Sales of Child of Mine brand up at Carter's
Carter's Inc, the largest branded marketer in the United States of apparel exclusively for babies and young children, today reported its fourth quarter and fiscal 2008 results.
"We are very encouraged by our fourth quarter performance, particularly given the significant slowdown in consumer spending and the negative macro-economic environment. It is clear that the Carter's and OshKosh brands continue to resonate with consumers," said Michael D. Casey, Chief Executive Officer. "While we are cautious in our outlook, we believe the investments we've made in product benefits, brand presentation, and our retail store operations will strengthen our overall market position and profitability."
Fourth Quarter Highlights:
Consolidated net sales increased 7.3% to $422.0 million. Net sales of the Company's Carter's brands increased 9.0% to $320.4 million. Net sales of the Company's OshKosh brand increased 2.2% to $101.6 million.
Consolidated retail store sales increased 12.8% to $213.2 million. Carter's retail store sales increased 16.1% to $130.9 million. Comparable store sales in Carter's stores increased 4.1%. OshKosh retail store sales increased 8.0% to $82.3 million with comparable store sales increasing 3.6%.
In the fourth quarter of fiscal 2008, the Company opened 19 Carter's and three OshKosh retail stores and closed one OshKosh retail store. As of January 3, 2009, the Company operated 253 Carter's and 165 OshKosh retail stores.
The Company's mass channel sales, which are comprised of sales of its Child of Mine brand to Wal-Mart and Just One Year brand to Target, increased 16.4% to $63.8 million. Sales of the Just One Year brand increased 29.3% to $35.7 million driven primarily by timing of product launches. Sales of the Child of Mine brand increased 3.3% to $28.0 million.
Carter's wholesale sales decreased 0.6% to $125.7 million due primarily to the impact of customer bankruptcies. OshKosh wholesale sales decreased 16.8% to $19.3 million due to lower demand, which we attribute to poor over-the-counter selling in fiscal 2007.
Reported consolidated operating income in the fourth quarter of fiscal 2008 was $48.6 million, a decrease of 4.1% from $50.7 million in the fourth quarter of fiscal 2007. Excluding the item in the previous year, which is detailed on page 11, adjusted operating income increased 1.2% to $48.6 million, driven by improvements in earnings from the Carter's and OshKosh retail segments and growth in earnings in the mass channel and OshKosh wholesale segments. The benefit of these improvements was partially offset by a decrease in earnings in the Carter's wholesale segment due to lower margins on off-price sales and product mix.
Reported net income decreased 4.4% to $27.3 million, or $0.47 per diluted share, compared to $28.6 million, or $0.48 per diluted share, in the fourth quarter of fiscal 2007. Excluding the item in the previous year, which is detailed on page 11, adjusted net income for the fourth quarter of fiscal 2008 increased 1.6%. Adjusted diluted earnings per share increased $0.02 per diluted share, or 4.4%.