UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~April 274, ~~2025~~2026

ORor

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~__________to __________~~ to

Commission ~~file~~File ~~number~~Number: 001-31829

CARTER’S, INC.

(Exact name of registrant as specified in its charter)


Delaware						13-3912933
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)

Phipps Tower,

3438 Peachtree Road NE, Suite 1800

Atlanta, Georgia 30326

(Address of principal executive offices, including zip code)

(678) 791-1000

(Registrant'’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	CRI	New York Stock Exchange
Series A Preferred Stock Purchase Rights	-	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x☒

As of ~~October~~April 2227, ~~2025~~2026, there were 36,~~447~~850,~~868~~117 shares of the registrant’s common stock outstanding.

CARTER’S, INC.

INDEX

Part I. Financial Information			Page
			Page
	Item 1	Financial Statements
Part I. Financial Information
		Unaudited Condensed Consolidated Balance Sheets as of September 27, 2025, December 28, 2024, and September 28, 2024	1
	Item 1.	Financial Statements
		Unaudited Condensed Consolidated Statements of Operations for the fiscal quarter and three fiscal quarters ended September 27, 2025 and September 28, 2024	2
		Unaudited Condensed Consolidated Balance Sheets as of April 4, 2026, January 3, 2026, and March 29, 2025	1
		Unaudited Condensed Consolidated Statements of Comprehensive Income for the fiscal quarter and three fiscal quarters ended September 27, 2025 and September 28, 2024	3
		Unaudited Condensed Consolidated Statements of Operations for the fiscal quarter ended April 4, 2026 and March 29, 2025	2
		Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the fiscal quarters ended September 27, 2025, June 28, 2025, March 29, 2025, September 28, 2024, June 29, 2024, and March 30, 2024	4
		Unaudited Condensed Consolidated Statements of Comprehensive Income for the fiscal quarter ended April 4, 2026 and March 29, 2025	3
		Unaudited Condensed Consolidated Statements of Cash Flows for the three fiscal quarters ended September 27, 2025 and September 28, 2024	6
		Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the fiscal quarter ended April 4, 2026 and March 29, 2025	4
		Notes to the Unaudited Condensed Consolidated Financial Statements	7
		Unaudited Condensed Consolidated Statements of Cash Flows for the fiscal quarter ended April 4, 2026 and March 29, 2025	5
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
		Notes to the Unaudited Condensed Consolidated Financial Statements	6
	Item 3	Quantitative and Qualitative Disclosures about Market Risk	39
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 4	Controls and Procedures	40
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
	Item 4.	Controls and Procedures	28
Part II. Other Information
	Item 1	Legal Proceedings	41
	Item 1.	Legal Proceedings	29
	Item 1A	Risk Factors	41
	Item 1A.	Risk Factors	29
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	42
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
	Item 3	Defaults upon Senior Securities	42
	Item 3.	Defaults upon Senior Securities	30
	Item 4	Mine Safety Disclosures	42
	Item 4.	Mine Safety Disclosures	30
	Item 5	Other Information	42
	Item 5.	Other Information	30
	Item 6	Exhibits	43
	Item 6.	Exhibits	31
Signatures			4432

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARTER’S, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(unaudited)

September 27, 2025

December 28, 2024

September 28, 2024

April 4, 2026

January 3, 2026

March 29, 2025

ASSETS

Current assets:

Cash and cash equivalents

~~184~~473,~~190~~435

~~412~~487,~~926~~075

~~175~~320,~~536~~794

Accounts receivable, net of allowance for credit losses of $12,026, $5,663, and $8,303, respectively

237,866

194,834

247,013

Accounts receivable, net of allowance for credit losses of $6,018, $7,587, and $5,213, respectively

196,596

178,566

203,873

Finished goods inventories, net of inventory reserves of $12,347, $8,257, and $17,135, respectively

656,149

502,332

607,384

Finished goods inventories, net of inventory reserves of $12,027, $8,897, and $9,641, respectively

465,876

544,624

474,124

Prepaid expenses and other current assets

5575,~~576~~720

3260,~~580~~508

4150,~~577~~216

Total current assets

1,~~133~~211,~~781~~627

1,~~142~~270,~~672~~773

1,~~071~~049,~~510~~007

Property, plant, and equipment, net of accumulated depreciation of $599,467, $602,670, and $642,420, respectively

189,012

180,956

182,292

Property, plant, and equipment, net of accumulated depreciation of $617,458, $609,059, and $612,079, respectively

179,038

186,307

179,247

Operating lease assets

~~611~~578,~~569~~585

~~577~~591,~~133~~806

~~560~~568,~~246~~856

Tradenames, net

268,~~718~~600

268,~~008~~659

~~298~~268,~~053~~836

Goodwill

208,~~351~~413

~~206~~208,~~875~~994

~~209~~207,~~384~~125

Customer relationships, net

2019,~~993~~249

2320,~~543~~128

2422,~~440~~672

Other assets

3718,~~015~~643

3318,~~980~~803

3236,~~460~~057

Total assets

2,~~469~~484,~~439~~155

2,~~433~~565,~~167~~470

2,~~378~~331,~~385~~800

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

~~240~~188,~~235~~692

~~248~~235,~~200~~700

~~273~~199,~~909~~056

Current operating lease liabilities

~~150~~133,~~548~~384

~~130~~136,~~564~~488

~~130~~125,~~140~~556

Other current liabilities

~~110~~111,~~907~~349

~~130~~133,~~052~~809

8084,~~059~~734

Total current liabilities

~~501~~433,~~690~~425

~~508~~505,~~816~~997

~~484~~409,~~108~~346

Long-term debt, net

~~498~~567,~~738~~487

~~498~~567,~~127~~173

~~497~~498,~~930~~328

Deferred income taxes

4142,~~200~~910

3839,~~210~~380

4845,~~890~~300

Long-term operating lease liabilities

~~529~~495,~~139~~442

~~501~~508,~~503~~461

~~485~~498,~~613~~628

Other long-term liabilities

3416,~~030~~434

3119,~~949~~411

32,~~504~~953

Total liabilities

1,~~604~~555,~~797~~698

1,~~578~~640,~~605~~422

1,~~549~~484,~~045~~555

Commitments and contingencies - Note 16

Commitments and contingencies - Note 15

Shareholders’ equity:

Preferred stock; par value $0.01 per share; 100,000 shares authorized; none issued or outstanding

—

Common stock, voting; par value $0.01 per share; 150,000,000 shares authorized; 36,518,637, 36,041,995, and 36,038,814 shares issued and outstanding, respectively

365

360

Common stock, voting; par value $0.01 per share; 150,000,000 shares authorized; 36,850,117, 36,425,877, and 36,237,114 shares issued and outstanding, respectively

369

364

362

Additional paid-in capital

1820,~~029~~251

319,~~856~~584

—9,385

Accumulated other comprehensive loss

(2826,~~107~~740)

(4324,~~678~~361)

(3243,~~361~~066)

Retained earnings

~~874~~934,~~355~~577

~~894~~929,~~024~~461

~~861~~880,~~341~~564

Total shareholders’ equity

~~864~~928,~~642~~457

~~854~~925,~~562~~048

~~829~~847,~~340~~245

Total liabilities and shareholders’ equity

2,~~469~~484,~~439~~155

2,~~433~~565,~~167~~470

2,~~378~~331,~~385~~800

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

(unaudited)

	Fiscal quarter ended				~~Three fiscal quarters ended~~
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
	April 4, 2026		March 29, 2025
Net sales	$	~~757~~681,~~836~~113	$	~~758~~629,~~464~~827	$	~~1,972,975~~	$	~~1,984,390~~
Cost of goods sold	~~416~~387,~~208~~240		~~402~~338,~~450~~737		~~1,058,497~~		~~1,030,249~~
Gross profit	~~341~~293,~~628~~873		~~356~~291,~~014~~090		~~914,478~~		~~954,141~~
Royalty income, net	54,~~428~~619		5,~~740~~332		~~14,008~~		~~14,959~~
Selling, general, and administrative expenses	~~317~~270,~~963~~049		~~284~~270,~~714~~320		~~869,246~~		~~797,572~~
Operating income	2928,~~093~~443		7726,~~040~~102		~~59,240~~		~~171,528~~
Interest expense	711,~~173~~757		7,~~381~~819		~~22,849~~		~~23,156~~
Interest income	(23,~~573~~256)		(23,~~370~~142)		~~(10,007)~~		~~(8,644)~~
Other expense (income), net(*)	882		350		(265)		1,028
Other expense, net	86		76
Pension plan settlement(*)	8,777		949		8,777		949
Income before income taxes	19,856		21,349
Income before income taxes	14,834		70,730		37,886		155,039
Income tax provision	5,520		5,810
Income tax provision	3,241		12,410		10,308		31,047
Net income	$	14,336	$	15,539
Net income	$	11,593	$	58,320	$	27,578	$	123,992
Basic net income per common share	$	0.39	$	0.43
Basic net income per common share	$	0.32	$	1.62	$	0.75	$	3.41
Diluted net income per common share	$	0.39	$	0.43
Diluted net income per common share	$	0.32	$	1.62	$	0.75	$	3.41
Dividend declared and paid per common share	$	0.25	$	0.80
Dividend declared and paid per common share	$	0.25	$	0.80	$	1.30	$	2.40

(*)Pension plan settlement charges for the fiscal quarter and three fiscal quarters ended September 28, 2024 have been reclassified to the Pension plan settlement line item. These charges were previously included in Other expense (income), net.

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands)

(unaudited)

	Fiscal quarter ended				~~Three fiscal quarters ended~~
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
	April 4, 2026		March 29, 2025
Net income	$	1114,~~593~~336	$	5815,~~320~~539	$	~~27,578~~	$	~~123,992~~
Other comprehensive income (loss):
Other comprehensive (loss) income:
Reclassification related to pension plan settlement, net of tax of $1,279 and $224 for the third quarter and first three quarters of fiscal 2025 and fiscal 2024, respectively	4,117		725		4,117		725
Reclassification related to settlement of Carter’s post-retirement life insurance arrangement, net of tax of $(135)	(435)		—
Gain on OshKosh B’Gosh defined benefit plan, net of tax of $281 and $476 for the third quarter and first three quarters of fiscal 2025 and fiscal 2024, respectively	905		1,539		905		1,539
Foreign currency translation adjustments	(1,944)		612
Foreign currency translation adjustments	(312)		(1,811)		10,549		(10,710)
Total other comprehensive (loss) income	(2,379)		612
Total other comprehensive income (loss)	4,710		453		15,571		(8,446)
Comprehensive income	$	11,957	$	16,151
Comprehensive income	$	16,303	$	58,773	$	43,149	$	115,546

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(amounts in thousands, except share amounts)

(unaudited)

	Common stock - shares	~~Commonstock~~Common stock - $		~~Additionalpaid~~Additional paid-~~incapital~~in capital		Accumulated other ~~comprehensiveloss~~comprehensive loss		~~Retainedearnings~~Retained earnings		~~Totalshareholders~~Total shareholders’ equity
Balance at December 28, 2024	36,041,995	$	360	$	3,856	$	(43,678)	$	894,024	$	854,562
Balance at January 3, 2026	36,425,877	$	364	$	19,584	$	(24,361)	$	929,461	$	925,048
Withholdings from vesting of restricted stock	(9379,~~538~~985)	~~(1)~~—		(43,~~221~~012)		—		—		(43,~~222~~012)
Restricted stock activity	~~288~~504,~~657~~225	35		(35)		—		—		—
Stock-based compensation expense	—	—		93,~~753~~684		—		—		93,~~753~~684
Cash dividends declared and paid of $0.80 per common share	—	—		—		—		(28,999)		(28,999)
Cash dividends declared and paid of $0.25 per common share	—	—		—		—		(9,220)		(9,220)
Comprehensive income	—	—		—		~~612~~(2,379)		1514,~~539~~336		1611,~~151~~957
Balance at March 29, 2025	36,237,114	$	362	$	9,385	$	(43,066)	$	880,564	$	847,245
Balance at April 4, 2026	36,850,117	$	369	$	20,251	$	(26,740)	$	934,577	$	928,457
Withholdings from vesting of restricted stock	(3,233)	—		(110)		—		—		(110)
Restricted stock activity	233,190	3		(3)		—		—		—
Stock-based compensation expense	—	—		5,188		—		—		5,188
Cash dividends declared and paid of $0.25 per common share	—	—		—		—		(9,116)		(9,116)
Comprehensive income	—	—		—		10,249		446		10,695
Balance at June 28, 2025	36,467,071	$	365	$	14,460	$	(32,817)	$	871,894	$	853,902
Withholdings from vesting of restricted stock	(6,238)	—		(157)		—		—		(157)
Restricted stock activity	57,804	—		—		—		—		—
Stock-based compensation expense	—	—		3,726		—		—		3,726
Cash dividends declared and paid of $0.25 per common share	—	—		—		—		(9,132)		(9,132)
Comprehensive income	—	—		—		4,710		11,593		16,303
Balance at September 27, 2025	36,518,637	$	365	$	18,029	$	(28,107)	$	874,355	$	864,642


	Common stock - shares	Common stock - $		Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings		Total shareholders’ equity
Balance at December 28, 2024	36,041,995	$	360	$	3,856	$	(43,678)	$	894,024	$	854,562

Withholdings from vesting of restricted stock	(93,538)	(1)		(4,221)		—		—		(4,222)
Restricted stock activity	288,657	3		(3)		—		—		—
Stock-based compensation expense	—	—		9,753		—		—		9,753

Cash dividends declared and paid of $0.80 per common share	—	—		—		—		(28,999)		(28,999)
Comprehensive income	—	—		—		612		15,539		16,151

Balance at March 29, 2025	36,237,114	$	362	$	9,385	$	(43,066)	$	880,564	$	847,245

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)

(amounts in thousands, except share amounts)

(unaudited)

	Common stock - shares	Commonstock - $		Additionalpaid-incapital		Accumulated other comprehensiveloss		Retainedearnings		Totalshareholders’equity
Balance at December 30, 2023	36,551,221	$	366	$	—	$	(23,915)	$	868,799	$	845,250
Exercise of stock options	4,408	—		367		—		—		367
Withholdings from vesting of restricted stock	(90,922)	(1)		(5,535)		—		(1,842)		(7,378)
Restricted stock activity	243,120	2		(2)		—		—		—
Stock-based compensation expense	—	—		5,170		—		—		5,170
Repurchase of common stock	(107,795)	(1)		—		—		(8,998)		(8,999)
Cash dividends declared and paid of $0.80 per common share	—	—		—		—		(29,338)		(29,338)
Comprehensive income	—	—		—		(1,752)		38,033		36,281
Balance at March 30, 2024	36,600,032	$	366	$	—	$	(25,667)	$	866,654	$	841,353
Withholdings from vesting of restricted stock	(839)	—		(58)		—		—		(58)
Restricted stock activity	34,956	1		(1)		—		—		—
Stock-based compensation expense	—	—		4,120		—		—		4,120
Repurchase of common stock	(354,093)	(4)		(3,854)		—		(20,920)		(24,778)
Cash dividends declared and paid of $0.80 per common share	—	—		—		—		(29,172)		(29,172)
Comprehensive income	—	—		—		(7,147)		27,639		20,492
Other	—	—		(207)		—		—		(207)
Balance at June 29, 2024	36,280,056	$	363	$	—	$	(32,814)	$	844,201	$	811,750
Withholdings from vesting of restricted stock	(2,187)	—		(133)		—		—		(133)
Restricted stock activity	35,480	—		—		—		—		—
Stock-based compensation expense	—	—		4,686		—		—		4,686
Repurchase of common stock	(274,535)	(3)		(4,401)		—		(12,345)		(16,749)
Cash dividends declared and paid of $0.80 per common share	—	—		—		—		(28,835)		(28,835)
Comprehensive income	—	—		—		453		58,320		58,773
Other	—	—		(152)		—		—		(152)
Balance at September 28, 2024	36,038,814	$	360	$	—	$	(32,361)	$	861,341	$	829,340

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)

