Slide 1: First Quarter Fiscal 2022 Results & Business Outlook
First Quarter Fiscal 2022 Results & Business Outlook April 29, 2022
Slide 2: First Quarter 2022 Results (GAAP Basis)
First Quarter 2022 Results (GAAP Basis) $ in millions, except EPS Q1 % of Q1 % of Increase / 2022 Sales 2021 Sales (Decrease) Net sales $781 $787 (1%) Gross profit 355 45.4% 392 49.8% (9%) Royalty income 7 1.0% 7 0.9% - SG&A 260 33.3% 272 34.5% (4%) Operating income 103 13.1% 127 16.2% (20%) Interes
Slide 3: Non-GAAP Adjustments
Non-GAAP Adjustments1 $ in millions, except EPS First Quarter 2022 2021 Operating % Net Diluted Operating % Net Diluted Income Sales EPS Income Sales EPS As reported (GAAP) $102.6 13.1% $1.66 $127.5 16.2% $1.96 COVID-19 expenses - - 2.1 0.04 Restructuring costs - - 0.5 0.01 Store lease impairment be
Slide 4: Q1 2022 Sales & Earnings Exceeded Our Expectations; Profitability Meaningfully Better vs. 2019
Q1 2022 Sales & Earnings Exceeded Our Expectations; Profitability Meaningfully Better vs. 2019 $ in millions, except EPS Adjusted Operating Income1 Net Sales (Adjusted Operating Margin) Adjusted Diluted EPS1 Guidance: -1% vs. Guidance: -20% vs. Guidance: -16% vs. ~$740 - $750 2021 ~$85 - $90 2021 ~$
Slide 5: First Quarter 2022 Adjusted Results
First Quarter 2022 Adjusted Results1 $ in millions, except EPS Q1 % of Q1 % of Increase / 2022 Sales 2021 Sales (Decrease) Net sales $781 $787 (1%) Gross profit 355 45.4% 392 49.8% (9%) Royalty income 7 1.0% 7 0.9% - Adjusted SG&A 260 33.3% 271 34.4% (4%) Adjusted operating income 103 13.1% 129 16.3
Slide 6: First Quarter 2022 Results – Balance Sheet / Cash Flow
First Quarter 2022 Results – Balance Sheet / Cash Flow $ in millions Balance Sheet Cash Flow (Q1 End) (Q1) 2022 2021 2022 2021 Cash $702 $1,054 Operating cash flow ($164) ($40) Accounts receivable 266 240 Capital expenditures (8) (12) 1 Inventory 680 561 Free cash flow ($171) ($51) Accounts payable
Slide 7: Business Segment Performance
Business Segment Performance
Slide 8: First Quarter Segment Performance
First Quarter Segment Performance (2022 vs. 2021) $ in millions Decrease in profitability largely driven by higher transportation costs Adjusted Operating Adjusted Operating 1 1 Net Sales Income Margin 2022 2021 $ Change 2022 2021 $ Change 2022 2021 U.S. Retail $366 $407 ($41) $50 $76 ($26) 13.6% 18
Slide 9: First Quarter 2022 Segment Performance
First Quarter 2022 Segment Performance (vs. 2021) U.S. Retail U.S. Wholesale International • Net sales -10%; meaningful • Net sales +8% • Net sales +11%, driven by: prior-year non-comp items: ― Strong growth in ― Canada +18% ― Government stimulus Exclusive Brands ― Mexico +5% ― Permanent store closu
Slide 10: Meaningful Improvement in Q1 Profitability Relative to Pre-Pandemic Period (2022 vs. 2019)
Meaningful Improvement in Q1 Profitability Relative to Pre-Pandemic Period (2022 vs. 2019) $ in millions Adjusted Operating Income1 (Adjusted Operating Margin) U.S. Retail U.S. Wholesale International Total2 $50 $61 $10 $103 $55 $60 9.7% 13.6% 13.1% $24 19.7% Segment Segment 20.1% Margin of Net Segm
Slide 11: Carter's is a Market Leader in Holiday Product Offerings, Driving Brand Loyalty and Traffic
Carter’s is a Market Leader in Holiday Product Offerings, Driving Brand Loyalty and Traffic Valentine’s St. Patrick’s Easter Mother’s Day 4th of July Halloween 11
Slide 12: Successful Marketing Collaboration With Dunkin'
Successful Marketing Collaboration With Dunkin' 12
Slide 13: Carter's Continues to Lead Market in Social Media
Carter’s Continues to Lead Market in Social Media Our Brands have a strong consumer following on Leading among competitive set Instagram and Facebook1 in TikTok growth and engagement2; In millions over 2M views in Q11 Instagram Followers Carter's 2.2 Gap Kids 1.3 Disney Baby 1.0 Children's Place 0.8
Slide 14: Engaging Consumers Digitally
Engaging Consumers Digitally • Mobile App • >20% of U.S. Retail eCommerce sales now taking place in app • App users doubled vs. LY • >2.6 million downloads since launch of new app in October 2020 • 4.8/5 stars on over 48K reviews • Loyalty & Carter’s Credit Card Programs • 90% of active customers en
