Slide 1: Third Quarter 2025 Business Update
THIRD QUARTER 2025 BUSINESS UPDATE OCTOBER 27, 2025
Slide 2: Third Quarter 2025 Results
THIRD QUARTER 2025 RESULTS GAAP BASIS $ in millions, except EPS Third Third Quarter % of Quarter % of 2025 Net Sales 2024 Net Sales Change Net sales $758 $758 0% Gross profit 342 45.1% 356 46.9% (4%) Royalty income, net 5 0.7% 6 0.8% (5%) SG&A 318 42.0% 285 37.5% 12% Operating income 29 3.8% 77 10.2
Slide 3: Third Quarter YTD 2025 Results
THIRD QUARTER YTD 2025 RESULTS GAAP BASIS $ in millions, except EPS Third Third Quarter % of Quarter % of YTD 2025 Net Sales YTD 2024 Net Sales Change Net sales $1,973 $1,984 (1%) Gross profit 914 46.4% 954 48.1% (4%) Royalty income, net 14 0.7% 15 0.8% (6%) SG&A 869 44.1% 798 40.2% 9% Operating inc
Slide 4: Non-GAAP Adjustments
NON-GAAP ADJUSTMENTS1 $ in millions, except EPS Third Quarter 2025 2024 Operating % Net Diluted Operating % Net Diluted Net Income Net Income Income Sales EPS Income Sales EPS As reported (GAAP) $29.1 3.8% $11.6 $0.32 $77.0 10.2% $58.3 $1.62 Organizational restructuring 6.1 4.6 0.13 - - - Operating
Slide 5: Adjusted Third Quarter 2025 Results
ADJUSTED THIRD QUARTER 2025 RESULTS 1 $ in millions, except EPS Third Third Quarter % of Quarter % of 2025 Net Sales 2024 Net Sales Change Net sales $758 $758 0% Gross profit 342 45.1% 356 46.9% (4%) Royalty income, net 5 0.7% 6 0.8% (5%) Adjusted SG&A 308 40.6% 285 37.5% 8% Adjusted operating incom
Slide 6: Third Quarter 2025 Segment Results
THIRD QUARTER 2025 SEGMENT RESULTS $ in millions Net Sales Operating Income Operating Margin 2025 2024 $ Change 2025 2024 $ Change 2025 2024 U.S. Retail $362 $353 $9 $10 $27 ($17) 2.8% 7.7% U.S. Wholesale 284 299 (15) 44 63 (19) 15.5% 21.1% International 112 106 5 9 10 (1) 8.2% 9.6% Total before Cor
Slide 7: Third Quarter 2025 Performance – U.S. Retail
THIRD QUARTER 2025 PERFORMANCE – U.S. RETAIL 2025 vs. 2024 • Net sales +3% vs. LY − Favorable consumer acceptance of price increases: AUR +MSD, ATV +MSD (units down LSD) • Comparable sales +2% Sales − Second consecutive quarter of comparable sales growth − Growth driven by strong Labor Day sales per
Slide 8: Third Quarter Segment Performance
THIRD QUARTER SEGMENT PERFORMANCE 2025 vs. 2024 U.S. WHOLESALE INTERNATIONAL • Net sales: -5% (units down MSD) • Net sales: +5% (units comparable) ― Lower Simple Joys sales ― Strong growth in Mexico ― Growth with the rest of Exclusive ― Total sales +31% Brands book of business ― Retail comp +16% ― L
Slide 9: Balance Sheet & Cash Flow
BALANCE SHEET & CASH FLOW $ in millions Balance Sheet (Q3 End) Cash Flow (Q3 YTD) 2025 2024 2025 2024 Cash $184 $176 Operating cash flow $(136) $11 Accounts receivable, net 238 247 Capital expenditures (43) (40) Inventory, net 656 607 Free cash flow2 $(179) $(28) Accounts payable 240 274 Dividends $
Slide 10: Adjusted Third Quarter YTD 2025 Results
ADJUSTED THIRD QUARTER YTD 2025 RESULTS 1 $ in millions, except EPS Third Third Quarter % of Quarter % of YTD 2025 Net Sales YTD 2025 Net Sales Change Net sales $1,973 $1,984 (1%) Gross profit 915 46.4% 954 48.1% (4%) Royalty income, net 14 0.7% 15 0.8% (6%) Adjusted SG&A 842 42.7% 798 40.2% 6% Adju
Slide 11: Third Quarter YTD 2025 Segment Results
THIRD QUARTER YTD 2025 SEGMENT RESULTS $ in millions Net Sales Operating Income Operating Margin 2025 2024 $ Change 2025 2024 $ Change 2025 2024 U.S. Retail $956 $951 $5 $16 $60 ($44) 1.7% 6.3% U.S. Wholesale 727 756 (29) 126 163 (36) 17.4% 21.5% International 290 277 12 13 18 (5) 4.3% 6.5% Total be
Slide 12: Chief Executive Officer Update
CHIEF EXECUTIVE OFFICER UPDATE 12
Slide 13: Our Priorities
OUR PRIORITIES • Stabilize business performance • Implement comprehensive productivity agenda • Invest to enable long-term growth 13
Slide 14: Business Stabilization
BUSINESS STABILIZATION • Q3 second straight quarter of positive comp growth in U.S. Retail (+2%); product relevancy increasing • Improvement in realized prices due to moderated promotions ‒ Consumers spending more on our ‘best’ products and brands ‒ Average transaction value +LSD in Q3 • Strength in
Slide 15: Implementing Comprehensive Productivity Agenda
IMPLEMENTING COMPREHENSIVE PRODUCTIVITY AGENDA • Planning meaningful reduction-in-force of offices-based roles (-15%) ‒ Expected to save ~$35M annually Right Size Organization ‒ Brings structure more in line with current size of business ‒ Supports greater ownership and accountability • Targeting $1
Slide 16: Implementing Comprehensive Productivity Agenda