	Three fiscal quarters ended
	Fiscal quarter ended
	September 27, 2025		September 28, 2024
	April 4, 2026		March 29, 2025
Cash flows from operating activities:
Net income	$	2714,~~578~~336	$	~~123~~15,~~992~~539
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of property, plant, and equipment	3712,~~797~~684		4012,~~893~~340
Amortization of intangible assets	~~2,781~~941		~~2,778~~914
Provision for excess and obsolete inventory, net	3,~~912~~140		81,~~348~~385
Loss on disposal of property, plant and equipment	21		235
Amortization of debt issuance costs	568		415
Amortization of debt issuance costs	1,253		1,218
Stock-based compensation expense	3,684		9,753
Stock-based compensation expense	18,667		13,976
Unrealized foreign currency exchange loss (gain), net	95		(295)
Unrealized foreign currency exchange (gain) loss, net	(393)		307
Recoveries of doubtful accounts receivable from customers	(1,558)		(454)
Provision for credit losses	6,864		3,689
Unrealized gain on investments	(460)		(329)
Unrealized gain on investments	(1,477)		(1,678)
Deferred income taxes expense	3,645		6,572
Pension plan settlement	8,777		949
Other operating items, net	(547)		—
Deferred income taxes expense	879		6,416
Effect of changes in operating assets and liabilities:
Accounts receivable	(4816,~~893~~573)		(688,~~035~~603)
Finished goods inventories	~~(153~~74,~~621)~~994		~~(83~~27,~~268)~~122
Prepaid expenses and other assets	(2514,~~509~~991)		(1219,~~376~~035)
Accounts payable and other liabilities	(1473,~~946~~541)		(2693,~~125~~968)
Net cash (used in) provided by operating activities	$	(136,310)	$	11,319
Net cash provided by (used in) operating activities	$	6,417	$	(48,644)
Cash flows from investing activities:
Capital expenditures	$	(426,~~662~~960)	$	(3910,~~637~~346)
Net cash used in investing activities	$	(426,~~662~~960)	$	(3910,~~637~~346)
Cash flows from financing activities:
Dividends paid	$	(479,~~247~~220)	$	(8728,~~345~~999)
Repurchases of common stock	—		(50,526)
Withholdings from vesting of restricted stock	(3,012)		(4,222)
Withholdings from vesting of restricted stock	(4,489)		(7,569)
Other	—		(370)
Proceeds from exercises of stock options	—		367
Net cash used in financing activities	$	(12,232)	$	(33,591)
Other	(370)		—
Net effect of exchange rate changes on cash and cash equivalents	(865)		449
Net cash used in financing activities	$	(52,106)	$	(145,073)
Net decrease in cash and cash equivalents	$	(13,640)	$	(92,132)
Net effect of exchange rate changes on cash and cash equivalents	2,342		(2,286)
Cash and cash equivalents, beginning of period	487,075		412,926
Net decrease in cash and cash equivalents	$	(228,736)	$	(175,677)
Cash and cash equivalents, end of period	$	473,435	$	320,794
Cash and cash equivalents, beginning of period	412,926		351,213
Cash and cash equivalents, end of period	$	184,190	$	175,536

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1 – THE COMPANY

Carter’s, Inc. and its wholly owned subsidiaries (collectively, the “Company”) design, source, and market branded childrenswear under the Carter’s, OshKosh B’gosh (or “OshKosh”), Skip Hop, Child of Mine, Just One You, Simple Joys, Little Planet, Otter Avenue, and other brands. The Company’s products are sourced through contractual arrangements with manufacturers worldwide for sale in the Company’s retail stores, eCommerce sites, and mobile app, which offer the Company’s brand name merchandise and other licensed products manufactured by other companies. The Company also distributes its products to wholesale customers, which include leading department stores, national chains, and specialty retailers domestically and internationally.

Our trademarks that are referred to in this Quarterly Report on Form 10-Q, including Carter’s, OshKosh B’gosh, OshKosh, Skip Hop, Child of Mine, Just One You, Simple Joys, Little Planet, Otter Avenue, PurelySoft, and Carter’s Rewards, many of which are registered in the United States and in over 100 other countries and territories, are each the property of one or more subsidiaries of Carter’s, Inc.

NOTE 2 – BASIS OF PRESENTATION, ~~RECENT~~AND ~~ACCOUNTING~~SUMMARY ~~PRONOUNCEMENTS,~~OF ~~AND~~SIGNIFICANT ~~OTHER~~ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). All intercompany transactions and balances have been eliminated in consolidation.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly the condensed consolidated financial condition, results of operations, comprehensive income, statement of shareholders’ equity, and cash flows of the Company for the interim periods presented. Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature. Operating results for the fiscal quarter ended ~~September~~April 274, ~~2025~~2026 are not necessarily indicative of the results that may be expected for the current fiscal year ending January 32, ~~2026~~2027.

The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

The accompanying condensed consolidated balance sheet as of ~~December~~January 283, ~~2024~~2026 was derived from the Company’s audited consolidated financial statements included in its most recently filed Annual Report on Form 10-K. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC and the instructions to Form 10-Q.

The Company operates on a 52 or 53 week fiscal calendar. Fiscal ~~2025~~2026 will end on January 32, ~~2026~~2027 and includes 5352 weeks. Fiscal ~~2024~~2025 ended on ~~December~~January 283, ~~2024~~2026 and included 5253 weeks. The fiscal quarters ended ~~September~~April 274, ~~2025~~2026 and ~~September~~March 2829, ~~2024~~2025 each included 13 weeks.

Accounting Policies

The accounting policies the Company follows are set forth in its most recently filed Annual Report on Form 10-K. There have been no material changes to these accounting policies. During the first quarter of fiscal 2026, the Company applied the accounting guidance for loss recoveries to potential IEEPA tariff refunds, as described below.

~~Goodwill~~IEEPA ~~and~~Tariff ~~Tradename Assets~~Recovery

During the ~~second~~first quarter of fiscal ~~2025~~2026, the ~~Company~~U.S. ~~identified~~Supreme aCourt ~~triggering~~ruled ~~event~~that ~~related~~tariffs toimposed under the ~~new~~International ~~tariffs~~Emergency ~~enacted~~Economic byPowers ~~the~~Act ~~Trump~~(“IEEPA”) ~~Administration~~were ~~and~~unlawful. ~~the~~Subsequent ~~resulting~~to ~~unfavorable~~April 4, ~~impact~~2026, onfollowing the ~~Company’s~~April ~~financial forecasts~~20, as2026 ~~well~~launch asof aU.S. ~~sustained~~Customs ~~decrease~~and inBorder ~~the Company~~Protection’s ~~stock~~Consolidated ~~price~~Administration ~~since~~and ~~the~~Processing ~~last impairment test conducted in the fourth quarter~~ of ~~fiscal~~Entries ~~2024.~~(“CAPE”) ~~As a result~~process, the Company ~~performed~~submitted aclaims ~~quantitative~~seeking ~~impairment~~approximately ~~test~~$130 million onof ~~the~~refunds ~~goodwill ascribed to each~~ of ~~the~~previously ~~Company’s~~paid ~~reporting~~IEEPA ~~units~~tariffs ~~and~~through on the ~~value~~CAPE ~~of its indefinite-lived intangible tradename assets~~system.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

~~Additionally,~~The ~~during~~Company ~~the~~has ~~third~~elected ~~quarter~~to ofapply ~~fiscal~~a ~~2025,~~gain ~~the~~contingency ~~Company~~model ~~identified~~in aaccordance ~~triggering~~with ~~event~~ASC ~~related~~450-30, “Gain Contingencies” to ~~the~~account ~~sustained~~for ~~decrease~~potential inrecoveries ~~the~~of ~~Company’s~~previously ~~stock~~paid ~~price~~IEEPA ~~since~~tariffs. ~~the~~Under ~~last~~this ~~impairment~~model, ~~test~~a ~~conducted~~gain contingency is not recognized in the ~~second~~financial ~~quarter~~statements ofuntil ~~fiscal~~the ~~2025~~gain is realized or realizable. AsAny arecovery, ~~result~~when recognized, ~~the~~would ~~Company~~be ~~performed~~reflected as a ~~quantitative~~reduction ~~impairment~~of ~~test~~inventory onto the ~~goodwill~~extent ~~ascribed~~the torelated ~~each~~goods ofremain ~~the~~on ~~Company’s~~hand, ~~reporting~~or ~~units~~as ~~and~~a onreduction ~~the~~of ~~value~~Cost of ~~its~~goods ~~indefinite-lived~~sold ~~intangible~~for ~~tradename~~amounts ~~assets~~related to goods already sold.

~~Goodwill~~As of April 4, 2026, the Company had not received any refund payments, and uncertainty remained regarding the timing, amount, and ultimate receipt of any refunds. Accordingly, no gain has been recognized in the condensed consolidated financial statements for the fiscal quarter ended April 4, 2026.

The goodwill impairment assessments for each reporting unit were performed in accordance with ASC 350, “Intangibles--Goodwill and Other” (“ASC 350”) and compares the carrying value of each reporting unit to its fair value. Consistent with prior practice, the Company uses a 50% weighting of the income approach and a 50% weighting of the market approach to determine the fair value of a reporting unit. The assumptions used in these approaches include revenue growth and profitability, terminal growth rates, discount rates, market multiples, and a control premium. Discount rates are dependent upon interest rates and the cost of capital at a point in time. These assumptions are consistent with those we believe hypothetical marketplace participants would use. An impairment is recorded for any excess carrying value above the fair value of the reporting unit, not to exceed the carrying value of goodwill.

Based on these assessments, there were no impairments to the value of goodwill in the second quarter or third quarter of fiscal 2025. The assessment performed in the third quarter of fiscal 2025 indicated that the fair value of assets exceeded its carrying value for the U.S. Wholesale reporting unit by over 100%. The assessment indicated that the fair value of assets for the U.S. Retail, Canada, and Other International reporting units exceeded its carrying values by approximately 4%, 7%, and 4%, respectively.

Tradename Assets

The indefinite-lived tradename asset assessments were performed in accordance with ASC 350 and were determined using the relief-from-royalty valuation method, which examines the hypothetical cost savings that accrue as a result of not having to license the tradename from another owner. The relief-from-royalty valuation method involves two steps: (1) estimation of reasonable royalty rates for the tradename assets and (2) the application of these royalty rates to a forecasted net revenue stream and discounting the resulting cash flows to determine a fair value. If the carrying amount exceeds the fair value of the tradename, an impairment charge is recognized in the amount of the excess.

Based on these assessments, there were no impairments to the value of our indefinite-lived tradename assets in the second quarter or third quarter of fiscal 2025.

Related Party Transaction

In August 2025, the Company appointed Emily D. Evert to its executive leadership team as Chief Strategy Officer. Prior to joining the Company, Emily was a managing director and partner at The Boston Consulting Group, Inc. (“BCG”).

The Company engaged BCG to provide general consulting services in fiscal 2024 and to support operating model improvement initiatives in fiscal 2025. The aggregate fees paid to BCG were approximately $13.6 million in the first three quarters of fiscal 2025 and $1.7 million in the first three quarters of fiscal 2024. As of September 27, 2025, December 28, 2024, and September 28, 2024, outstanding payables to BCG under these engagements were $0.5 million, $0.1 million, and $0.1 million, respectively.

These arrangements were entered into with BCG prior to Ms. Evert’s joining the Company and the engagements with BCG were entered into on terms Management believes to be consistent with those negotiated in an arm’s-length transaction with an unrelated third party.

Shareholder Right’s Plan

On September 22, 2025, the Board of Directors (the “Board”) of the Company adopted a limited duration shareholder rights agreement (the “Rights Agreement”) in response to the rapid accumulation of a significant amount of the common stock of the Company by a third party. The agreement is intended to reduce the likelihood that any entity, person or group is able to gain control of the Company through open market accumulation without paying all stockholders an appropriate control premium or providing the Board sufficient opportunity to make informed judgments and take actions that are in the best interests of all shareholders. Pursuant to the agreement, the Company issued, by means of a “dividend”, one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock to shareholders of record on the close of business on October 3, 2025. Initially, these Rights are not exercisable and trade with, and are represented by, the shares of the Company’s common stock. The Rights Agreement will expire on September 21, 2026, or earlier, as provided in the Right’s Agreement.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Under the Rights Agreement, if a person or group (each, an “acquiring person”) acquires beneficial ownership of 15% (or 20% in the case of investors eligible to file Schedule 13Gs) or more of the outstanding shares of the Company’s common stock in a transaction not approved by the Board, the Board, at its option, may exchange each Right (other than Rights owned by the acquiring person that will become void and will not be exercisable) in whole or in part, at an exchange ratio of one share of the Company’s common stock, or one ten-thousandth of a share of Series A Junior Participating Preferred Stock (the “Preferred Stock”) (or of a share of a class or series of the Company’s preferred stock having equivalent rights, preferences and privileges), per outstanding right, subject to adjustment.

Adoption of the Rights Plan did not have an impact on the Company’s condensed consolidated financial statements, including basic and diluted earnings per share. Additional information is included in the Company’s current report on Form 8-K filed September 24, 2025, which is not incorporated herein by reference.

Recent Accounting Pronouncements

Income Taxes - Improvements to Income Tax Disclosures (ASU 2023-09)

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes - Improvements to Income Tax Disclosures. This new guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and greater disaggregation of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this amendment on its consolidated financial statements but does not expect the effect of the adoption of ASU 2023-09 to be material.

Disaggregation of Income Statement Expenses (ASU 2024-03)

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. This new guidance is intended to increase transparency and comparability of financial statements by requiring disclosure of significant expense components for certain expenses on the face of the consolidated statement of operations. The ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company expects to adopt the ASU in the fourth quarter of fiscal 2027 using a prospective transition method. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements but does not expect the effect of the adoption of ASU 2024-03 to be material.

~~NOTE 3~~ Internal-Use ~~REVENUE~~Software ~~RECOGNITION~~(ASU 2025-06)

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software. The ~~Company’s~~ASU ~~revenues~~modernizes ~~are~~the ~~earned~~accounting ~~from~~for ~~contracts~~internal-use orsoftware ~~arrangements~~by ~~with~~removing ~~retail~~the existing “software development stages” model and ~~wholesale~~instead ~~customers~~requiring capitalization of internal-use software costs when (1) management has authorized and ~~licensees~~committed to funding the project and (2) it is probable the project will be completed and the software will be used as intended. ~~Contracts~~The ~~include~~ASU ~~written~~is ~~agreements~~effective for fiscal years beginning after December 15, as2027 ~~well~~and asinterim ~~arrangements~~periods ~~that~~within ~~are~~those ~~implied~~annual byperiods, ~~customary~~with ~~practices~~early oradoption ~~law~~permitted. The Company is currently evaluating the timing and transition method of its adoption of the ASU.

NOTE 3 – REVENUE RECOGNITION

The Company generates revenue primarily from the sale of products to retail and wholesale customers and from royalties earned under licensing arrangements. Contracts with customers include written agreements as well as arrangements that are implied by customary business practices or law.

Disaggregation of Revenue

The Company sells ~~its~~ products directly to consumers (“direct-to-consumer”) through its retail stores, eCommerce websites, and mobile app, and to other ~~retail~~retailers ~~companies~~ and partners that ~~subsequently~~in turn sell the products ~~directly~~ to their own ~~retail~~ customers (“wholesale channel”). The Company also earns royalties from certain of its licensees. ~~Disaggregated~~that ~~revenues~~sell ~~from~~products ~~these~~under ~~sources for~~ the ~~fiscal~~Company’s ~~periods indicated were as follows:~~brands.

	Fiscal quarter ended September 27, 2025
(dollars in thousands)	U.S. Retail		U.S. Wholesale		International		Total
Direct-to-consumer	$	362,307	$	—	$	70,209	$	432,516
Wholesale channel	—		283,805		41,515		325,320
	$	362,307	$	283,805	$	111,724	$	757,836
Royalty income, net	$	2,434	$	2,239	$	755	$	5,428

Disaggregated revenues from these sources were as follows:

Three fiscal quarters ended September 27, 2025

Fiscal quarter ended April 4, 2026

(dollars in thousands)

U.S. Retail

U.S. Wholesale

International

Total

Direct-to-consumer

~~956~~332,~~288~~248

—

~~184~~63,~~651~~877

1396,~~140,939~~125

Wholesale channel

—

~~726~~251,~~899~~406

~~105~~33,~~137~~582

~~832~~284,~~036~~988

~~956~~332,~~288~~248

~~726~~251,~~899~~406

~~289~~97,~~788~~459

1681,~~972,975~~113

Royalty income, net

41,~~359~~441

72,~~680~~890

~~1,969~~288

144,~~008~~619

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fiscal quarter ended September 28, 2024

Fiscal quarter ended March 29, 2025

(dollars in thousands)

U.S. Retail

U.S. Wholesale

International

Total

Direct-to-consumer

~~352~~294,~~987~~432

—

6753,~~172~~823

~~420~~348,~~159~~255

Wholesale channel

—

~~298~~250,~~980~~096

3931,~~325~~476

~~338~~281,~~305~~572

~~352~~294,~~987~~432

~~298~~250,~~980~~096

~~106~~85,~~497~~299

~~758~~629,~~464~~827

Royalty income, net

21,~~539~~518

23,~~884~~322

~~317~~492

5,~~740~~332

	Three fiscal quarters ended September 28, 2024
(dollars in thousands)	U.S. Retail		U.S. Wholesale		International		Total
Direct-to-consumer	$	950,877	$	—	$	176,583	$	1,127,460
Wholesale channel	—		756,022		100,908		856,930
	$	950,877	$	756,022	$	277,491	$	1,984,390
Royalty income, net	$	4,581	$	8,727	$	1,651	$	14,959

Accounts Receivable from Customers and Licensees

~~The~~Accounts ~~components~~receivable ofprimarily ~~Accounts~~represent ~~receivable,~~amounts due from wholesale customers and licensees and are recorded net ~~were~~of asallowances ~~follows:~~for chargebacks and expected credit losses.

