Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Kendra, can you discuss the changes in inventory assortment as you modernize it and how you plan to avoid alienating core consumers? A: Kendra Krugman, Chief Creative and Growth Officer, explained that the changes are not dramatic in the baby and toddler segments, focusing on best categories and must-have products. The most opportunity lies in the kids segment, where a 20-point shift towards more style-forward categories is planned, which should help retain customers longer and compete more effectively.
Q: Richard, what was different about the pricing actions in the back half of the year that drove better unit volumes compared to the last two-plus years? A: Richard Westenberger, Interim CEO, noted that the market saw dramatic pricing actions from competitors, prompting Carter's to adjust prices on comparable items. The holiday season also contributed to improved consumer optimism, and effective promotional strategies around key events like Black Friday helped drive unit velocity.
Q: Can you elaborate on the challenges in retail and when comps might return to growth? A: Richard Westenberger highlighted that the main challenge is driving traffic to retail. While the in-store and online experiences are strong, the focus is on improving product offerings and marketing to attract consumers. The expectation is for comps to improve, potentially turning positive by the fourth quarter.
Q: What gives you confidence that pricing actions will stabilize in the back half of the year? A: Richard Westenberger stated that the assumption is based on current competitive pricing and the expectation that the market will stabilize after a challenging spring. Wholesale pricing is expected to be down modestly, with a focus on improving product make and service.
Q: Is there still an opportunity to add shelf space with your largest wholesale partners in 2025? A: Kendra Krugman confirmed that there is still opportunity, particularly in the toddler segment at Walmart and Target. The focus is on expanding both door count and categories, with exclusive brands driving growth in the wholesale segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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