Slide 1: Second Quarter / First Half 2026 Business Update
SECOND QUARTER / FIRST HALF 2026 BUSINESS UPDATE JULY 31, 2026
Slide 2: Second Quarter 2026 Results
SECOND QUARTER 2026 RESULTS GAAP BASIS in millions, except EPS % of % of Q2 2026 Net Sales Q2 2025 Net Sales Change Net sales $615 $585 5% Gross profit 413 67.0% 282 48.1% 46% Royalty income, net 3 0.5% 3 0.6% 3% SG&A 276 44.9% 281 48.0% (2%) Operating income 140 22.7% 4 0.7% n/m Interest expense 11
Slide 3: First Half 2026 Results
FIRST HALF 2026 RESULTS GAAP BASIS in millions, except EPS % of % of 1H 2026 Net Sales 1H 2025 Net Sales Change Net sales $1,297 $1,215 7% Gross profit 706 54.5% 573 47.1% 23% Royalty income, net 8 0.6% 9 0.7% (7%) SG&A 546 42.1% 551 45.4% (1%) Operating income 168 13.0% 30 2.5% n/m Interest expense
Slide 4: Non-GAAP Adjustments
NON-GAAP ADJUSTMENTS1 in millions, except EPS Second Quarter 2026 2025 Operating % Net Diluted Operating % Net Diluted Net Income Net Income Income Sales EPS Income Sales EPS As reported (GAAP) $140 22.7% $105 $2.87 $4 0.7% $0.4 $0.01 Tariff reimbursement (128) (100) (2.73) - - - Leadership transiti
Slide 5: Adjusted Second Quarter 2026 Results
ADJUSTED SECOND QUARTER 2026 RESULTS1 in millions, except EPS % of % of Q2 2026 Net Sales Q2 2025 Net Sales Change Net sales $615 $585 5% Gross profit 285 46.3% 282 48.1% 1% Royalty income, net 3 0.5% 3 0.6% 3% SG&A 270 43.9% 273 46.7% (1%) Operating income 18 2.9% 12 2.0% 54% Interest expense and o
Slide 6: Second Quarter 2026 Segment Results
SECOND QUARTER 2026 SEGMENT RESULTS in millions Net Sales Operating Income Operating Margin 2026 2025 $ Change 2026 2025 $ Change 2026 2025 U.S. Retail $305 $300 $5 $4 $4 - 1.4% 1.3% U.S. Wholesale 216 193 23 30 27 3 13.8% 14.0% International 95 93 2 5 4 2 5.7% 3.9% Total before 615 585 30 39 34 5 6
Slide 7: Second Quarter 2026 Performance – U.S. Retail
SECOND QUARTER 2026 PERFORMANCE – U.S. RETAIL 2026 vs. 2025 • Net sales +2% vs. LY − Units +LSD, AUR comparable − Marketing investments drove increased consumer engagement; strong improvement in eCommerce traffic − Continued progress in new consumer acquisition; strongest growth in GenZ cohort • Con
Slide 8: U.S. Retail - eCommerce Growth Drivers
U.S. RETAIL- eCOMMERCE GROWTH DRIVERS eCommerce revenue grew double-digits in H1 FY26 — Digital investments driving improved consumer experience Passwordless log in removes New “Wear It With” feature checkout friction delivers easy outfitting As of Q2, users can log in to carters.com Shoppers who en
Slide 9: Carter's Cup - Atlanta Personalization events
Carter’s Cup - Atlanta Personalization events 9
Slide 10: Second Quarter 2026 Segment Performance
SECOND QUARTER 2026 SEGMENT PERFORMANCE 2026 vs. 2025 U.S. WHOLESALE INTERNATIONAL • Net sales: +12% (units +LSD) • Net sales: +3% (units -LSD) Comparable in constant currency ― Exclusive Wholesale Brands growth ― Mexico total sales +22% ― Earlier than planned demand for Fall product ― Retail comp ~
Slide 11: Balance Sheet & Cash Flow
BALANCE SHEET & CASH FLOW in millions Balance Sheet (Q2 End) Cash Flow (First Half) 2026 2025 2026 2025 Operating cash flow $202 ($8) Cash $654 $338 Capital expenditures (13) (26) Accounts receivable, net 168 140 Free cash flow2 $189 ($35) Inventory, net 578 619 Accounts payable 324 306 Dividends $1
Slide 12: Adjusted First Half 2026 Results
ADJUSTED FIRST HALF 2026 RESULTS1 in millions, except EPS % of % of H1 2026 Net Sales H1 2025 Net Sales Change Net sales $1,297 $1,215 7% Gross profit 579 44.6% 573 47.1% 1% Royalty income, net 8 0.6% 9 0.7% (7%) SG&A 540 41.7% 534 44.0% 1% Operating income 47 3.6% 47 3.9% (1%) Interest expense and
Slide 13: First Half 2026 Segment Results
FIRST HALF 2026 SEGMENT RESULTS in millions Net Sales Operating Income Operating Margin 2026 2025 $ Change 2026 2025 $ Change 2026 2025 U.S. Retail $637 $594 $43 $13 $6 $7 2.1% 1.0% U.S. Wholesale 467 443 24 67 82 (16) 14.2% 18.6% International 193 178 15 10 3 6 5.0% 1.9% Total before 1,297 1,215 81