(dollars in thousands)	September 27, 2025		December 28, 2024		September 28, 2024
Trade receivables from wholesale customers, net	$	239,417	$	187,715	$	243,085
Royalties receivable	4,960		3,728		5,237
Other receivables(1)	8,957		13,444		12,030
Total gross receivables	$	253,334	$	204,887	$	260,352
Less: Wholesale accounts receivable reserves(2)(3)	(15,468)		(10,053)		(13,339)
Accounts receivable, net	$	237,866	$	194,834	$	247,013

The components of Accounts receivable, net, were as follows:

(1)Includes receivables related to tax recoveries, shipping volume rebates, healthcare-related rebates, amounts due from third-party gift card program partners, and recoveries related to provisional anti-dumping duties in Mexico.


(dollars in thousands)	April 4, 2026		January 3, 2026		March 29, 2025
Trade receivables from wholesale customers, net	$	192,394	$	174,566	$	196,109
Royalties receivable, net	4,488		4,011		4,830
Other receivables(1)	9,713		11,705		11,241
Total receivables	$	206,595	$	190,282	$	212,180
Less: Wholesale accounts receivable reserves(2)(3)	(9,999)		(11,716)		(8,307)
Accounts receivable, net	$	196,596	$	178,566	$	203,873

(21)Includes ~~allowance~~receivables ~~for~~related ~~chargebacks~~to ~~of $3.4 million~~shipping volume rebates, ~~$4.4 million~~healthcare-related rebates, ~~and~~amounts ~~$5.0 million~~due ~~for~~from ~~the~~third-party ~~periods~~gift ~~ended~~card ~~September 27,~~program ~~2025~~partners, ~~December 28,~~recoveries ~~2024,~~related ~~and~~to ~~September 28,~~provisional ~~2024~~anti-dumping duties in Mexico, ~~respectively~~and tax recoveries.

(32)Includes allowance for ~~credit~~chargebacks ~~losses~~ of $124.0 million, $54.7 1 million, and $8.3 .1 million for the periods ended ~~September~~April 274, ~~2025~~2026, ~~December~~January 283, ~~2024~~2026, and ~~September~~March 2829, ~~2024~~2025, respectively.

(3)Includes allowance for credit losses of $6.0 million, $7.6 million, and $5.2 million for the periods ended April 4, 2026, January 3, 2026, and March 29, 2025, respectively.

Contract Assets and Liabilities

The Company’s contract assets are not material to the Company’s condensed consolidated financial statements.

10The Company recognizes a contract liability when it has received consideration before transferring the related goods to the customer. The Company’s contract liabilities primarily consist of (1) obligations related to unredeemed gift cards, (2) unredeemed customer loyalty rewards, and (3) the unamortized upfront bonus received from a third-party financial institution under the Company’s private label credit card program. Contract liabilities are classified as current and are included in Other current liabilities on the Company’s consolidated balance sheets.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Contract Liabilities

~~The Company recognizes a contract liability when it has received consideration from a customer and has a future obligation to transfer goods to the customer.~~ Total contract liabilities ~~consisted~~were ofas ~~the following amounts~~follows:

(dollars in thousands)	~~September~~April 274, ~~2025~~2026		~~December~~January 283, ~~2024~~2026		~~September~~March 2829, ~~2024~~2025
Contract liabilities - current:
Unredeemed gift cards(1)	$	25,318	$	25,043	$	24,638
Unredeemed gift cards	$	25,337	$	25,994	$	24,275
Unredeemed customer loyalty rewards	2,~~232~~609		2,~~552~~372		2,~~362~~098
Carter’s credit card - upfront bonus(2)	179		714		714
Carter’s credit card - upfront bonus	—		—		536
Total contract liabilities - current(3)	$	27,729	$	28,309	$	27,714
Total contract liabilities - current	$	27,946	$	28,366	$	26,909
Contract liabilities - non-current(4)	$	—	$	—	$	179
Total contract liabilities	$	27,729	$	28,309	$	27,893

~~(1)During~~Composition ~~the third quarters~~ of ~~fiscal~~Contract 2025 and fiscal 2024, the Company recognized revenue of $1.3 million and $1.4 million related to the gift card liability balance that existed at June 28, 2025 and June 29, 2024, respectively. Additionally, during the first three quarters of fiscal 2025 and fiscal 2024, the Company recognized revenue of $6.8 million and $7.1 million related to the gift card liability balance that existed at December 28, 2024 and December 30, 2023, respectively.Liabilities

~~(2)The~~Unredeemed ~~Company~~gift ~~received~~cards an- ~~upfront~~represent ~~signing~~obligations ~~bonus~~to ~~from~~transfer agoods ~~third-party~~in ~~financial~~the ~~institution,~~future ~~which~~to ~~will~~customers bethat ~~recognized~~have aspurchased ~~revenue~~gift oncards. aGift ~~straight-line~~card ~~basis~~contract ~~over~~liabilities change due to the ~~term~~issuance and redemption of gift cards and the ~~agreement~~recognition of breakage on balances that are not expected to be redeemed. ~~The~~Although ~~amount~~gift cards do not expire, all outstanding gift card balances are classified as ofcurrent ~~September 27~~liabilities, ~~2025~~as ~~reflects~~they are redeemable on demand by the ~~current~~cardholder. ~~portion~~The majority of ~~this~~gift ~~bonus~~cards ~~and~~are ~~will~~redeemed bewithin ~~recognized~~one asyear ~~revenue~~of ~~through~~issuance. During the ~~end~~first quarters of fiscal 2026 and fiscal 2025., ~~The~~the ~~amounts~~Company asrecognized revenue of ~~December~~$4.1 ~~28,~~million ~~2024~~ and ~~September~~$3.6 ~~28,~~million ~~2024~~related ~~reflected~~to the ~~current~~gift ~~portion~~card ofliability ~~this~~balance ~~bonus~~that ~~and~~existed ~~were~~at ~~recognized~~the asbeginning ~~revenue~~of ~~over~~each ~~the~~respective ~~subsequent twelve months~~period.

~~(3)Included with Other current liabilities on the Company’s condensed consolidated balance sheets.~~8

~~(4)This~~NOTES ~~amount~~TO ~~reflects~~CONDENSED ~~the~~CONSOLIDATED ~~non-current~~FINANCIAL ~~portion~~STATEMENTS ~~of the Carter’s credit card signing bonus and is included within Other long-term liabilities on the Company’s condensed consolidated balance sheets.~~(continued)

Unredeemed loyalty rewards - represent obligations under the Company’s loyalty program to transfer goods in the future to customers when the reward certificates are redeemed. Changes in the loyalty program contract liability result from new rewards earned, and reward certificate redemptions and expirations. The earning and redemption cycles are under one year in duration.

Carter’s credit card - upfront bonus - represents the unamortized portion of the upfront signing bonus received from a third-party financial institution under the Company’s private label credit card program. This bonus was recognized as revenue over the term of the agreement.

NOTE 4 – OTHER CURRENT LIABILITIES

(dollars in thousands)	September 27, 2025		December 28, 2024		September 28, 2024
Unredeemed gift cards	$	25,318	$	25,043	$	24,638
Accrued employee benefits	17,180		20,824		14,995
Accrued bonuses and incentive compensation(1)	13,851		2,757		2,866
Accrued taxes	10,671		14,455		10,512
Income taxes payable	7,286		13,820		1,099
Accrued salaries and wages	6,203		12,345		5,999
Other(2)	30,398		40,808		19,950
Other current liabilities	$	110,907	$	130,052	$	80,059

Other current liabilities consisted of the following:

(1)Increase as of September 27, 2025 relates to a higher projected attainment of annual incentive objectives relative to the prior periods.


(dollars in thousands)	April 4, 2026		January 3, 2026		March 29, 2025
Unredeemed gift cards	$	25,337	$	25,994	$	24,275
Accrued interest (1)	16,549		5,736		1,364
Accrued employee benefits (2)	12,542		28,021		13,079

Accrued taxes	8,803		10,334		8,169

Accrued bonuses and incentive compensation	3,097		19,861		3,076

Other(3)	45,021		43,863		34,771
Other current liabilities	$	111,349	$	133,809	$	84,734

(21)~~Includes~~Increase ~~accruals~~as ~~for~~of ~~severance~~April ~~and~~4, ~~other~~2026 ~~termination~~reflects ~~benefits,~~the ~~freight,~~timing ~~and~~of interest payments on long-term debt.

(2)Includes accruals for severance and other termination benefits. See Note 13, Organizational Restructuring, for additional information.

(3)Amount as of April 4, 2026 and January 3, 2026 includes liabilities under the deferred compensation plan. See Note 10, Fair Value Measurements, for additional information.

NOTE 5 – SUPPLY CHAIN FINANCE PROGRAM

We have established a voluntary supply chain finance (“SCF”) program through participating financial institutions. This SCF program enables participating suppliers to accelerate payments for receivables due from the Company by selling ~~them~~receivables directly to the participating financial institutions at their discretion. As of ~~September~~April 274, ~~2025~~2026, the SCF program has a $70.0 million revolving capacity. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the SCF program and we have no economic interest in the supplier’s decision to sell a receivable. Payment terms for most of our suppliers are 60 days, regardless of participation in the SCF program. The Company settles obligations with the participating financial institutions in accordance with the original invoice due dates, and participation in the SCF program does not extend the Company’s payment terms. The Company does not provide any guarantees ~~under~~in connection with the SCF program and does not pledge collateral under the program.

The Company’s liability related to amounts payable to the participating financial ~~institution~~institutions for suppliers who voluntarily participate in the SCF program ~~are~~is included in Accounts payable on our ~~condensed~~ consolidated balance sheets. As of ~~September~~April 274, ~~2025~~2026, ~~December~~January 283, ~~2024~~2026, and ~~September~~March 2829, ~~2024~~2025, amounts under the SCF program included in Accounts payable were $2411.5 6 million, $1913.0 5 million, and $14.3 million, respectively. Payments made in connection with the SCF program, like payments of other accounts payable, are reflected as a reduction to our operating cash flow.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 6 – LONG-TERM DEBT

Long-term debt consisted of the following:

(dollars in thousands)	~~September~~April 274, ~~2025~~2026		~~December~~January 283, ~~2024~~2026		~~September~~March 2829, ~~2024~~2025
$500 million 5.625% senior notes due March 15, 2027	$	500,000	$	500,000	$	500,000
$575 million 7.375% Senior Notes due 2031	$	575,000	$	575,000	$	—
Less unamortized issuance-related costs for senior notes	(1,262)		(1,873)		(2,070)
$500 million 5.625% Senior Notes due 2027	—		—		500,000
Senior notes, net	$	498,738	$	498,127	$	497,930
Less: unamortized debt issuance-related costs	(7,513)		(7,827)		(1,672)
Senior notes, net	$	567,487	$	567,173	$	498,328
Secured revolving credit facility	—		—		—
Long-term debt, net	$	498,738	$	498,127	$	497,930
Total long-term debt, net	$	567,487	$	567,173	$	498,328

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Secured Revolving Credit Facility

As of ~~September~~April 274, ~~2025,~~2026 ~~December~~and January 283, ~~2024~~2026, the Company had no outstanding borrowings under its secured asset-based revolving credit facility (“ABL facility”), exclusive of $5.5 million and ~~September~~$6.3 million of outstanding letters of credit, respectively. As of March 2829, ~~2024~~2025, the Company had no outstanding borrowings under its secured cash-flow-based revolving credit facility, exclusive of $6.94 million of outstanding letters of credit. As of April 4, 2026, January 3, 2026, and March 29, 2025, there was approximately $4605.2 million, $743.7 million, and $5843.76 million ofavailable for future borrowing, respectively. Any outstanding ~~letters~~borrowings ofunder the Company’s ABL facility and secured cash-flow-based revolving credit, ~~respectively~~facility are classified as non-current liabilities on the Company’s condensed consolidated balance sheets due to contractual repayment terms under the credit facility. However, these repayment terms also allow us to repay some or all of the outstanding borrowings at any time.

AsABL of September 27, 2025, December 28, 2024, and September 28, 2024, there was $843.1 million, $845.3 million, and $844.3 million available for future borrowing. Any outstanding borrowings under the Company’s secured revolving credit facility are classified as non-current liabilities on the Company’s condensed consolidated balance sheets due to the contractual repayment terms under the credit facility. However, these repayment terms also allow us to repay some or all of the outstanding borrowings at any time.Facility

~~Terms~~On November 17, 2025, the Company, through its wholly-owned subsidiary, The William Carter Company (“TWCC”), entered into a new five-year ABL facility of up to $750.0 million. The ABL facility replaced the ~~Secured~~Company’s ~~Revolving~~existing ~~Credit~~$850.0 million ~~Facility~~secured cash-flow-based revolving credit facility due April 2027. Borrowings under the ABL facility will mature, and lending commitments thereunder will terminate, in November 2030.

The ~~Company’s~~ABL ~~secured revolving credit~~ facility ~~provides~~contains ~~for~~various ancovenants, ~~aggregate~~including ~~credit~~those ~~line of $850 million which includes a $750 million U.S. dollar facility and a $100 million multicurrency facility. The credit facility matures in April 2027. The facility contains covenants~~ that restrict the Company’s ability ~~to,~~and ~~among~~the ~~other~~ability ~~things:~~of ~~(i)~~its ~~create~~restricted orsubsidiaries to incur ~~liens,~~certain ~~debt~~indebtedness, ~~guarantees~~pay dividends or make distributions or other ~~investments~~restricted payments, ~~(ii)~~or ~~engage~~to ingrant ~~mergers~~certain ~~and~~liens ~~consolidations,~~on ~~(iii)~~their ~~pay~~respective ~~dividends~~property or assets, among other ~~distributions~~things. ~~to,~~The ~~and~~ABL ~~redemptions~~facility ~~and~~also ~~repurchases~~includes ~~from,~~a ~~equity~~springing ~~holders~~financial covenant, ~~(iv)~~consisting ~~prepay~~of, ~~redeem~~if orthe ~~repurchase~~excess ~~subordinated~~availability orfalls ~~junior~~below ~~debt~~certain thresholds, ~~(v)~~a ~~amend~~fixed ~~organizational~~charge ~~documents,~~coverage ~~and~~ratio ~~(vi)~~not ~~engage~~to inbe ~~certain~~less ~~transactions~~than ~~with~~1.00 ~~affiliates~~to 1.00.

The ~~Company’s~~availability ~~secured~~under ~~revolving~~the ~~credit~~ABL facility ~~provides~~was ~~for~~$605.2 million aand ~~leverage-based~~$743.7 ~~pricing~~million ~~grid~~as ~~which~~of ~~determines~~April 4, an2026 ~~interest~~and ~~rate~~January 3, ~~for borrowings~~2026, ~~calculated~~respectively. asAvailability ~~the~~is ~~applicable~~determined ~~floating~~using ~~benchmark~~borrowing ~~rate~~base ~~plus~~calculations aof ~~credit~~eligible ~~spread~~inventory, ~~adjustment~~accounts receivable, ifand ~~any~~intellectual property balances, ~~plus~~less anavailability ~~amount~~reserves, ~~ranging~~current ~~from~~outstanding ~~1.125%~~borrowings tounder ~~1.625%~~the ABL facility, and outstanding letters of credit. Availability may fluctuate throughout the year principally based on ~~leverage~~changes in eligible inventory and accounts receivable balances. As of ~~September~~April 274, ~~2025~~2026, the borrowing rate for ana ~~adjusted~~ term Secured Overnight Financing Rate (“SOFR”) loan would have been 54.3990%, which includes aan ~~leverage~~excess availability-based adjustment of 1.~~125~~25%.

As of ~~September~~April 274, ~~2025~~2026, the Company was in compliance with its ~~financial~~covenants and ~~other~~requirements ~~covenants~~ under the ~~secured~~ABL ~~revolving credit~~ facility.

InSenior October 2025, the Company’s wholly-owned subsidiaries, The William Carter Company and The Genuine Canadian Corp., obtained commitments for a new five-year asset-based revolving credit facility with initial borrowing commitments of no less than $750 million, subject to the borrowing base under the new facility. Additionally, the Company is evaluating opportunities to refinance our $500.0 million principal amount of senior notes outstanding that mature on March 15, 2027.Notes

On November 13, 2025, TWCC issued $575.0 million principal amount of senior notes at par, bearing interest at a rate of 7.375% per annum, and maturing on February 15, 2031. TWCC received net proceeds from the offering of the senior notes of approximately $567.0 million, after deducting underwriting fees and other expenses, which TWCC used to redeem the senior notes discussed below and for other general corporate purposes. Approximately $8.0 million, including both bank fees and other third-party expenses, was capitalized in connection with the issuance and is being amortized over the term of the senior notes.

