Carter's, Inc. (NYSE:CRI) shares tumbled 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 children's apparel retailer is facing significant pressure as analysts predict a substantial decline in profitability.

According to analyst estimates, Carter's is expected to report quarterly earnings of 74 cents per share, marking a sharp decrease from $1.64 per share in the same period last year. This projected 54.9% drop in earnings per share has likely sparked concerns among investors, leading to the pre-market sell-off. Revenue, however, is anticipated to show a modest increase to $773.09 million, up from $758.46 million in the previous year.

The market's reaction also comes in the context of recent analyst actions. UBS maintained a Neutral rating but cut its price target from $32 to $26 in July, while Wells Fargo, despite maintaining an Underweight rating, slightly increased its target from $25 to $28 in May. These mixed signals from analysts, combined with the looming earnings report, have created a volatile environment for Carter's stock. Investors will be closely watching the earnings release for any signs of improvement or further deterioration in the company's financial performance.