Carter's, Inc. (NYSE:CRI) saw its stock plummet 5.38% in pre-market trading on Monday, as investors brace for the company's third-quarter earnings report set to be released before the opening bell. The significant drop reflects growing concerns about the company's financial performance and recent strategic moves.

Analysts are projecting a notable decline in Carter's quarterly earnings, with expectations of 74 cents per share, down substantially from $1.64 per share in the same period last year. This pessimistic outlook appears to be driving the pre-market sell-off. On a more positive note, revenue is anticipated to show a slight increase, with estimates at $773.09 million compared to $758.46 million in the previous year.

Adding to investor uncertainty is Carter's recent adoption of a limited duration stockholder rights plan on September 24. This move came in response to RWWM's rapid accumulation of a 16.86% stake in the company without advance notice, potentially signaling concerns about corporate control. Furthermore, recent analyst actions have been mixed, with UBS maintaining a Neutral rating but cutting its price target, while Wells Fargo, despite an Underweight rating, slightly increased its target. These conflicting signals may be contributing to the market's apprehension ahead of the earnings release, resulting in the sharp pre-market decline.