On November 27, 2025, TWCC redeemed $500.0 million principal amount of senior notes, bearing interest at a rate of 5.625% per annum, and originally maturing on March 15, 2027. Pursuant to the optional redemption provisions described in the indenture dated as of March 14, 2019, TWCC paid the outstanding principal plus accrued and unpaid interest.

NOTE 7 – COMMON STOCK

Open Market Share Repurchases

The Company’s ~~repurchased~~Board ~~and~~of ~~retired~~Directors ~~shares~~(the in“Board”) ~~open~~has ~~market~~authorized ~~transactions~~the inrepurchase of shares of the ~~following~~Company’s ~~amounts~~common ~~for~~stock under share repurchase programs with an aggregate authorization of up to $1.00 billion. As of April 4, 2026, the ~~fiscal~~total ~~periods~~remaining ~~indicated:~~capacity under outstanding repurchase authorizations was $599.0 million, based on settled repurchase transactions. The share repurchase authorizations have no expiration dates.

	Fiscal quarter ended				Three fiscal quarters ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Number of shares repurchased(1)	—		274,535		—		736,423
Aggregate cost of shares repurchased (dollars in thousands)(2)	$	—	$	16,749	$	—	$	50,526
Average price per share(2)	$	—	$	61.01	$	—	$	68.61

The Company did not repurchase and retire shares through open market transactions during the first quarters of fiscal 2026 and 2025.

~~(1)Share~~Future repurchases ~~were~~may ~~made~~occur from time to time in ~~compliance~~the ~~with~~open ~~all~~market, ~~applicable~~in ~~rules~~privately ~~and~~negotiated ~~regulations~~transactions, or otherwise. The timing and inamount ~~accordance~~of ~~with~~any repurchases will be at the ~~share~~discretion ~~repurchase~~of ~~authorizations.~~the Company subject to restrictions under the Company’s secured asset-based revolving credit facility, market conditions, stock price, other investment priorities, excise taxes, and other factors.

~~(2)The aggregate cost of share repurchases and average price paid per share exclude excise tax on share repurchases.~~10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The total aggregate remaining capacity under outstanding repurchase authorizations as of September 27, 2025 was $599.0 million, based on settled repurchase transactions. The share repurchase authorizations have no expiration date.

Future repurchases may occur from time to time in the open market, in privately negotiated transactions, or otherwise. The timing and amount of any repurchases will be at the discretion of the Company subject to restrictions under the Company’s secured revolving credit facility, market conditions, stock price, other investment priorities, and other factors.

Dividends

In the first, ~~second,~~quarter ~~and third quarters~~ of fiscal ~~2025~~2026, the Company’s Board ~~of Directors~~ declared, and the Company paid, a cash dividend per common share of $0.~~80, $0.~~25~~, and $0~~.~~25,~~ ~~respectively (for an aggregate cash dividend per common share of $1.30 for the first three quarters of fiscal 2025).~~ Additionally, in ~~each of~~ the first ~~three~~quarter ~~quarters~~ of fiscal ~~2024~~2025, the Board ~~of Directors~~ declared, and the Company paid, a cash dividend per common share of $0.80 ~~(for an aggregate cash dividend per common share of $2~~.40 for the first three quarters of fiscal 2024). The Board of Directors will evaluate future dividend declarations based on a number of factors, including restrictions under the Company’s secured revolving credit facility, business conditions, the Company’s financial performance, and other considerations.

~~Provisions~~The inBoard ~~the~~will ~~Company’s~~evaluate ~~secured~~future ~~revolving~~dividend ~~credit~~declarations ~~facility~~based ~~could~~on ~~have~~a ~~the~~number ~~effect~~ of ~~restricting~~factors, including restrictions under the Company’s ~~ability~~secured toasset-based ~~pay~~revolving ~~cash~~credit ~~dividends on~~facility, orbusiness ~~make future repurchases of~~conditions, ~~its~~the ~~common~~Company’s ~~stock,~~financial ~~as further described in Note 6~~performance, ~~Long-term~~and ~~Debt,~~other ~~to the condensed consolidated financial statements~~considerations.

Provisions in the Company’s secured asset-based revolving credit facility could have the effect of restricting the Company’s ability to pay cash dividends on, or make future repurchases of its common stock, as further described in Note 6, Long-term Debt, to the condensed consolidated financial statements.

NOTE 8 – STOCK-BASED COMPENSATION

The Company recorded stock-based compensation cost as follows:

The Company recorded stock-based compensation expense as follows:


	Fiscal quarter ended
(dollars in thousands)	April 4, 2026		March 29, 2025

Restricted stock:
Time-based awards (1)	$	3,309	$	9,072
Performance-based awards	143		283
Market-based awards	232		398

Total	$	3,684	$	9,753

	Fiscal quarter ended				Three fiscal quarters ended
(dollars in thousands)	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Restricted stock:
Time-based awards(1)	$	2,919	$	4,005	$	15,260	$	12,437
Performance-based awards(2)	694		444		1,125		(605)
Market-based awards	113		237		682		544
Stock awards	—		—		1,600		1,600
Total	$	3,726	$	4,686	$	18,667	$	13,976

(1)First quarter of 2025 includes accelerated vesting of outstanding time-based restricted stock awards related to the retirement of the Company’s former CEO.

(1)Increase in the first three quarters of fiscal 2025 was primarily due to the accelerated vesting of outstanding time-based restricted stock awards related to the retirement of our former CEO in the first quarter of fiscal 2025.

(2)During the first three quarters of fiscal 2024, the achievement of performance target estimates related to certain performance-based grants were revised resulting in a reversal of previously recognized stock-based compensation expense.

The Company recognizes compensation cost ratably over the applicable performance periods based on the estimated probability of achievement of its performance targets at the end of each period.

OnA ~~April~~total ~~3, 2025, the Company granted the following awards to Douglas C. Palladini in connection with his appointment as CEO and President~~ of ~~the Company and a member of the Board of Directors: 98~~174,~~400~~091 ~~shares of~~ time-based restricted stock awards and 9824,~~400~~940 ~~shares~~ of ~~market~~performance-based restricted stock awards. ~~The~~vested ~~number~~in ~~of shares granted was based on~~ the ~~closing~~first ~~price~~quarter of ~~the~~fiscal ~~Company’s stock on the grant date, which was $35~~2026.57, with the time-based restricted stock awards having a grant-date fair value of $35.57 per share and the market-based restricted stock awards having a grant-date fair value of $10.67 per share. A Monte-Carlo simulation was utilized to determine the grant-date fair value of the market-based restricted stock awards.

~~The~~Additionally, ~~market-based~~in ~~restricted~~the ~~stock~~first ~~awards~~quarter ~~issued~~of tofiscal ~~Mr.~~2026, ~~Palladini~~the ~~are~~Company’s ~~eligible~~Board toapproved bethe ~~earned~~issuance ~~upon~~of ~~achieving~~the ~~share~~following ~~price~~new ~~hurdles~~awards ~~for~~to 20certain ~~consecutive~~key ~~trading~~employees ~~days~~under ~~over~~the aCompany’s ~~three~~existing stock-~~year~~based ~~period~~compensation plan, ~~starting~~subject onto ~~the~~vesting: ~~award~~454,741 ~~grant~~shares ~~date.~~of ~~The share price hurdles were set~~ time-based onrestricted ~~growth~~stock ~~rates~~awards ofwith ~~30%,~~a ~~60%,~~weighted ~~and~~average ~~90%~~grant-date ~~above~~fair ~~the~~value ~~closing~~of ~~stock~~$34.95 ~~price~~per onaward, ~~grant date~~107,523 ~~which~~shares ~~was~~of ~~$35.57. One~~performance-~~third~~based ofrestricted ~~the~~stock ~~award~~awards ~~will~~with bea ~~earned~~weighted ~~upon~~average ~~achievement~~grant-date offair ~~each~~value of ~~the~~$34.95 ~~applicable~~per ~~share~~award, ~~price~~and ~~hurdles~~107,508 ~~but no earned~~ shares ~~will vest until the end~~ of ~~the three~~market-~~year~~based ~~period,~~restricted ~~subject~~stock toawards ~~Mr.~~with ~~Palladini’s~~a ~~continued~~weighted ~~employment~~average ~~through~~grant-date ~~the~~fair ~~end~~value of ~~the~~$52.95 ~~three-year~~per ~~period~~award.

13The market-based restricted stock awards cliff vest after a three-year period, subject to the performance of the Company’s total shareholder return (“TSR”) relative to a defined peer group over the three-year period. A Monte-Carlo simulation was utilized to determine the grant-date fair value of the market-based restricted stock awards in fiscal 2026, using the following assumptions: beginning TSR price of $32.14, grant-date share price of $34.95, simulation term of 3 years, expected volatility of 45.7%, and risk-free interest rate of 3.5%.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of Accumulated other comprehensive loss consisted of the following:

(dollars in thousands)	~~September~~April 274, ~~2025~~2026		~~December~~January 283, ~~2024~~2026		~~September~~March 2829, ~~2024~~2025
Cumulative foreign currency translation adjustments	$	(2927,~~173~~372)	$	(3925,~~722~~428)	$	(2839,~~943~~110)
Pension and post-retirement obligations(*)	1,066		(3,956)		(3,418)
Pension and post-retirement obligations(1)(2)(3)	632		1,066		(3,956)
Total accumulated other comprehensive loss	$	(2826,~~107~~740)	$	(4324,~~678~~361)	$	(3243,~~361~~066)

(*1)Net of income taxes of $0.32 million, $10.23 million, and $1.12 million, for the ~~periods~~period ended ~~September~~April 274, ~~2025~~2026, ~~December~~January 283, ~~2024~~2026, and ~~September~~March 2829, ~~2024~~2025, respectively.

(2)In fiscal 2025, the Company substantially completed the process of settling its pension obligations under the frozen OshKosh B’Gosh, Inc. Pension Plan. ~~Settlements~~In the first quarter of fiscal 2026, the Company distributed the surplus plan assets, net of final plan expenses and adjustments, in accordance with the terms of the plan and regulatory requirements.

~~During~~(3)In the ~~third~~first quarter of fiscal ~~2025~~2026, the Company ~~substantially~~settled ~~completed the process of settling~~ its ~~pension obligations under the frozen OshKosh B’Gosh, Inc. Pension Plan (the “pension plan”). In August 2025, the pension plan used existing pension plan assets to purchase non~~post-~~participating~~retirement ~~annuity~~life ~~contracts from an~~ insurance ~~company and to make single-sum payments to certain plan participants, thereby settling its existing pension benefit obligations~~liabilities. ~~The Company expects to distribute surplus plan assets to plan participants in fiscal 2026 in accordance with the terms of the plan and regulatory requirements.~~

As a result of the settlement, the Company remeasured the funded status of the pension plan as of August 31, 2025. In the third quarter and first three quarters of fiscal 2025, a gain on pension obligations of $0.9 million (net of income taxes of $0.3 million) was recognized in Accumulated other comprehensive (loss) income related to this remeasurement. Additionally, in the third quarter and first three quarters of fiscal 2025, $4.1 million of deferred losses on pension obligations (net of income taxes of $1.3 million) were reclassified from Accumulated other comprehensive loss to Pension plan settlement within the condensed consolidated statement of operations in connection with the settlement of the pension plan. Refer to Note 13, Employee Benefit Plans, to the condensed consolidated financial statements.11

InNOTES ~~the~~TO ~~third~~CONDENSED ~~quarter~~CONSOLIDATED ofFINANCIAL ~~fiscal~~STATEMENTS 2024 the Company made single-sum payments to certain participants in the pension plan, thereby reducing its pension benefit obligations. As a result of the single-sum payout, the Company remeasured the funded status of the pension plan as of August 31, 2024. In the third quarter and first three quarters of fiscal 2024, a gain on pension obligations of $1.5 million (~~net of income taxes of $0.5 million~~continued) was recognized in Accumulated other comprehensive (loss) income related to this remeasurement. Additionally, in the third quarter and first three quarters of fiscal 2024, $0.7 million of deferred losses on pension obligations (net of income taxes of $0.2 million) were reclassified from Accumulated other comprehensive loss to Pension plan settlement within the condensed consolidated statement of operations related to the partial settlement of the pension plan.

During the first quarter of fiscal 2026, the Company made a lump-sum payment to a third-party insurance provider to assume all remaining premium obligations related to its post-retirement life insurance arrangement. In connection with this settlement, $0.4 million of deferred gains on post-retirement life obligations (net of income taxes of $0.1 million) were reclassified from Accumulated other comprehensive loss to Other expense, net within the condensed consolidated statement of operations. In the first quarter of fiscal 2025, no amounts were reclassified from Accumulated other comprehensive loss to the condensed consolidated statement of operations.

NOTE 10 – FAIR VALUE MEASUREMENTS

Investments

In support of The William Carter Company Deferred Compensation Plan (the “Deferred Compensation Plan”), the Company invests comparable amounts in marketable securities, principally equity-based mutual funds, to approximate the participant’s investment return on employee deferrals of compensation. All of the marketable securities are included in Other assets on the Company’s condensed consolidated balance sheets, and their aggregate fair values were $21.0 million, $19.5 million, and $19.0 million at September 27, 2025, December 28, 2024, and September 28, 2024, respectively. These investments are ~~classified~~held ~~as Level 1 within the fair value hierarchy. The change~~ in ~~the~~an ~~aggregate~~irrevocable ~~fair~~Rabbi ~~values~~Trust ofestablished ~~marketable securities is due~~ to ~~the~~fund ~~net activity of gains and losses and any contributions and distributions during~~ the ~~period.~~Company’s ~~Gains~~obligations onunder the ~~investments~~Deferred inCompensation ~~marketable securities were $1~~Plan.0 ~~million~~The ~~and~~Rabbi ~~$1.5~~Trust ~~million for the third quarter and the first three quarters of fiscal 2025, respectively. Gains on the~~ investments ~~in marketable securities were $0.6 million and $1.7 million for the third quarter and the first three quarters of fiscal 2024, respectively. These amounts~~ are ~~included~~restricted in ~~Other~~their ~~(income)~~use ~~expense,~~to ~~net~~meet onfunding ~~the~~obligations ~~Company’s~~to ~~condensed~~Plan ~~consolidated statement of operations~~participants.

~~During~~In ~~the third quarter of~~ fiscal 2025, the Board ~~of Directors~~ approved the termination of the Deferred Compensation Plan, effective as of September 3020, 2025 ~~(the “Termination Date”)~~. In connection with the ~~termination,~~Deferred ~~all~~Compensation ~~participants~~Plan’s ~~will~~termination, ~~receive~~the aCompany ~~single~~expects ~~lump-sum~~to ~~distribution~~liquidate ofthe ~~their~~Rabbi ~~account~~Trust ~~balances~~investments ~~on a final payment date, expected~~ to ~~occur~~fund in the ~~third~~settlement ~~quarter~~ of ~~fiscal~~the ~~2026.~~related ~~Until~~Deferred ~~the~~Compensation ~~final~~Plan ~~payment date~~obligations, ~~the~~with ~~Plan~~final ~~will~~settlement ~~continue~~expected to ~~operate~~occur in the ~~ordinary~~fourth ~~course.~~quarter ~~This includes maintaining investment allocations and processing scheduled distributions; however, all employee contributions ceased as~~ of ~~the~~fiscal ~~Termination Date~~2026. ~~See Note 13, Employee Benefit Plans for additional information.~~

14All of the marketable securities are included in Prepaid expenses and other current assets on the Company’s condensed consolidated balance sheets as of April 4, 2026 and January 3, 2026, and their aggregate fair values were $22.2 million and $21.7 million, respectively. As of March 29, 2025, the aggregate fair value of the Rabbi Trust investments was $19.8 million and was included in Other assets. The change in classification reflects the Company’s expectation to liquidate the Rabbi Trust investments to fund the settlement of Deferred Compensation Plan obligations in the fourth quarter of fiscal 2026.

~~NOTES~~These TOinvestments ~~CONDENSED~~are ~~CONSOLIDATED~~classified ~~FINANCIAL~~as ~~STATEMENTS~~Level 1 within the fair value hierarchy. The change in the aggregate fair values of marketable securities is due to the net activity of gains and losses and any contributions and distributions during the period. Gains on the investments in marketable securities were $0.5 million and $0.3 million for the first fiscal quarters ended April 4, 2026 and March 29, 2025, respectively. These amounts are included in Other expense (~~continued~~income), net on the Company’s condensed consolidated statement of operations.

Borrowings

As of ~~September~~April 274, ~~2025~~2026, the Company had no outstanding borrowings under its ~~secured~~ABL ~~revolving credit~~ facility.

