale that retail. And with year growth XXXX, Richard in the to international outlook to going projecting our mid-single-digit retail, be you relates -- to ago eCommerce. we're driven and and largely

up people where the $XXX and of to That's stores close pick rather growth located million use at we're at we're Susan, call there eCommerce benefit driven home. the people in are over will call million then the home in shopping. over sales, that -- largely growth that's half come the by by growth to projecting of that's but in that over XX:XX convenience by exclusive billion of by if sales love what the $X.X shopping one be stores what So round projecting driven it, but largely And product it from stores, of their omnichannel $XXX our will numbers was swinging retail, and eCommerce, projecting wholesale the of supported brands. here, in have I'll we call our

So to benefit $XXX a a there XX% to of million business. then that growth people but from over Individually at Walmart, during and by was was the we will from in then Amazon projecting rich pandemic, more expect And we'll Target, Walmart of and other from Amazon international balance we the there Costco, that. and shopping Canada international and growth continue retailers, started margin benefited disruption, smaller collectively Mexico, international -- relationships. be small that driven multinational retailers

in year product over the we operating to helpful last offering. XX:XX our in as wholesale sure wholesale in of good baby -- On Walmart shopping the we families Keep international. Target projecting particularly projecting as much the particularly margin shopping want million wholesale are essential mind, and had we we them, are income, at margins expansion because those thought would be earnings, Those got lifted product clobbered to products, core components in make a and customers. with experience $XXX

and business for the business be and That's maintain our nice we're is projecting We for is and rich operations us. margin this margin manage Canada Amazon fraction of forward, to going growth Mexico. in expansion in again, so, that year source the very a that year, last in we're won't don't of outperformance we abnormal, it million a ahead. in progress it for have going mobile reinvested will expect be experience this app. the will years airfreight that level we're is current over for $XX our of the highly this planning which model take We're year, we digital assumptions, the well And consumers. a International, seeing in so That's we the and to with app, experience, retail. margins mobile earnings great us us the of experience, highly-rated experience, good-margin some to continue seeing our in app, in store brand online a

we work a paying plan it back going and interest to to announcing good has didn't on that business. during going with cost That's will of connect are into benefit just that close low-single-digit we're We're seeing this more was need we leaner we that stores, we optimization. consumers. open SKU to That effective as a progress year. as driver We're gone part mix with stores, we're because pandemic-related Richard we're sourcing you, plan move forward, lower margin focus margin margin the margin we great margin have on repurchase going $X.X have to to our the XX:XX eCommerce to we higher we of we'll morning. way the XX% stores going continue have pandemic, share with that highest rich from run will through The sales. expecting billion. a So inventories. margin price in Thankfully, low are realization, fewer going we're on And to get to shared margin, improving margin, over have improve a continue financing big XX:XX will efficiencies this then going a

guys That’s versus you one just XX:XX follow-up. unit XXXX then for And was really guess Great. say what helpful. AUR I I Did could add if growth?

XX:XX Sure.

close that by. have We

year. year for up the for about XX So 'XX, the units X up for and X, the was pricing the were

Thanks again, this that's XX:XX Great, helpful. much year. good really luck so

Susan very Thanks XX:XX much.

Hardt. Our comes next at question Monness, from Chartier XX:XX Crespi, Jim

Your line is open. Please ahead. go

for thanks I'm morning, from promotional curious your returning? Good the promotions you're a any Have activity in retail question. taking what assumption my And market. you in seen promotions then XX:XX seeing XXXX. for what's

back we've less 'XX content realization -- promotional focused goods the demand say, that would ineffective highly said, people and back versus continues were chasing, improving and driving times throughout promotional. was promotions I good. in as and emotional brand really price the Jim, the market couponing many walk get be walk our We as in to XX:XX and people we on really

I would the market promotional. say So overall was less

going everybody's inflation be delays the been forward significant to here transportation input dealing same it expect there has some and with with of the We costs.

to goods. going paid try good every for retailer the to think more get I

key trying years? I question your on XX:XX into you up about wholesale are future how the into Great. planning mid-single-digit accounts? out visibility to just looking far talk Could previous X And Are growth. following you X, you plus wholesale guess, about the with out growth?

Well, plans from have our we based our X-year and on wholesale XX:XX customers. it's input

So a wholesale key our we customers. multi-year good for plans have growth

there? you could today? business about finally, big then opportunity you as us remind then Mexico? And the And see is Great. what ultimate talk XX:XX just that How market

That's we're to in XX:XX $XX revenue Jim, business. over the a looking store about double and million little basically today,

significant be over So to years, a expect X the we'd next it contributor. much more

you. thank XX:XX Great,

XX:XX Welcome.

our And question final XX:XX will from UBS. come Sole Jay with

go line open. Please is Your ahead.

thank April is your later you last in much. April guidance, of much Easter the the just with impacting year middle how Let's the that year being is first-quarter one. Great, XX:XX versus just My early start this on question guide? so

estimate volume $XX of XX:XX that I'd a to Jay. $XX million shifting,

percentage business -- guidance on the -- within XX:XX Okay. And How of little see sort terms at or in for mid-to-single about do guess US a becoming bit total off-price just I actually of the I the objectives. see also. do X-year then business you you mid-single-digit you talked shrinking and of US smaller mean that wholesale the growth. trending guys off-price you growing level do see XXXX a you you of see that

years. X the percentage next as So XX:XX over sales shrink of a

from like, it say be? to XX:XX X to to possible percentage going Is going to like quantify what it's that, is go it

would XX:XX of Yes, just I it's today, that that than years less will be X less from total say consolidated Jay, than it our X% sales now.

XX:XX Got it.

so Okay, much. super you Thank helpful.

XX:XX Your welcome, Jay.

additional turn XX:XX I'd closing back Mr. to And now Casey for or remarks. to the like conference any

We us get to Thank enjoyed updating today. in you thanks progress forward for April. our our to Goodbye. all very well look joining Okay, time to XX:XX much. again on

today's will participation. your that Ladies We gentlemen, you for and conclude thank XX:XX call.

great now may have a and day. You disconnect