Slide 15: Expanding Little Planet Product Offering
Expanding Little Planet Product Offering 15
Slide 16: Raising Consumer Visibility to Our ESG Initiatives
Raising Consumer Visibility to Our ESG Initiatives In-Store Earth Day Marketing Messaging 16
Slide 17: Powerful Brand Presence at Target
Powerful Brand Presence at Target Coming Fall 2022 17
Slide 18: Expanding Brand Presence at Walmart
Expanding Brand Presence at Walmart Coming Fall 2022 18
Slide 19: Expanding Toddler Offering on Amazon
Expanding Toddler Offering on Amazon New Baby Toys 19
Slide 20: Strong Baby Apparel Presence at Kohl's
Strong Baby Apparel Presence at Kohl’s 20
Slide 21: Growing Carter's with Riachuelo in Brazil
Growing Carter’s with Riachuelo in Brazil • Large and attractive market ― $3 billion (ages 0 – 10) ― 2.7 million annual births • Riachuelo multi-channel operations ― 28 Carter’s stores ― ~260 Riachuelo stores ― eCommerce 21
Slide 22: South America Expansion – Uruguay
South America Expansion – Uruguay 22
Slide 23: 2022 Outlook
2022 Outlook
Slide 24: Q2 2022 Outlook
Q2 2022 Outlook1 • Net sales: $750 – $775 million • Adjusted operating income: $95 – $105 million - vs. $110 million Q2 2021 • Adjusted diluted EPS: $1.60 – $1.80 - vs. $1.67 Q2 2021 • Outlook reflects: - Continued improvement in supply chain performance - Less challenging comparisons to 2021 stimul
Slide 25: Fiscal Year 2022 Outlook
Fiscal Year 2022 Outlook1 • Projecting good growth in sales and profitability • Net sales growth of 2% – 3% - Growth in all segments • Adjusted operating income growth of 4% – 6% - vs. $501 million in fiscal 2021 • Adjusted diluted EPS growth of 12% – 14% - vs. $7.87 in fiscal 2021 • Outlook reflect
Slide 26: Thank you!
Thank you!
Slide 27: Appendix
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Slide 28: Q1 Reconciliation of Adjusted Net Income Allocable to Common Shareholders
Q1 Reconciliation of Adjusted Net Income Allocable to Common Shareholders Fiscal Quarter Ended April 2, 2022 April 3, 2021 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 40,270,895 43,370,744 Dilutive effect of equity awards 77,4
Slide 29: Reconciliation of Adjusted to Reported Earnings
Reconciliation of Adjusted to Reported Earnings1 $ in millions, except EPS Segment Reporting U.S. Retail % of U.S. Wholesale % of International % of Corporate % of Gross % of % of Operating % of Income Net Diluted Operating segment Operating segment Operating segment Operating total First Quarter of
Slide 30: Reconciliation of Adjusted to Reported Earnings (Continued)
Reconciliation of Adjusted to Reported Earnings (Continued) (a) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present gross profit, SG&A, operating income, income taxes, net income, and ne
Slide 31: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA to Net Income $ in millions Four Fiscal Fiscal Quarter Ended Quarters Ended April 2, 2022 April 3, 2021 April 2, 2022 Net income $67.9 $86.2 $321.5 Interest expense 15.1 15.3 60.1 Interest income (0.3) (0.2) (1.2) Tax expense 20.4 27.1 91.9 Depreciation and amortiza
Slide 32: Constant Currency Reconciliation
Constant Currency Reconciliation $ in millions Fiscal Quarter Ended Constant- Reported Impact of Currency Reported Constant- Net Sales Foreign Net Sales Net Sales Reported Currency April 2, Currency April 2, April 3, Net Sales Net Sales 2022 Translation 2022 2021 % Change % Change Consolidated net s
Slide 33: Company-Operated Store Count
Company-Operated Store Count U.S. Canada Mexico Total Store count at April 3, 2021 804 189 43 1,036 Openings - - 5 5 Closings (64) (4) (4) (72) Store count at April 2, 2022 740 185 44 969 Store count at January 1, 2022 751 186 43 980 Openings - - 1 1 Closings (11) (1) - (12) Store count at April 2,
Slide 34: Forward-looking Statements and Other Information
Forward-looking Statements and Other Information This presentation contains forward-looking statements within the meaning of the federal securities laws relating to our future performance, including statements with respect to the potential effects of the COVID-19 pandemic, supply chain challenges, a