The fair value of the Company’s senior notes was $~~500~~588.24 million, $~~494~~592.4 9 million, and $~~498~~495.1 6 million at ~~September~~April 274, ~~2025~~2026, ~~December~~January 283, ~~2024~~2026, and ~~September~~March 2829, ~~2024~~2025, respectively. The fair value of these senior notes ~~with a notional value and carrying value (gross of debt issuance costs) of $500.0 million~~ was estimated using aobservable ~~quoted~~market ~~price~~inputs, aswhich ~~provided~~incorporates inquoted ~~the~~market ~~secondary~~prices ~~market,~~of ~~which~~comparable ~~considers~~borrowings, the Company’s credit risk, and current market ~~related~~ conditions, and is therefore within Level 2 of the fair value hierarchy. The senior notes had a notional value and carrying value (gross of debt issuance costs) of $575.0 million, $575.0 million, and $500.0 million as of April 4, 2026, January 3, 2026, and March 29, 2025, respectively.

Goodwill, Intangible ~~Assets~~, and Long-Lived Tangible Assets

Some assets are not measured at fair value on a recurring basis but are subject to fair value adjustments only in certain circumstances. These assets can include goodwill, indefinite-lived intangible assets, and other long-lived ~~tangible~~ assets that have been reduced to fair value when impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

In the fourth quarter of fiscal 2024, the Company recorded a non-cash pre-tax impairment charge of $30.0 million to reduce the carrying value of the indefinite-lived OshKosh tradename asset to $40.0 million. The impairment charge was driven by decreased actual and projected sales and profitability for our OshKosh brand.

During the second quarter of fiscal 2025, the Company identified a triggering event related to the new tariffs enacted by the Trump Administration and the resulting unfavorable impact on the Company’s financial forecasts, as well as a sustained decrease in the Company’s stock price since the last impairment test conducted in the fourth quarter of fiscal 2024. As a result, the Company performed a quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets.

Additionally, during the third quarter of fiscal 2025, the Company identified a triggering event related to the sustained decrease in the Company’s stock price since the last impairment test conducted in the second quarter of fiscal 2025. As a result, the Company performed a quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets.

The goodwill impairment assessments for each reporting unit was performed in accordance with ASC 350 and compares the carrying value of each reporting unit to its fair value. Consistent with prior practice, the Company uses a 50% weighting of the income approach and a 50% weighting of the market approach to determine the fair value of a reporting unit. The assumptions used in these approaches include revenue growth and profitability, terminal growth rates, discount rates, market multiples, and a control premium. Discount rates are dependent upon interest rates and the cost of capital at a point in time. These assumptions are consistent with those we believe hypothetical marketplace participants would use. An impairment is recorded for any excess carrying value above the fair value of the reporting unit, not to exceed the carrying value of goodwill.

Based on these assessments, there were no impairments to the value of our indefinite-lived tradename assets in the second quarter or third quarter of fiscal 2025.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 11 – INCOME TAXES

The Company’s income tax provision and effective tax rates for the fiscal periods indicated were as follows:

	Fiscal quarter ended						~~Three fiscal quarters ended~~
(dollars in thousands)	~~September~~April 274, ~~2025~~2026			~~September~~March 2829, ~~2024~~2025			~~September 27, 2025~~			~~September 28, 2024~~
Income tax provision	$	35,~~241~~520		$	125,~~410~~810		$	~~10,308~~		$	~~31,047~~
Effective income tax rate	2127.8		%	1727.52		%	~~27.2~~		%	~~20.0~~		%

The Company’s effective income tax rate was 21.8% for the third fiscal quarter ended September 27, 2025, compared to 17.5% for the third fiscal quarter ended September 28, 2024. The Company’s effective income tax rate was 27.2% for the first three fiscal quarters ended September 27, 2025, compared to 20.0% for the first three fiscal quarters ended September 28, 2024. The increase in the effective tax rate was driven by lower income before income taxes in period, incremental nondeductible officers’ compensation, and Hong Kong’s implementation of the Pillar Two global minimum tax legislation. This was partially offset by a lower proportion of income generated in the United States, where the tax rate is higher relative to some of our international jurisdictions.12

As of September 27, 2025, the Company had gross unrecognized income tax benefits of $7.9 million, of which $5.6 million, if ultimately recognized, may affect the Company’s effective income tax rate in the periods settled. The Company has recorded tax positions for which the ultimate deductibility is more likely than not, but for which there is uncertainty about the timing of such deductions.

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act of 2025 (“OBBB”), which includes, among other provisions, changes to the U.S. corporate income tax system such as the immediate expensing of qualifying research and development costs and the permanent extension of certain provisions of the Tax Cuts and Jobs Act. Based on the Company’s current evaluation of the legislation, the Company does not expect these tax law changes to have a material impact on the Company’s consolidated financial statements. The Company will continue to assess the potential impacts of OBBB as additional regulatory guidance becomes available.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company’s effective income tax rate was 27.8% for the first fiscal quarter ended April 4, 2026, compared to 27.2% for the first fiscal quarter ended March 29, 2025. The increase in the effective tax rate was primarily driven by incremental tax expense related to the applicability of the global minimum tax in Hong Kong. This was partially offset by lower incremental tax expense associated with the vesting of restricted stock awards compared to the prior period.

As of April 4, 2026, the Company had gross unrecognized income tax benefits of $6.3 million, of which $5.5 million, if ultimately recognized, may affect the Company’s effective income tax rate in the periods settled. The Company has recorded tax positions for which the ultimate deductibility is more likely than not, but for which there is uncertainty about the timing of such deductions.

NOTE 12 – EARNINGS PER SHARE

The following is a reconciliation of basic common shares outstanding to diluted common and common equivalent shares outstanding:


	Fiscal quarter ended
	April 4, 2026		March 29, 2025
Weighted-average number of common and common equivalent shares outstanding:
Basic number of common shares outstanding	35,493,430		35,312,090
Dilutive effect of equity awards	2,545		1,923
Diluted number of common and common equivalent shares outstanding	35,495,975		35,314,013
Earnings per share:
(dollars in thousands, except per share data)
Basic net income per common share:
Net income	$	14,336	$	15,539
Income allocated to participating securities	(393)		(285)
Net income available to common shareholders	$	13,943	$	15,254
Basic net income per common share	$	0.39	$	0.43

Diluted net income per common share:
Net income	$	14,336	$	15,539
Income allocated to participating securities	(393)		(285)
Net income available to common shareholders	$	13,943	$	15,254
Diluted net income per common share	$	0.39	$	0.43

Anti-dilutive awards excluded from diluted earnings per share computation(*)	125,516		389,307

	Fiscal quarter ended				Three fiscal quarters ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Weighted-average number of common and common equivalent shares outstanding:
Basic number of common shares outstanding	35,443,712		35,301,131		35,388,596		35,616,875
Dilutive effect of equity awards	146		619		348		1,325
Diluted number of common and common equivalent shares outstanding	35,443,858		35,301,750		35,388,944		35,618,200
Earnings per share:
(dollars in thousands, except per share data)
Basic net income per common share:
Net income	$	11,593	$	58,320	$	27,578	$	123,992
Income allocated to participating securities	(305)		(1,210)		(1,118)		(2,401)
Net income available to common shareholders	$	11,288	$	57,110	$	26,460	$	121,591
Basic net income per common share	$	0.32	$	1.62	$	0.75	$	3.41
Diluted net income per common share:
Net income	$	11,593	$	58,320	$	27,578	$	123,992
Income allocated to participating securities	(305)		(1,210)		(1,118)		(2,401)
Net income available to common shareholders	$	11,288	$	57,110	$	26,460	$	121,591
Diluted net income per common share	$	0.32	$	1.62	$	0.75	$	3.41
Anti-dilutive awards excluded from diluted earnings per share computation(*)	201,909		408,799		289,835		428,325

(*)The anti-dilutive shares excluded from diluted net income per common share primarily relate to out-of-the-money stock options.

~~(*)The~~NOTE ~~volume~~13 of– ~~anti-dilutive~~ORGANIZATIONAL ~~awards is, in part, due to the related unamortized compensation costs.~~RESTRUCTURING

~~NOTE~~In 13fiscal –2025, ~~EMPLOYEE~~the ~~BENEFIT~~Company ~~PLANS~~initiated an organizational restructuring of its offices-based workforce to right-size its cost structure and improve future profitability. In connection with this restructuring, the Company recorded charges of $9.8 million in Selling, general, and administrative expenses in fiscal 2025, primarily related to severance and other termination benefits.

~~OshKosh~~As ~~B’Gosh~~of ~~Pension~~April 4, ~~Plan~~2026 and January 3, 2026, the Company had an accrual of $1.5 million and $8.8 million, respectively, related to these actions recorded in Other current liabilities on the condensed consolidated balance sheets. The Company expects to pay substantially all of the remaining severance and other termination benefits during the second quarter of fiscal 2026.

InNOTE ~~fiscal~~14 ~~2024,~~– ~~the~~SEGMENT Board of Directors authorized the termination of the pension plan, with an effective date of November 30, 2024, through lump sum distributions and the purchase of annuity contracts. During the third quarter of fiscal 2025, the Company substantially completed the process of settling its pension obligations under the pension plan. In August 2025, the pension plan used existing pension plan assets to purchase non-participating annuity contracts from an insurance company and to make single-sum payments to certain plan participants, thereby settling its existing pension benefit obligations. The Company expects to distribute surplus plan assets to plan participants in fiscal 2026 in accordance with the terms of the plan and regulatory requirements.INFORMATION

~~These~~The ~~settlement transactions had no cash impact on the~~ Company ~~but~~reports ~~did~~segment ~~result~~information inbased upon a ~~non-cash~~“management ~~pre-tax pension settlement charge of $8~~approach.~~8 million~~” inThe ~~the~~management ~~third~~approach ~~quarter~~refers ofto ~~fiscal 2025, recorded within Pension plan settlement on~~ the ~~Company’s~~internal ~~condensed~~reporting ~~consolidated~~that ~~statement~~is ofused ~~operations.~~by ~~The~~management ~~charge~~for ~~reflects~~making ~~the~~operating ~~recognition~~decisions ~~of $5.4 million of deferred losses associated with its pension obligations, which were released from Accumulated other comprehensive income,~~ and aassessing ~~$3.4 million charge related to~~ the ~~recognition~~performance of ~~prior service cost for~~ the ~~surplus~~Company’s ~~plan~~reportable ~~assets to be distributed to plan participants in fiscal 2026~~segments.

~~During~~The ~~the~~Company ~~third~~has ~~quarter~~three ofoperating ~~fiscal~~and ~~2024~~reportable segments: U.S. Retail, ~~the~~U.S. ~~pension~~Wholesale, ~~plan~~and ~~made~~International. ~~lump~~The ~~sum~~U.S. ~~payments~~Retail tosegment ~~certain~~consists ~~participants~~of revenue primarily from sales of products in the United States through our retail stores, ~~thereby~~eCommerce ~~reducing~~websites, ~~its~~and ~~pension~~mobile ~~benefit~~app. ~~obligations~~Similarly, the U.S. ~~The~~Wholesale ~~transaction~~segment ~~had~~consists noof ~~cash~~revenue ~~impact~~primarily onfrom sales in the ~~Company~~United ~~but~~States ~~did~~of ~~result~~products into aour ~~non-cash~~wholesale ~~pre-tax~~partners. ~~partial~~The International segment consists of revenue primarily from sales of products outside

1713

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

~~pension~~the ~~settlement~~United ~~charge~~States, oflargely ~~$0.9 million,~~through ~~which~~our isretail ~~included~~stores and eCommerce websites in ~~Pension~~Canada ~~plan~~and ~~settlement~~Mexico, onand ~~the~~sales to our international wholesale customers and licensees. The Company’s ~~condensed~~sells ~~consolidated~~similar ~~statement~~products in each of ~~operations~~its three segments.

~~Funded~~The ~~Status~~Company’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker evaluates the operating performance of the segments based upon each segment’s net sales and segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses as well as specific charges that are not directly attributable to segment operations, including restructuring costs, operating model improvement costs, leadership transition costs, and impairment charges related to goodwill and indefinite-lived intangible assets. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore total segment assets are not presented.

As a result of the pension plan settlements, the Company remeasured the funded status of its pension plan as of August 31, 2025 and August 31, 2024. Presented below is the reconciliation of changes in the projected benefit obligation and plan assets as a result of this remeasurement and pension plan settlements:

	For the period ended
(dollars in thousands)	August 31, 2025		August 31, 2024
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	43,077	$	54,785
Interest cost	1,519		1,684
Actuarial gain	(1,010)		(2,345)
Benefits paid	(2,059)		(1,981)
Settlements	(41,527)		(6,887)
Amendment to distribute excess assets to participants	3,381		—
Projected benefit obligation at end of period	$	3,381	$	45,256
Change in plan assets:
Fair value of plan assets at beginning of year	$	45,549	$	55,959
Actual return on plan assets	1,418		1,064
Benefits paid	(2,059)		(1,981)
Settlements	(41,527)		(6,887)
Fair value of plan assets at end of period	$	3,381	$	48,155
Funded status	$	—	$	2,899

The accumulated benefit obligation was equal to the projected benefit obligation as of August 31, 2025 and August 31, 2024 because the plan was frozen. The funded status asset is included in Other assets in the Company’s condensed consolidated balance sheets.

Net periodic pension cost of $0.3 million was recognized in the first three quarters of fiscal 2025, exclusive of the $8.8 million non-cash pre-tax pension settlement charge described above.

Assumptions

The discount rate for determining the benefit obligation as of August 31, 2025 and August 31, 2024 was 0.00% and 5.00%, respectively. The assumption for net periodic pension cost in the first three quarters of fiscal 2025 includes a discount rate of 5.50% through August 31, 2025 and 0.00% thereafter. The assumption for net periodic pension cost in the first three quarters of fiscal 2024 includes a discount rate of 4.75% through August 31, 2024 and 5.00% thereafter. The expected rate of return on plan assets in the first three quarters of fiscal 2025 was 5.50% through August 31, 2025 and 0.00% thereafter. The expected rate of return on plan assets in the first three quarters of fiscal 2024 was 4.75% through August 31, 2024 and 5.00% thereafter.

The fair value of plan assets was $3.4 million and $48.2 million as of August 31, 2025 and August 31, 2024, respectively. Plan assets as of August 31, 2024 were invested in fixed income securities, which include funds holding corporate bonds of companies from diverse industries and U.S. Treasuries.

Deferred Compensation Plan

During the third quarter of fiscal 2025, the Board of Directors approved the termination of The William Carter Company Deferred Compensation Plan (the “Plan”), effective as of September 30, 2025 (the “Termination Date”). In connection with the termination, all participants will receive a single lump-sum distribution of their account balances on a final payment date, expected to occur in the third quarter of fiscal 2026. Until the final payment date, the Plan will continue to operate in the ordinary course. This includes maintaining investment allocations and processing scheduled distributions; however, all employee contributions ceased as of the Termination Date.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Plan permitted eligible employees to defer salary and incentive compensation in accordance with the Internal Revenue Code. Participant deferrals earn investment returns based on a select number of investment options, including equity, debt, and real estate mutual funds. Deferred compensation plan liabilities are recognized in Other long term liabilities on the Company’s condensed consolidated balance sheets. Changes in the balance, excluding those related to contributions or payments, are included in Other expense (income), net on the Company’s condensed consolidated statement of operations. The Company invests comparable amounts in marketable securities to approximate the participants’ return on selected investment options.

NOTE 14 – ORGANIZATIONAL RESTRUCTURING

In the third quarter of fiscal 2025, the Company initiated an organizational restructuring of our offices-based workforce to right-size its cost structure and improve future profitability. The Company currently estimates it will incur approximately $10.0 million to $11.0 million in organizational restructuring charges through the end of fiscal 2025 in connection with this initiative.

Substantially all of these charges are related to severance and other termination benefits and are recorded within Selling, general and administrative expenses. Severance and other termination benefits are expected to be paid out primarily in the first two quarters of fiscal 2026, and therefore the accrual is included in Other current liabilities in the Company’s condensed consolidated balance sheets. The activity in the organizational restructuring accrual was as follows:

(dollars in thousands)	Severance and other termination benefits
Balance at June 28, 2025	$	—
Charges	6,117
Cash payments	—
Balance at September 27, 2025	$	6,117

NOTE 15 – SEGMENT INFORMATION

The Company has three operating and reportable segments: U.S. Retail, U.S. Wholesale, and International. The U.S. Retail segment consists of revenue primarily from sales of products in the United States through our retail stores, eCommerce websites, and mobile app. Similarly, the U.S. Wholesale segment consists of revenue primarily from sales in the United States of products to our wholesale partners. The International segment consists of revenue primarily from sales of products outside the United States, largely through our retail stores and eCommerce websites in Canada and Mexico, and sales to our international wholesale customers and licensees. The Company sells similar products in each of its three segments.

The Company’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker evaluates the operating performance of the segments based upon each segment’s net sales and segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses as well as specific charges that are not directly attributable to segment operations, including restructuring costs, operating model improvement costs, leadership transition costs, and impairment charges related to goodwill and indefinite-lived intangible assets.

