Key takeout
- Carter’s stock recently hit its lowest level since 2011, shortly after the company announced a nearly 70% cut to its quarterly dividend.
- Children’s clothing retailers are facing challenges with current profitability, especially with upcoming costs related to customs duties.
- Last month, Carter removed its full-year outlook, attributing this to tariffs and recent changes in leadership.
Carter’s (CRI) stock has reached its lowest value since 2011, just a day following a significant dividend reduction for children’s clothing retailers.
Doug Paradini, who became the new CEO last month, mentioned on Wednesday that he plans to unveil a new strategic plan aimed at regaining profitable growth during the second-quarter revenue calls later this summer. He offered some preliminary ideas to the board regarding the company’s direction.
“Our cash and liquidity situation is solid and is expected to remain so,” Paradini stated. “However, considering we plan to make strategic investments in the coming years, the current dividends don’t align with our level of profitability.”
Carter’s slashes dividend nearly 70%
Due to these concerns, Carter has reduced its quarterly dividend to $0.25 per share, which is a significant drop from the $0.80 per share dividend paid in March. The company didn’t declare a dividend when it reported the first-quarter results last month. The board will reassess future payments based on various “business terms” and other factors.
In its first-quarter report, Carter decided to suspend its full-year outlook, citing the transition to a new CEO and the “significant uncertainty” regarding the new tariffs and their potential effects on the business.
Recently, Carter’s stock fell 12%, trading at $32.38. Earlier in the session, shares dipped to $31.50, marking the first time since early October 2011 that it dropped below $32.