IMPLEMENTING COMPREHENSIVE PRODUCTIVITY AGENDA • Close 150 low-margin stores ‒ Profit accretive given sales transfer (to stores and eCommerce) • Suspend new U.S. openings of current store model Improve Store Portfolio • Improve productivity of existing store portfolio ‒ Drive increased traffic ‒ Seg
Slide 17: Making Foundational Investments to Drive Long-Term Growth
MAKING FOUNDATIONAL INVESTMENTS TO DRIVE LONG-TERM GROWTH • Carter’s under-indexes peers on marketing spend • Opportunity to drive traffic and consumer loyalty beyond Increase Spend on promotion and prices Demand Creation • Seeing good proof points in current spending ‒ Demand creation investment su
Slide 18: Perspective on Q4 FY2025 & FY2026
PERSPECTIVE ON Q4 FY2025 & FY2026 18
Slide 19: Responding to Significantly Higher Tariffs
RESPONDING TO SIGNIFICANTLY HIGHER TARIFFS 2025E Finished Goods Sourcing Mix China <3% Top 4 Countries of Origin Rest of World • Vietnam Well Diversified 25% Top 4 • Cambodia Sourcing Footprint 75% • Bangladesh • India • U.S. import duties paid in 2024: ~$110 million (~13% effective duty rate) Estim
Slide 20: Perspective on Q4 2025 & Fiscal Year 2026
PERSPECTIVE ON Q4 2025 & FISCAL YEAR 2026 • Net sales ‒ U.S. Retail: low single-digit comp ‒ U.S. Wholesale: down low single digits Q4 2025 ‒ International: growth driven by Canada and Mexico Expectations • Gross margin rate: ~43% • SG&A: up mid-single-digits • Higher net interest expense & higher t
Slide 21: Thank You
THANK YOU 21
Slide 22: Supplemental Information
SUPPLEMENTAL INFORMATION 22
Slide 23: Reconciliation of Reported to Adjusted Earnings
RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS $ in millions, except EPS % of Operating % of Income Net Diluted Third Quarter of Fiscal 2025 SG&A net sales Income net sales Tax Provision Income EPS As reported (GAAP) $318.0 42.0% $29.1 3.8% $3.2 $11.6 $0.32 Operating model improvement costs (b) (3.
Slide 24: Reconciliation of Reported to Adjusted Earnings
RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS $ in millions, except EPS Income % of Operating % of Tax Net Diluted Third Quarter of Fiscal 2024 SG&A net sales Income net sales Provision Income EPS As reported (GAAP) $284.7 37.5% $77.0 10.2% $12.4 $58.3 $1.62 Pension plan settlement (b) - - 0.2 0.7
Slide 25: 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 Three Fiscal Quarters Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 % of % of % of % of net sales net sales net sales net sales Total segment opera
Slide 26: Reconciliation of Net Income to Adjusted EBITDA
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA $ in millions Four Fiscal Fiscal Quarter Ended Three Fiscal Quarters Ended Quarters Ended September September 28, September 27, September 28, September 27, 27, 2025 2024 2025 2024 2025 Net income $11.6 $58.3 $27.6 $124.0 $89.1 Interest expense 7.2 7.4
Slide 27: Third Quarter Reconciliation of Adjusted Net Income Allocable to Common Shareholders
THIRD QUARTER RECONCILIATION OF ADJUSTED NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS Fiscal Quarter Ended Weighted-average number of common and common equivalent shares outstanding: September 27, 2025 September 28, 2024 Basic number of common shares outstanding 35,443,712 35,301,131 Dilutive effect
Slide 28: Third Quarter YTD Reconciliation of Adjusted Net Income Allocable to Common Shareholders
THIRD QUARTER YTD RECONCILIATION OF ADJUSTED NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS Three Fiscal Quarters Ended Weighted-average number of common and common equivalent shares outstanding: September 27, 2025 September 28, 2024 Basic number of common shares outstanding 35,388,596 35,616,875 Dilut
Slide 29: Net Sales Constant Currency Reconciliation
NET SALES CONSTANT CURRENCY RECONCILIATION $ in millions Fiscal Quarter Ended Constant- Reported Net Impact of Currency Net Reported Net Constant- Sales Foreign Sales Sales Reported Currency September 27, Currency September 27, September 28, Net Sales Net Sales % 2025 Translation 2025 2024 % Change
Slide 30: Store Count Reconciliation
STORE COUNT RECONCILIATION U.S Canada Mexico Total Store count at September 28, 2024 795 188 56 1,039 Openings 15 4 7 26 Closings (6) (1) (1) (8) Store count at December 28, 2024 804 191 62 1,057 Openings 19 4 6 29 Closings (15) (3) (3) (21) Store count at September 27, 2025 808 192 65 1,065 30
Slide 31: Forward Looking Statements
FORWARD LOOKING STATEMENTS Statements in this presentation that are not historical fact and use predictive words such as “estimates”, “outlook”, “guidance”, “expect”, “believe”, “intend”, “designed”, “target”, “plans”, “may”, “will”, “are confident” and similar words are forward-looking statements (