In fiscal 2024, the Company changed its measure of segment profitability to segment operating income, which excludes the charges mentioned above, and which were included in our previous measure of segment profitability, to better align with management’s assessment of segment performance and to provide better insights into segment performance. Prior period segment operating income for the third quarter and three fiscal quarters ended September 28, 2024 have been recast to conform to the current presentation. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore total segments assets are not presented.

Certain costs, including incentive compensation for certain employees, and various other general corporate costs that are not specifically allocable to segments, are included in unallocated corporate expenses below.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Segment Performance

The ~~table~~tables below ~~presents~~present certain segment information for our reportable segments for the periods indicated:

Fiscal quarter ended September 27, 2025

Fiscal quarter ended April 4, 2026

(dollars in thousands)

U.S. Retail

U.S. Wholesale

International

Total

Net sales

~~362~~332,~~307~~248

~~283~~251,~~805~~406

~~111~~97,~~724~~459

~~757~~681,~~836~~113

Cost of goods sold

~~152~~144,~~721~~533

~~205~~191,~~441~~734

5850,~~046~~973

~~416~~387,~~208~~240

Selling expenses(1)

~~130~~126,~~217~~155

2,~~245~~408

2728,~~930~~148

~~160~~156,~~392~~711

Distribution expenses(2)

2820,~~819~~302

1614,~~681~~404

76,~~370~~188

5240,~~870~~894

Other segment items(3)

4032,~~574~~222

156,~~440~~076

97,~~206~~991

6546,~~220~~288

Segment operating income

9,~~976~~037

4336,~~998~~784

94,~~172~~159

6349,~~146~~980

(1)Selling expenses include the costs of operating our retail stores and eCommerce channels, as well as wholesale sales management costs.

(2)Distribution expenses include payments to third-party shippers and handling costs to process product through our distribution facilities, including eCommerce fulfillment costs, and delivery to our wholesale customers and to our retail stores.

(3)Other segment items include royalty income and overhead costs that are attributable to our reportable segments and include allocated accounting, finance, human resources, and information technology expenses, occupancy costs, and other benefit and compensation programs, including performance-based compensation.

Three fiscal quarters ended September 27, 2025

Fiscal quarter ended March 29, 2025

(dollars in thousands)

U.S. Retail

U.S. Wholesale

International

Total

Net sales

~~956~~294,~~288~~432

~~726~~250,~~899~~096

~~289~~85,~~788~~299

1629,~~972,975~~827

Cost of goods sold

~~389~~120,~~864~~649

~~514~~170,~~117~~608

~~154~~47,~~516~~480

1338,~~058,497~~737

Selling expenses

~~378~~121,~~985~~522

72,~~054~~389

7824,~~411~~254

~~464~~148,~~450~~165

Distribution expenses

6619,~~279~~250

4715,~~092~~227

186,~~508~~116

~~131~~40,~~879~~593

Other segment items

~~105~~30,~~108~~703

326,~~267~~563

257,~~789~~664

~~163~~44,~~164~~930

Segment operating income

16,052

126,369

12,564

154,985

Segment operating income (loss)

2,308

55,309

(215)

57,402

	Fiscal quarter ended September 28, 2024
(dollars in thousands)	U.S. Retail		U.S. Wholesale		International		Total
Net sales	$	352,987	$	298,980	$	106,497	$	758,464
Cost of goods sold	140,708		205,938		55,804		402,450
Selling expenses	125,576		2,035		24,938		152,549
Distribution expenses	26,282		18,142		6,962		51,386
Other segment items	33,112		9,738		8,556		51,406
Segment operating income	$	27,309	$	63,127	$	10,237	$	100,673

	Three fiscal quarters ended September 28, 2024
(dollars in thousands)	U.S. Retail		U.S. Wholesale		International		Total
Net sales	$	950,877	$	756,022	$	277,491	$	1,984,390
Cost of goods sold	371,124		517,681		141,444		1,030,249
Selling expenses	354,843		7,373		75,766		437,982
Distribution expenses	64,640		46,438		17,685		128,763
Other segment items	100,589		21,868		24,615		147,072
Segment operating income	$	59,681	$	162,662	$	17,981	$	240,324

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

	Fiscal quarter ended				Three fiscal quarters ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Total segment operating income	$	63,146	$	100,673	$	154,985	$	240,324
Items not included in segment operating income:
Unallocated corporate expenses(1)	(23,767)		(23,633)		(68,465)		(68,796)
Operating model improvement costs(2)	(3,669)		—		(13,469)		—
Leadership transition costs(3)	(500)		—		(7,694)		—
Organizational restructuring(4)	(6,117)		—		(6,117)		—
Consolidated operating income	$	29,093	$	77,040	$	59,240	$	171,528
Interest expense	7,173		7,381		22,849		23,156
Interest income	(2,573)		(2,370)		(10,007)		(8,644)
Other expense (income), net(5)	882		350		(265)		1,028
Pension plan settlement(5)	8,777		949		8,777		949
Income before income taxes	$	14,834	$	70,730	$	37,886	$	155,039

The table below presents a reconciliation of reportable segment operating income to Income before income taxes:


	Fiscal quarter ended
	April 4, 2026		March 29, 2025
Total segment operating income	$	49,980	$	57,402
Items not included in segment operating income:
Unallocated corporate expenses(1)	(21,537)		(22,012)
Leadership transition costs(2)	—		(6,126)
Operating model improvement costs(3)	—		(3,162)

Consolidated operating income	28,443		26,102
Interest expense	11,757		7,819
Interest income	(3,256)		(3,142)
Other expense, net	86		76
Income before income taxes	$	19,856	$	21,349

(1)Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our reportable segments and include unallocated accounting, finance, legal, human resources, and information technology expenses, occupancy costs for our corporate headquarters, and other benefit and compensation programs, including performance-based compensation.

(2)~~Primarily~~Related ~~related~~ to ~~third~~costs associated with the transition of the Company’s former CEO, including accelerated vesting of outstanding time-~~party~~based ~~consulting~~restricted ~~costs~~stock awards pursuant to ~~support~~a ~~operating~~retirement ~~model~~agreement ~~improvement~~approved by the Board, executive recruiting costs, and other related costs.

(3)~~Related~~Primarily related to ~~costs associated with the transition of our former CEO, including accelerated vesting of outstanding time~~third-~~based~~party ~~restricted~~consulting ~~stock~~costs ~~awards pursuant~~ to asupport ~~retirement~~operating ~~agreement~~model ~~approved~~improvement ~~by the Board of Directors, executive recruiting~~ costs~~, and other related costs~~.

(4)Related to charges for severance and other termination benefits as a result of organizational restructuring. Refer to Note 14, Organizational Restructuring for more information.

(5)Pension plan settlement charges for the fiscal quarter and three fiscal quarters ended September 28, 2024 have been reclassified to the Pension plan settlement line item. These charges were previously included in Other expense (income), net.

Additional Data by Segment

The tables below present additional information for our reportable segments for the periods presented:

Depreciation and amortization expense


	Fiscal quarter ended
	April 4, 2026		March 29, 2025
U.S. Wholesale	$	1,967	$	2,177
U.S. Retail	8,444		8,300
International	2,734		2,322
Unallocated corporate	480		455
Total	13,625		13,254

	Fiscal quarter ended				Three fiscal quarters ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
U.S. Wholesale	$	2,182	$	2,170	$	6,541	$	6,588
U.S. Retail	8,667		8,883		25,426		26,749
International	2,472		2,836		7,266		8,663
Unallocated corporate	445		538		1,345		1,671
Total	$	13,766	$	14,427	$	40,578	$	43,671

NOTE 15 – COMMITMENTS AND CONTINGENCIES

~~NOTE~~The 16Company –is ~~COMMITMENTS~~subject ~~AND~~to ~~CONTINGENCIES~~various claims and pending or threatened lawsuits in the normal course of business. The Company is not currently a party to any legal proceedings that it believes would have a material adverse effect on its financial position, results of operations, or cash flows.

The Company’s iscontractual ~~subject~~obligations ~~to various claims~~ and ~~pending~~commitments orinclude ~~threatened~~obligations ~~lawsuits~~associated inwith leases, the ~~normal~~secured ~~course~~asset-based ofrevolving ~~business.~~credit ~~The Company is not currently a party to any legal proceedings that it believes would have a material adverse impact on its financial position~~facility, ~~results~~senior ~~of operations~~notes, orand ~~cash~~employee ~~flows~~benefit plans.

~~The~~NOTE ~~Company’s~~16 ~~contractual~~– ~~obligations~~SUBSEQUENT ~~and commitments include obligations associated with leases, the secured revolving credit agreement, senior notes, and employee benefit plans.~~EVENTS

~~ITEM~~On 2May 1, 2026, subsequent to April 4, 2026, the Company announced that the Board approved the appointment of Sharon Price John as Chief Executive Officer & President of the Company and a member of the Board effective June 15, 2026. ~~MANAGEMENT~~ In connection with the appointment of Ms. John, Douglas C. Palladini has departed the Company as Chief Executive Officer & President and resigned as a member of the Board effective April 28, 2026. Effective April 28, 2026, Richard F. Westenberger, the Company’Ss ~~DISCUSSION~~Chief ~~AND~~Financial ~~ANALYSIS~~Officer OF& ~~FINANCIAL~~Chief ~~CONDITION~~Operating ~~AND~~Officer, was appointed as Interim Chief Executive Officer & President. Mr. Westenberger will maintain his existing responsibilities in addition to serving as Interim Chief Executive Officer & President until Ms. John’s start date.

~~RESULTS~~In OFconnection ~~OPERATIONS~~with Ms. John’s appointment, the Company entered into an employment agreement with Ms. John, including certain cash and equity-based compensation arrangements. No amounts related to these events have been recognized in the condensed consolidated financial statements as of and for the fiscal quarter ended April 4, 2026. Additional information regarding these management changes and related arrangements is included in the Company’s Current Report on Form 8-K filed with the SEC on May 1, 2026.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Statements in this Quarterly Report on Form 10-Q 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 (as such term is defined in the Private Securities Litigation Reform Act of 1995). These forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements or views expressed in this Form 10-Q. These risks and uncertainties include, but are not limited to, those disclosed in Part II, Item 1A. “Risk Factors” of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2026 and Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2026, and otherwise in our reports and filings with the Securities and Exchange Commission, as well as the following factors: changes in global economic and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits; risks related to public health crises; risks related to the organizational restructuring plan, including, but not limited to, our ability to achieve the expected savings from the plan and to fully implement the plan; risks related to consumer tastes and preferences, as well as fashion trends; the failure to protect our intellectual property; the diminished value of our brands, potentially as a result of negative publicity or unsuccessful branding and marketing efforts; delays, product recalls, or loss of revenue due to a failure to meet our quality standards; risks related to uncertainty regarding the future of international trade agreements and the United States’ position on international trade, as well as significant political, trade, and regulatory developments and other circumstances beyond our control; the roll-back of incremental tariffs imposed under the International Emergency Economic Powers Act (the “incremental tariffs”) and any additional actions taken in response to their roll-back, including tariffs imposed pursuant to Section 122 of the Trade Act of 1974 (the “122 tariffs”); our ability to recover refunds of incremental tariff amounts or other tariff amounts paid; increased competition in the marketplace; financial difficulties for one or more of our major customers; identification of locations and negotiation of appropriate lease terms for our retail stores; distinct risks facing our eCommerce business; failure to forecast demand for our products and our failure to manage our inventory; increased margin pressures, including increased cost of materials and labor and our inability to successfully increase prices to offset these increased costs; continued inflationary pressures with respect to labor and raw materials and global supply chain constraints that have, and could continue, to affect freight, transit, and other costs; fluctuations in foreign currency exchange rates; unseasonable or extreme weather conditions; risks associated with corporate responsibility issues; our foreign sourcing arrangements; a relatively small number of vendors supply a significant amount of our products; disruptions in our supply chain, including increased transportation and freight costs; our ability to effectively source and manage inventory; problems with our Braselton, Georgia distribution facility; pending and threatened lawsuits; a breach of our information technology systems and the loss of personal data or a failure to implement new information technology systems successfully; unsuccessful expansion into international markets; failure to comply with various laws and regulations; failure to properly manage strategic initiatives; retention of key individuals; acquisition and integration of other brands and businesses; failure to achieve sales growth plans and profitability objectives to support the carrying value of our intangible assets; our continued ability to meet obligations related to our debt; changes in our tax obligations, including additional customs, duties or tariffs; our continued ability to declare and pay a dividend; volatility in the market price of our common stock; and the cost or effort required for our shareholders to bring certain claims or actions against us, as a result of our designation of the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings. Except for any ongoing obligations to disclose material information as required by federal securities laws, 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. The inclusion of any statement in this Quarterly Report on Form 10-Q does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

to differ materially from any forward-looking statements or views expressed in this Form 10-Q. These risks and uncertainties include, but are not limited to, those disclosed in Part II, Item 1A. “Risk Factors” of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2025 and Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024, and otherwise in our reports and filings with the Securities and Exchange Commission, as well as the following factors: changes in global economic and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits; risks related to public health crises; risks related to the organizational restructuring plan, including, but not limited to, our ability to achieve the expected savings from the plan and to fully implement the plan; risks related to consumer tastes and preferences, as well as fashion trends; the failure to protect our intellectual property; the diminished value of our brands, potentially as a result of negative publicity or unsuccessful branding and marketing efforts; delays, product recalls, or loss of revenue due to a failure to meet our quality standards; risks related to uncertainty regarding the future of international trade agreements and the United States’ position on international trade, as well as significant political, trade, and regulatory developments and other circumstances beyond our control; increased competition in the marketplace; financial difficulties for one or more of our major customers; identification of locations and negotiation of appropriate lease terms for our retail stores; distinct risks facing our eCommerce business; failure to forecast demand for our products and our failure to manage our inventory; increased margin pressures, including increased cost of materials and labor and our inability to successfully increase prices to offset these increased costs; continued inflationary pressures with respect to labor and raw materials and global supply chain constraints that have, and could continue, to affect freight, transit, and other costs; fluctuations in foreign currency exchange rates; unseasonable or extreme weather conditions; risks associated with corporate responsibility issues; our foreign sourcing arrangements; a relatively small number of vendors supply a significant amount of our products; disruptions in our supply chain, including increased transportation and freight costs; our ability to effectively source and manage inventory; problems with our Braselton, Georgia distribution facility; pending and threatened lawsuits; a breach of our information technology systems and the loss of personal data or a failure to implement new information technology systems successfully; unsuccessful expansion into international markets; failure to comply with various laws and regulations; failure to properly manage strategic initiatives; retention of key individuals; acquisition and integration of other brands and businesses; failure to achieve sales growth plans and profitability objectives to support the carrying value of our intangible assets; our continued ability to meet obligations related to our debt; our ability to close our new asset based lending facility within the timeframe we previously disclosed; changes in our tax obligations, including additional customs, duties or tariffs; our continued ability to declare and pay a dividend; volatility in the market price of our common stock; and the cost or effort required for our shareholders to bring certain claims or actions against us, as a result of our designation of the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings. Except for any ongoing obligations to disclose material information as required by federal securities laws, 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. The inclusion of any statement in this Quarterly Report on Form 10-Q does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

OVERVIEW

We are North America’s largest and most-enduring apparel company exclusively for babies and young children. Our core brands are Carter’s and OshKosh B’gosh (or “OshKosh”), iconic and among the sector’s most trusted names. Our exclusive Carter’s brands, which consist of Child of Mine, Just One You, and Simple Joys, are developed for Walmart, Target, and Amazon. Our emerging brands include Little Planet, crafted with organic fabrics and sustainable materials, Otter Avenue, a toddler-focused apparel brand, and Skip Hop, baby essentials from tubs to toys.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

Established in 1865, our Carter’s brand is recognized and trusted by consumers for high-quality apparel and accessories for children in sizes newborn to 14.

Established in 1895, OshKosh is a well-known brand, trusted by consumers for high-quality apparel and accessories for children in sizes newborn to 14, with a focus on playclothes for toddlers and young children. We acquired OshKosh in 2005.

Established in 2003, the Skip Hop brand rethinks, reenergizes, and reimagines durable necessities to create higher value, superior quality, and award-winning products for parents, babies, and toddlers. We acquired Skip Hop in 2017.

Launched in 2021, the Little Planet brand focuses on sustainable clothing through the sourcing of mostly organic cotton as certified under the Global Organic Textile Standard (“GOTS”), a global textile processing standard for organic fibers. This brand includes a wide assortment of baby and toddler apparel, accessories, and sleepwear.

22Launched in 2025, Otter Avenue is a toddler brand that focuses on functionality designed to encourage independence, while combining fun, sophistication, and fashion-forward styles. This brand includes a curated assortment of toddler apparel and accessories.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Launched in July 2025, Otter Avenue is a toddler brand that focuses on functionality designed to encourage independence, while combining fun, sophistication, and fashion-forward styles. This brand includes a curated assortment of toddler apparel and accessories.

