Carter’s, Inc. (NYSE:CRI) Q4 2023 Results Conference Call February 27, 2024 8:30 AM ET

Company Participants

Michael Casey - Chairman & CEO

Richard Westenberger - Executive VP & CFO

Kendra Krugman - Executive VP of Retail & Chief Merchandising Officer

Conference Call Participants

Warren Cheng - Evercore ISI

Tom Nikic - Wedbush

Jay Sole - UBS

Ike Boruchow - Wells Fargo

James Andrew - Chartier Monness, Crespi, Hardt & Co.

Kelly Crago - Citigroup Inc.

Operator

Welcome to Carter's Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. On the call today are Michael Casey, Chairman and Chief Executive Officer; Richard Westenberger, Senior Executive Vice President, Chief Financial Officer and Chief Operating Officer; Kendra Krugman, Senior Executive Vice President, Chief Creative and Growth Officer; and Sean McHugh, Vice President and Treasurer.

After today's prepared remarks, we will take questions as time allows. Carter's issued its fourth quarter and fiscal year 2023 earnings press release earlier this morning. A copy of the release and presentation materials for today's call have been posted on the Investor Relations section of the company's website at ir.carters.com.

Before we begin, let me remind you that statements made on this conference call and in the company's presentation materials about the company's outlook, plans and future performance are forward-looking statements. Actual results may differ materially from those projected, and the company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For a discussion of the factors that could cause actual results to vary from those contained in the forward-looking statements, please refer to the company's most recent annual and quarterly reports filed with the Securities and Exchange Commission and the presentation materials and releasing -- earnings release posted on the company's website. On this call, the company will reference various non-GAAP financial measurements. A reconciliation of non-GAAP financial measurements to GAAP financial measurements is provided in the company's earnings release and presentation materials. Also, the call is being recorded.

I would now like to turn the call over to Mr. Casey. Mr. Casey, you may begin.

Michael Casey

Thanks very much. Good morning, everyone. Thank you for joining us on the call. Before we walk you through the presentation on our website, I'd like to share some thoughts on our business with you.

We had a strong finish to the year. In the fourth quarter, we saw a sequential improvement each month in our comparable U.S. retail sales and earlier than planned demand for our new spring product offerings. Earnings and cash flow in the quarter were better than planned. Our earnings per share in the fourth quarter were up over 20% with margin expansion in each of our three business segments. It was our strongest growth in quarterly profitability in over two years. Our fourth quarter profitability was driven by the strength of our product offerings, on-time deliveries from Asia, better price realization, lower product costs and good control over discretionary spending. We made good progress in the fourth quarter, working down inventories that backed up in 2022 when inflation surged to historic levels and consumer demand slowed.