Slide 14: 2026 Outlook
2026 OUTLOOK 14
Slide 15: Fiscal Year 2026 Outlook
FISCAL YEAR 2026 OUTLOOK 52 WEEKS vs. 53 WEEKS 2025 NET SALES • Net sales: +2% to 3% growth (FY2025: $2.898 billion) U.S. Retail U.S. Wholesale International Low single-digit growth Low single-digit growth Mid single-digit growth Comp sales up mid-single-digits PROFITABILITY & CASH FLOW Adjusted1 Op
Slide 16: Third Quarter 2026 Outlook
THIRD QUARTER 2026 OUTLOOK NET SALES • Net sales: ~$750 million (Q3 2025: $758 million) U.S. Retail U.S. Wholesale International Low single-digit growth High single-digit decline Mid to high single-digit Comp sales up low-single-digits growth PROFITABILITY1 Adjusted Operating Income Adjusted Diluted
Slide 17: Thank You
THANK YOU 17
Slide 18: Supplemental Information
SUPPLEMENTAL INFORMATION 18
Slide 19: Reconciliation of Reported to Adjusted Earnings
RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS $ in millions, except EPS Cost of % of % of Income Goods Gross % of net Operating net Interest Tax Net Diluted Second Quarter Fiscal 2026 Sold Profit net sales SG&A sales Income sales Income Provision Income EPS As reported (GAAP) $202.9 $412.6 67.0% $
Slide 20: Reconciliation of Total Segment Operating Income to Consolidated Operating Income
RECONCILIATION OF TOTAL SEGMENT OPERATING INCOME TO CONSOLIDATED OPERATING INCOME $ in millions Fiscal Quarter Ended Two Fiscal Quarters Ended July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 % of % of % of % of net sales net sales net sales net sales Total segment operating income (a) $39.4 6.
Slide 21: Reconciliation of Net Income to Adjusted EBITDA
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA $ in millions Four Fiscal Fiscal Quarter Ended Two Fiscal Quarters Ended Quarters Ended July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 July 4, 2026 Net income $105.0 $0.4 $119.3 $16.0 $195.1 Interest expense 11.3 7.9 23.1 15.7 41.6 Interest inco
Slide 22: Second Quarter Reconciliation of Adjusted Net Income Allocable to Common Shareholders
SECOND QUARTER RECONCILIATION OF ADJUSTED NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS Fiscal Quarter Ended Weighted-average number of common and common equivalent shares outstanding: July 4, 2026 June 28, 2025 Basic number of common shares outstanding 35,591,295 35,409,988 Dilutive effect of equity
Slide 23: First Half Reconciliation of Adjusted Net Income Allocable to Common Shareholders
FIRST HALF RECONCILIATION OF ADJUSTED NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS Two Fiscal Quarters Ended Weighted-average number of common and common equivalent shares outstanding: July 4, 2026 June 28, 2025 Basic number of common shares outstanding 35,542,362 35,361,039 Dilutive effect of equity
Slide 24: Net Sales Constant Currency Reconciliation
NET SALES CONSTANT CURRENCY RECONCILIATION $ in millions Fiscal Quarter Ended Impact of Constant- Constant- Reported Net Foreign Currency Net Reported Net Reported Currency Sales Currency Sales Sales Net Sales Net Sales % July 4, 2026 Translation July 4, 2026 June 28, 2025 % Change Change Consolidat
Slide 25: Store Count Reconciliation
STORE COUNT RECONCILIATION U.S Canada Mexico Total Store count at January 3, 2026 804 192 72 1,068 Openings 3 0 1 4 Closings (9) (1) 0 (10) Store count at April 4, 2026 798 191 73 1,062 Openings 1 0 1 2 Closings (20) (1) (1) (22) Store count at July 4, 2026 779 190 73 1,042 25
Slide 26: Forward Looking Statements & Other Information
FORWARD LOOKING STATEMENTS & OTHER INFORMATION Statements in this press release that are not historical fact and use predictive words such as “estimates”, “outlook”, “guidance”, “expect”, “believe”, “intend”, “designed”, “target”, “plans”, “may”, “will”, “opportunities”, “are confident” and similar