Additionally, Child of Mine, an exclusive Carter’s brand, is sold at Walmart, Just One You, an exclusive Carter’s brand, is sold at Target, and Simple Joys, an exclusive Carter’s brand, is available on Amazon.

Our purpose is to embrace the wonder of childhood and uplift those shaping the future. We believe our brands are complementary to one another in product offering and aesthetic. Each brand is uniquely positioned in the marketplace and offers great value to families with young children. Our multichannel, global business model, which includes retail stores, eCommerce, mobile app, and wholesale distribution channels, as well as omni-channel capabilities in the United States and Canada, enables us to reach a broad range of consumers around the world. As of September 27, 2025, our channels included 1,065 company-operated retail stores in North America, eCommerce websites, approximately 19,500 wholesale locations in North America, as well as our international wholesale accounts and licensees who operate in over 1,100 locations outside of North America in over 90 countries.

~~The~~As ~~following~~of isApril 4, a2026, ~~discussion of~~ our ~~results~~channels ofincluded ~~operations~~1,062 ~~and~~company-operated ~~current~~retail ~~financial~~stores ~~condition. This should be read~~ in ~~conjunction~~North ~~with~~America, ~~the~~eCommerce ~~unaudited~~websites, ~~condensed~~approximately ~~consolidated~~19,500 ~~financial~~wholesale ~~statements~~locations ~~and related notes included~~ in ~~this~~North ~~Form~~America, ~~10-Q~~as ~~and~~well ~~audited~~as ~~consolidated~~our ~~financial~~international ~~statements~~wholesale accounts and ~~related~~licensees ~~notes~~who ~~included~~operate in ~~our~~over ~~Annual~~1,100 ~~Report~~locations onoutside ~~Form~~of ~~10-K~~North ~~for~~America ~~the~~in ~~2024~~over ~~fiscal~~90 ~~year ended December 28, 2024~~countries.

The following is a discussion of our results of operations and current financial condition. This should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this Form 10-Q and audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the 2025 fiscal year ended January 3, 2026.

Fiscal Periods

Segments

We have three operating and reportable segments: U.S. Retail, U.S. Wholesale, and International. Our U.S. Retail segment consists of revenue primarily from sales of products in the United States through our retail stores, eCommerce websites, and mobile app. ~~Similarly,~~Our ~~our~~ U.S. Wholesale segment consists of revenue primarily from sales in the United States of products to our wholesale customers. Our International segment consists of revenue primarily from sales of products outside the United States, largely through our retail stores and eCommerce websites in Canada and Mexico, and sales to our international wholesale customers and licensees. The Company sells similar products in each of its three segments.

In fiscal 2024, the Company changed its measure of segment profitability to segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative (“SG&A”) expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses as well as specific charges that are not directly attributable to segment operations, including restructuring costs, operating model improvement costs, leadership transition costs, and impairment charges related to goodwill and indefinite-lived intangible assets, which were included in our previous measure of segment profitability. This change has no impact on our consolidated operating income. Management believes this updated presentation more accurately reflects how the business is managed and provides better insight into segment performance. Prior period segment operating income for the fiscal quarter and three fiscal quarters ended September 28, 2024 have been recast to conform to the current presentation.17

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

The Company’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker evaluates the operating performance of the segments based upon each segment’s net sales and segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses as well as specific charges that are not directly attributable to segment operations, including operating model improvement costs, restructuring costs, leadership transition costs, and impairment charges related to goodwill and indefinite-lived intangible assets.

Gross Profit and Gross Margin

Gross profit isrepresents ~~calculated as~~ consolidated net sales less cost of goods sold. Gross margin is calculated as gross profit divided by consolidated net sales. Cost of goods sold includes the cost of products, as well as changes in inventory reserves and expenses related to the merchandising, design, and procurement of product, including inbound freight costs, purchasing, and receiving costs, and inspection costs. ~~Also~~Costs ~~included in costs~~ of goods sold ~~are~~also includes the costs of shipping eCommerce ~~product~~orders directly to end consumers. ~~Retail~~For ~~store~~omni-channel ~~occupancy costs~~transactions, ~~distribution~~Costs ~~expenses, and generally all other expenses other than interest and income taxes are included in SG&A expenses. Distribution expenses that are included in SG&A primarily consist~~ of ~~payments~~goods tosold ~~third-party~~includes ~~shippers~~the ~~and handling~~ costs toof ~~process~~shipping product ~~through our distribution facilities, including eCommerce fulfillment costs, and delivery~~ to ~~our~~end ~~wholesale~~consumers ~~customers~~or ~~and~~ to ~~our~~ retail stores. Our gross profit and gross margin may not be comparable to other entities that define their metrics differently.

Retail store occupancy costs, distribution expenses, and generally all other expenses other than interest and income taxes are included in Selling, general, and administrative (“SG&A”) expenses. Distribution expenses included in SG&A primarily consist of payments to third-party shippers and handling costs to process product through the Company’s distribution facilities, including eCommerce fulfillment costs, and delivery of product to wholesale customers and to our retail stores.

Comparable Sales Metrics

We present comparable sales metrics because we consider them an important supplemental measure of our U.S. Retail and International performance, and the Company uses such information to assess the performance of the U.S. Retail and International segments. Additionally, we believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of our business.

23Our comparable sales metrics include sales for all stores and eCommerce sites that were open and operated by us during the comparable fiscal period, including stand-alone format stores that converted to multi-branded format stores and certain remodeled or relocated stores. A store or site becomes comparable following 13 consecutive full fiscal months of operations. If a store relocates within the same center with no business interruption or material change in square footage, the sales of such store will continue to be included in the comparable store metrics. If a store relocates to another center more than five miles away, or there is a material change in square footage, such store is treated as a new store. Stores that are closed during the relevant fiscal period are included in the comparable store sales metrics up to the last full fiscal month of operations. In fiscal years that include a 53rd week, we adjust the prior year comparable period to include a 53rd week so comparable sales reflect an equivalent number of weeks in each period.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

International segments. Additionally, we believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of our business.

Our comparable sales metrics include sales for all stores and eCommerce sites, including the mobile app, that were open and operated by us during the comparable fiscal period, including stand-alone format stores that converted to multi-branded format stores and certain remodeled or relocated stores. A store or site becomes comparable following 13 consecutive full fiscal months of operations. If a store relocates within the same center with no business interruption or material change in square footage, the sales of such store will continue to be included in the comparable store metrics. If a store relocates to another center more than five miles away, or there is a material change in square footage, such store is treated as a new store. Stores that are closed during the relevant fiscal period are included in the comparable store sales metrics up to the last full fiscal month of operations.

The method of calculating sales metrics varies across the retail industry. As a result, our comparable sales metrics may not be comparable to those of other retailers.

Recent Developments

~~Organizational~~Executive ~~Restructuring~~Leadership Transition

InOn May 1, 2026, subsequent to April 4, 2026, the ~~third~~Company ~~quarter~~announced that the Board of ~~fiscal~~Directors ~~2025~~(the “Board”) approved the appointment of Sharon Price John as Chief Executive Officer & President of the Company and a member of the Board effective June 15, we2026. ~~initiated~~In anconnection ~~organizational~~with ~~restructuring~~the appointment of ~~our~~Ms. ~~offices-based~~John, ~~workforce~~Douglas toC. ~~right-size~~Palladini ~~our~~has ~~cost~~departed ~~structure~~the Company as Chief Executive Officer & President and ~~improve~~resigned ~~future~~as ~~profitability~~a member of the Board effective April 28, 2026. ~~The~~Effective ~~plan~~April is28, ~~expected~~2026, Richard F. Westenberger, the Company’s Chief Financial Officer & Chief Operating Officer, was appointed as Interim Chief Executive Officer & President. Mr. Westenberger will maintain his existing responsibilities in addition to ~~reduce~~serving ~~offices-based~~as ~~roles~~interim byChief ~~approximately~~Executive ~~15%~~Officer & President until Ms. John’s start date. Additional information regarding these management changes and torelated ~~generate~~arrangements ~~approximately~~is ~~$35 million~~included in ~~annual~~the ~~savings~~Company’s ~~beginning~~Current inReport ~~fiscal~~on ~~2026~~Form ~~primarily~~8-K ~~related~~filed towith ~~reduced~~the ~~compensation~~SEC ~~and~~on ~~employee~~May ~~benefit~~1, ~~costs~~2026.

As a result, we recorded $6.1 million in severance and other termination benefits during the third quarter of fiscal 2025. We expect to record an additional $4.0 million to $5.0 million in severance and other termination benefits in the fourth quarter of fiscal 2025. We expect to pay substantially all of these costs in the first two quarters of fiscal 2026. Refer to Note 14, Organizational Restructuring in the condensed consolidated financial statements for additional information.

Operating Model Improvement

Throughout the second half of fiscal 2024 and continuing into fiscal 2025, with the assistance of external industry experts, we conducted a comprehensive assessment of our business with the goal of identifying long-term growth opportunities and to scope the strategies and investments needed to realize them in the coming years.

This review highlighted many strengths, including our brand assets, significant awareness and equity with consumers, and the unique reach of our multi-channel business model. It also identified several opportunities to improve the focus and appeal of our product offerings, enabling us to capture new customer segments and market share going forward.

Based on learnings from the review, we are pursuing enhancements to our operating model, which include improving our product and brand development processes to be faster, nimbler, and more responsive to changing consumer preferences. We believe this operating model work is very foundational to improving our capabilities and will better position us for future growth.

Operating model improvement costs, primarily related to third-party consulting fees, were $3.7 million and $13.5 million for the fiscal quarter and three fiscal quarters ended September 27, 2025, respectively. These costs were included in SG&A expenses in our condensed consolidated statement of operations. We anticipate incurring additional costs of approximately $1 million to $2 million for the remainder of fiscal 2025.

Dividend Update

In each of the second and third quarters of fiscal 2025, the Board of Directors declared, and the Company paid, a cash dividend per common share of $0.25, which represented a 69% reduction when compared to the cash dividend per common share paid of $0.80 in the first quarter of fiscal 2025. The action was taken to realign our dividend with our current level of profitability, especially against the backdrop of a challenging market environment and the significantly higher product costs the Company will incur as the result of the incremental tariffs on products imported into the United States.

Leadership Transition

On March 26, 2025, the Company announced the appointment of Douglas C. Palladini as Chief Executive Officer and President and a member of the Board of Directors, effective April 3, 2025. Mr. Palladini brings extensive leadership and brand-building

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

experience to the role and succeeded Richard F. Westenberger, then serving as Interim Chief Executive Officer. Mr. Westenberger continues to serve as our Chief Financial Officer & Chief Operating Officer.

Known or Anticipated Trends

Trade Policy

~~Following~~During ~~its~~the ~~inauguration~~first inquarter ~~January~~of ~~2025~~fiscal 2026, the ~~second~~U.S. ~~Trump~~Supreme ~~Administration~~Court ~~has~~ruled ~~made~~that ~~numerous announcements and taken action to increase~~ tariffs ~~assessed~~imposed onunder ~~products imported into~~ the ~~United~~International ~~States,~~Emergency ~~which~~Economic ~~introduced~~Powers ~~heightened~~Act ~~uncertainty~~(“IEEPA”) ~~across~~were ~~the global economy~~unlawful. ~~Given~~Subsequent ~~that~~to ~~we source all of our apparel and other products from a global network of third-party suppliers—primarily located in Asia—any new or increased tariffs~~April 4, ~~quotas~~2026, ~~embargoes,~~following ~~or other trade barriers have~~ the ~~potential~~April ~~to adversely affect our supply chain~~20, ~~cost~~2026 ~~structure,~~launch ~~margins,~~of ~~and competitiveness~~U.S. ~~Additionally,~~Customs ~~retaliatory actions taken by impacted countries could further disrupt global trade~~ and ~~create~~Border ~~additional~~Protection’s ~~inflationary~~Consolidated ~~pressures~~Administration ~~in raw materials~~ and ~~logistics.~~Processing Weof ~~estimate~~Entries ~~that~~(“CAPE”) ~~Vietnam~~process, ~~Cambodia,~~the ~~Bangladesh,~~Company ~~and~~submitted ~~India~~claims ~~will~~seeking ~~collectively represent~~ approximately ~~75%,~~$130 million ~~and China less than 3%,~~ of ~~our~~refunds ~~product sourcing spend in fiscal 2025. In fiscal 2024, 60%~~ of ~~the~~previously ~~fabric~~paid ~~used~~IEEPA intariffs ~~the~~through ~~manufacture of our products was sourced from China; however,~~ the ~~fibers~~CAPE ~~used to produce that fabric were sourced from outside of China~~system.

While these recently announced tariffs did not have a material impact on the Company’s financial results during the first three quarters of fiscal 2025, we expect incremental tariffs related to imports from Vietnam, Cambodia, Bangladesh, India, and other countries to have a net unfavorable impact to our pre-tax income of approximately $25 million to $35 million in the fourth quarter of fiscal 2025. On an annualized basis, the Company estimates gross incremental costs of approximately $200 million to $250 million related to these incremental tariffs. While the Company expects pressure on gross margin in fiscal 2026, the Company is pursuing actions to mitigate the impact, which include, but are not limited to, changes to our product assortments, cost sharing with our vendor partners, changes to the mix of production by country, and raising prices to end consumers and our wholesale customers. These actions that we take may not fully offset the impact of tariffs and, as a result, our revenues, gross margins, and overall financial performance may be materially harmed.18

Refer to the risk factor under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and the risk factors disclosed under the heading, “Risk Factors” in our most recently filed Annual Report on Form 10-K for further information on risks related to the uncertainty of future global trade relations.

Business Strategies and Outlook

Notwithstanding the factors described above, we remain focused on returning to consistent, profitable growth, recapturing market share, and creating long‑term shareholder value through initiatives designed to (i) stabilize business performance, (ii) increase near‑term productivity, and (iii) invest to enable long‑term growth.

Stabilize Business Performance

We have prioritized stabilizing business performance in response to recent market challenges, including declining birth rates, inflationary pressures, evolving consumer preferences and the imposition of incremental tariffs. Initiatives to stabilize our business performance include revisions to our product assortments, investing in marketing to drive demand, implementing pricing strategies to reinforce our value proposition for consumers, and pursuing actions to mitigate the impact of incremental tariffs, which include, but are not limited to, changes to our product assortments, cost sharing with our vendor partners, changes to the mix of production by country, and raising prices to end consumers and our wholesale customers. We are already seeing improved trends in U.S. Retail as a result of these initiatives, achieving two consecutive quarters of positive comparable net sales, a second consecutive quarter of year-over-year growth in customer count, and continued strength in our core baby assortment.

Increase Near-Term Productivity

In order to position the Company for consistent profitable growth, we have implemented a comprehensive productivity agenda that includes the following:

•Store portfolio optimization - We have identified opportunities to rationalize our store portfolio by closing approximately 150 low-margin stores primarily at lease expiration in North America during fiscal years 2025 through 2028. We currently expect to close approximately 100 stores across fiscal 2025 and fiscal 2026. The 150 stores collectively represent approximately $110 million in annual net sales. We expect these actions, assuming anticipated sales transfer to nearby company-operated stores and our eCommerce channel and the elimination of fixed store expenses, to favorably impact our profitability. Additionally, we are suspending new store openings in the U.S. under our current store model. These actions allow us to focus on improving the productivity of our existing retail store fleet and to advance our fleet segmentation strategy to create more differentiated consumer experiences.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

~~•Organizational~~The ~~restructuring~~Company -has Inelected ~~the~~to ~~third~~apply ~~quarter~~a ofgain ~~fiscal~~contingency ~~2025~~model in accordance with ASC 450-30, we“Gain ~~initiated~~Contingencies” anto ~~organizational~~account ~~restructuring~~for potential recoveries of ~~our~~previously ~~offices-based~~paid ~~workforce~~IEEPA totariffs. ~~right-size~~Under ~~our~~this ~~cost~~model, ~~structure~~a ~~and~~gain ~~improve~~contingency ~~future~~is ~~profitability.~~not ~~The~~recognized ~~plan~~in the financial statements until the gain is ~~expected~~realized toor ~~reduce~~realizable. ~~offices-based~~Any ~~roles~~recovery, bywhen ~~approximately~~recognized, ~~15%~~would bybe ~~the~~reflected ~~end~~as a reduction of inventory to the ~~second~~extent ~~quarter~~the ofrelated ~~fiscal~~goods ~~2026~~remain ~~and~~on tohand, ~~generate~~or ~~approximately~~as ~~$35 million~~a inreduction ~~annual~~of ~~savings~~Cost ~~beginning~~of ingoods ~~fiscal~~sold ~~2026~~for amounts related to goods already sold.

~~•Reduction~~As inof ~~discretionary~~April 4, ~~spending~~2026, -the WeCompany ~~are~~had ~~targeting~~not ~~approximately~~received ~~$10 million~~any refund payments, and uncertainty remained regarding the timing, amount, and ultimate receipt of ~~reductions~~any refunds. Accordingly, no gain has been recognized in ~~discretionary~~the ~~spending,~~condensed ~~deferring~~consolidated ~~non-critical~~financial ~~expenditures~~statements ~~where~~for ~~possible~~the fiscal quarter ended April 4, 2026.

~~•Process~~First ~~efficiency~~Fiscal -Quarter ~~Our~~2026 ~~operating~~Financial model improvement initiative has shortened our product development calendar by approximately three months, improved responsiveness to changing consumer and market trends, and reduced assortment over-development. In addition, we are rationalizing our product choices by approximately 20-30% to create a more unified, global product assortment across all of our brands.Highlights

~~Invest~~Unless otherwise stated, comparisons are to ~~Enable~~the ~~Long-term~~first ~~Growth~~quarter of fiscal 2025:

We•Consolidated ~~are~~net ~~investing~~sales inincreased ~~foundational~~$51.3 ~~investments~~million, toor ~~drive~~8.1%, ~~long-term~~to ~~growth:~~$681.1 million.

~~•Marketing~~◦U.S. Retail sales increased $37.8 million driven by higher unit volume and ~~demand~~average ~~creation~~unit -retail We(“AUR”) ~~are~~in ~~increasing~~both ~~marketing~~retail ~~spend~~stores toand ~~drive~~eCommerce ~~traffic~~channels. Comparable net sales, including retail stores and ~~strengthen~~eCommerce, ~~consumer~~increased ~~loyalty~~10.5% for the period, ~~while~~reflecting ~~continuously~~a ~~measuring~~fourth ~~our~~consecutive ~~return~~quarter onof ~~these~~positive ~~investments~~comparable net sales growth.

~~•Store format testing - Although we are pausing further expansion of our current~~ ◦U.S. ~~store~~Wholesale ~~model,~~sales weincreased ~~plan~~$1.3 tomillion, ~~invest~~driven inby ~~new~~increased ~~store-type~~sales ~~testing,~~of ~~in-store~~our ~~experiences,~~exclusive ~~and~~Carter’s ~~real~~brands, ~~estate~~primarily ~~strategy~~offset ~~development~~by aslower wedemand ~~seek greater productivity~~ from ~~our~~department ~~retail store fleet~~stores.

~~•Infrastructure~~◦International ~~and~~sales ~~Technology~~increased -$12.2 Wemillion, ~~continue~~driven toby ~~invest~~growth in ~~modernizing~~Mexico ~~our distribution network~~ and ~~enhancing technology capabilities. These initiatives include upgrading equipment and systems~~Canada, ~~digitizing~~as ~~aspects~~well ofas ~~our~~favorable ~~product~~changes ~~design~~in ~~and~~foreign ~~development~~currency ~~process,~~exchange ~~migrating~~rates ~~certain~~used ~~applications~~for ~~to cloud-based platforms, and consolidating systems and platforms~~translation.

~~Third~~•Consolidated ~~Fiscal~~gross ~~Quarter~~profit ~~2025~~increased ~~Financial~~$2.8 ~~Highlights~~million, or 1.0%, to $293.9 million, driven by increased net sales, which were primarily offset by increased product costs. Consolidated gross margin decreased 310 bps to 43.1%, primarily due to higher average unit cost (“AUC”) driven by incremental tariff-related costs, partially offset by higher AUR.

~~Unless~~•Consolidated ~~otherwise~~SG&A ~~stated~~expenses decreased $0.3 million, ~~comparisons~~or ~~are~~0.1%, to $270.0 million. SG&A as a percentage of consolidated net sales (“SG&A rate”) decreased 330 bps to 39.6%, driven by fixed cost leverage on higher net sales and costs related to leadership transition and operating model improvements in the ~~third~~first quarter of fiscal ~~2024:~~2025 that did not reoccur in the first quarter of fiscal 2026.

•Consolidated ~~net~~operating ~~sales~~income ~~decreased~~increased $2.3 million, or 9.0%, to $28.4 million and adjusted operating income, a non-GAAP financial measure, decreased $6 .9 million, or 019.16%, to $~~757~~28.8 4 million. Operating margin increased 10 bps to 4.2%, primarily due to the factors discussed in detail below.

~~◦U.S.~~•Consolidated ~~Retail~~net ~~sales~~income ~~increased~~decreased $91.3 2 million, ~~driven~~or by7.7%, ~~higher~~to ~~average~~$14.3 ~~selling~~million ~~prices~~driven ~~per~~by ~~unit.~~the ~~U.S.~~factors ~~Retail~~we ~~comparable~~discuss ~~net~~in ~~sales~~detail ~~increased 2.0%~~below, aincluding ~~second~~an ~~consecutive~~increase ~~quarter~~in ofinterest ~~positive~~expense ~~comparable~~of ~~net~~$3.9 ~~sales~~million.

~~◦U.S.~~•Diluted ~~Wholesale~~net ~~sales~~income per common share decreased $150.~~2 million~~04, ~~driven~~or ~~largely~~9.3%, byto ~~lower~~$0.39, ~~sales~~and ofadjusted ~~our~~diluted ~~Simple~~net ~~Joys~~income ~~brand~~per common share decreased $0.27, or 40.9%, to $0.39.

~~◦International~~•During ~~sales~~the ~~increased~~first ~~$5.2 million,~~quarter ~~primarily~~of ~~driven~~fiscal by2026, ~~growth~~we inopened ~~Mexico~~3 stores and ~~higher~~closed ~~average~~9 ~~selling~~stores ~~prices~~in ~~per~~the ~~unit~~United States.

•~~Consolidated~~As ~~gross~~a ~~profit~~result ~~decreased~~of ~~$14.4~~our ~~million,~~strong orfinancial ~~4.0%,~~position toand ~~$341.6~~available ~~million~~liquidity, ~~and~~we ~~consolidated~~returned ~~gross margin decreased 180 basis points (“bps”) to 45~~$9.~~1%,~~2 ~~primarily~~million ~~due~~ to ~~higher~~our ~~average~~shareholders ~~cost per unit sold driven by incremental tariffs and investments~~ in ~~product~~cash ~~make~~dividends.

•Consolidated SG&A expenses increased $33.2 million, or 11.7%, to $318.0 million. SG&A as a percentage of consolidated net sales (“SG&A rate”) increased 450 bps to 42.0%, driven by factors that include costs related to organizational restructuring, operating model improvements and leadership transition, investments in new and remodeled retail stores, and increased performance-based compensation.19

•Consolidated operating income decreased $47.9 million, or 62.2%, to $29.1 million and adjusted consolidated operating income, a non-GAAP financial measure, decreased $37.7 million, or 48.9%, to $39.4 million. Operating margin decreased 640 bps to 3.8%, and adjusted operating margin decreased 500 bps to 5.2%, driven by the factors discussed in detail below.

•Consolidated net income decreased $46.7 million, or 80.1%, to $11.6 million, driven by the factors discussed in detail below, including a pre-tax, non-cash pension settlement charge of $8.8 million.

•Diluted net income per common share decreased $1.30, or 80.2%, to $0.32, and adjusted diluted net income per common share decreased $0.90, or 54.9%, to $0.74.

•During the first three quarters of fiscal 2025, we opened 19 stores and closed 15 stores in the United States.

•As a result of our strong financial position and available liquidity, we returned $9.1 million in cash dividends to our shareholders in the third quarter of fiscal 2025.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

RESULTS OF OPERATIONS

~~THIRD~~FIRST FISCAL QUARTER ENDED ~~SEPTEMBER~~APRIL 274, ~~2025~~2026 COMPARED TO ~~THIRD~~FIRST FISCAL QUARTER ENDED ~~SEPTEMBER~~MARCH 2829, ~~2024~~2025

The following table summarizes our results of operations.

	Fiscal quarter ended
(dollars in thousands, except per share data)	~~September~~April 274, ~~2025~~2026			~~September~~March 2829, ~~2024~~2025			$ Change		% / bps Change
Consolidated net sales	$	~~757~~681,~~836~~113		$	~~758~~629,~~464~~827		$	~~(628)~~51,286	(08.1)	%
Cost of goods sold	~~416~~387,~~208~~240			~~402~~338,~~450~~737			1348,~~758~~503		314.43	%
Gross profit	~~341~~293,~~628~~873			~~356~~291,~~014~~090			~~(14~~2,~~386)~~783		(41.0)	%
Gross profit as % of consolidated net sales	4543.1		%	46.92		%			(~~180~~310) bps
Royalty income, net	54,~~428~~619			5,~~740~~332			(~~312~~713)		(513.4)	%
Royalty income as % of consolidated net sales	0.7		%	0.8		%			(10) bps
Selling, general, and administrative expenses	~~317~~270,~~963~~049			~~284~~270,~~714~~320			~~33,249~~(271)		11(0.71)	%
SG&A expenses as % of consolidated net sales	4239.06		%	3742.59		%			~~450~~(330) bps
Operating income	2928,~~093~~443			7726,~~040~~102			~~(47~~2,~~947)~~341		~~(62~~9.2)0	%
Operating income as % of consolidated net sales	34.82		%	104.21		%			~~(640)~~10 bps
Interest expense	711,~~173~~757			7,~~381~~819			~~(208)~~3,938		(250.8)4	%
Interest income	(23,~~573~~256)			(23,~~370~~142)			~~203~~114		83.6	%
Other expense (income), net(1)	882			350			532		nm
Other expense, net	86			76			10		13.2	%
Pension plan settlement(1)	8,777			949			7,828		nm
Income before income taxes	19,856			21,349			(1,493)		(7.0)	%
Income before income taxes	14,834			70,730			(55,896)		(79.0)	%
Income tax provision	5,520			5,810			(290)		(5.0)	%
Income tax provision	3,241			12,410			(9,169)		(73.9)	%
Effective tax rate(*)	27.8		%	27.2		%			60 bps
Effective tax rate(2)	21.8		%	17.5		%			430 bps
Net income	$	14,336		$	15,539		$	(1,203)	(7.7)	%
Net income	$	11,593		$	58,320		$	(46,727)	(80.1)	%
Basic net income per common share	$	0.39		$	0.43		$	(0.04)	(9.3)	%
Basic net income per common share	$	0.32		$	1.62		$	(1.30)	(80.2)	%
Diluted net income per common share	$	0.39		$	0.43		$	(0.04)	(9.3)	%
Diluted net income per common share	$	0.32		$	1.62		$	(1.30)	(80.2)	%
Dividend declared and paid per common share	$	0.25		$	0.80		$	(0.55)	(68.8)	%

(1*)~~Pension~~Effective ~~plan~~tax ~~settlement~~rate ~~charge~~is ~~for~~calculated ~~the~~by ~~fiscal~~dividing ~~quarter ended September 28, 2024 has been reclassified to~~ the ~~Pension~~provision ~~plan~~for ~~settlement~~income ~~line~~taxes ~~item.~~by ~~This~~income ~~charge~~before ~~was previously included in Other expense (~~income) taxes.

(2)Effective tax rate is calculated by dividing the provision for income taxes by income before income taxes.

Note: Results may not be additive due to rounding. If applicable, percentage changes that are not considered meaningful are denoted with “nm”.

Consolidated Net Sales

Consolidated net sales ~~decreased~~increased $051.63 million, or 08.1%, to $~~757~~681.81 million., ~~The~~driven ~~decrease~~by inincreased net sales ~~was~~in ~~driven~~each byof ~~lower~~our ~~demand~~U.S. inRetail, U.S. Wholesale, ~~offset~~and International segments. AUR increased by ~~growth~~a high-single digit percentage, reflecting higher pricing to mitigate incremental tariff-related costs and the favorable impact of changes in foreign currency exchange rates used for translation. Unit volume increased by a low-single digit percentage driven by growth across our U.S. Retail and International segments, partially offset by unit volume decline in U.S. Wholesale. Changes in foreign currency exchange rates used for translation had a favorable effect on our consolidated net sales of $5.6 million.

Average selling prices per unit increased by a low-single digit percentage and units sold decreased by a low-single digit percentage. Changes in foreign currency exchange rates used for translation had an unfavorable effect on our consolidated net sales of $0.2 million.

Gross Profit and Gross Margin

Consolidated gross profit ~~decreased~~increased $142.48 million, or 41.0%, to $~~341~~293.69 million and consolidated gross margin decreased ~~180~~310 bps to 4543.1%. The ~~decrease~~increase in consolidated gross profit ~~and~~was ~~gross~~driven ~~margin~~by ~~was~~higher ~~primarily~~net ~~due~~sales toand afavorable ~~high-single~~channel ~~digit~~mix. ~~percentage~~The ~~increase~~decrease in ~~average~~consolidated ~~cost~~gross ~~per~~margin ~~unit~~was ~~sold~~ driven by ~~incremental~~higher ~~tariffs~~AUC, ~~and~~partially ~~investments~~offset inby ~~product~~favorable ~~make,~~channel ~~partially~~mix. ~~offset~~AUC increased by ~~higher~~a ~~average~~low-teens ~~selling~~digit ~~prices~~percentage, ~~per~~driven ~~unit~~by incremental tariff-related costs and investments in product make. Incremental ~~tariffs~~tariff-related costs unfavorably impacted ~~product~~Cost ~~costs~~of goods sold by approximately $2050 million.

Selling, General, and Administrative Expenses

Consolidated SG&A expenses ~~increased~~decreased $330.23 million, or 110.71%, to $~~318~~270.0 million and ~~increased~~SG&A asrate adecreased ~~percentage~~330 ~~of consolidated net sales by 450~~ bps to 4239.06%. ~~The~~This ~~increase~~decrease in the SG&A rate was driven by ~~costs~~fixed ~~related~~cost toleverage ~~organizational~~on ~~restructuring~~higher net sales, ~~operating~~as ~~model~~well ~~improvements,~~as ~~and~~costs related to leadership transition, asand ~~well~~operating asmodel ~~continued~~improvements ~~investments~~ in ~~new~~the ~~and~~first ~~remodeled~~quarter ~~retail~~of ~~stores~~fiscal ~~and~~2025 ~~higher~~that ~~performance-based~~did ~~compensation~~not ~~expense~~reoccur ~~and~~in ~~marketing~~the ~~expense~~first quarter of fiscal 2026.

2720

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

Operating Income

Consolidated operating income ~~decreased~~increased $472.93 million, or 629.20%, to $2928.14 million and ~~decreased~~consolidated asoperating amargin ~~percentage~~increased of10 ~~net sales by 640~~ bps to 34.82%, primarily due to the factors previously discussed.

~~Other~~Interest Expense ~~(Income), Net~~

Consolidated ~~other~~interest expense increased $03.59 million, or 50.4%, to $011.98 million, ~~driven~~reflecting bythe ~~unfavorable~~impact ~~changes~~of inthe ~~foreign~~Company’s ~~currency~~fourth ~~exchange~~quarter ~~rates~~of ~~during~~fiscal ~~the~~2025 ~~period~~issuance of $575.0 million principal amount of 7.375% senior notes due 2031 and redemption of $500.0 million principal amount of 5.625% senior notes due 2027.

Pension Plan Settlement

During the third quarter of fiscal 2025 and fiscal 2024, the Company recognized non-cash pension settlement charges of $8.8 million and $0.9 million, respectively, which were related to the settlement of obligations under the frozen OshKosh B’Gosh Pension Plan.

Income Taxes

Consolidated income tax provision decreased $90.23 million, or 735.90%, to $35.25 million, and the effective tax rate increased ~~430~~60 bps to 2127.8%. The increase in the effective tax rate iswas primarily driven by ~~the~~incremental ~~lower~~tax ~~level~~expense ofrelated ~~income~~to ~~before income taxes in~~ the ~~third~~applicability ~~quarter~~ of ~~fiscal 2025, incremental nondeductible officers’ compensation, and Hong Kong’s implementation of~~ the ~~Pillar Two~~ global minimum tax ~~legislation~~in Hong Kong. This was partially offset by a lower ~~proportion~~incremental oftax ~~income~~expense ~~generated~~associated inwith the ~~United~~vesting ~~States, where the tax rate is higher relative to some~~ of ~~our~~restricted ~~international~~stock ~~jurisdictions,~~awards compared to the ~~third~~prior ~~quarter of fiscal 2024~~period.

Net Income

Consolidated net income decreased $461.72 million, or 807.17%, to $1114.63 million, primarily due to the factors previously discussed.

28Results by Segment - First Quarter of Fiscal 2026 compared to First Quarter of Fiscal 2025

The following table summarizes net sales by segment and segment operating income for the first quarter of fiscal 2026 and the first quarter of fiscal 2025:


	Fiscal quarter ended
(dollars in thousands)	April 4, 2026		% of consolidated net sales		March 29, 2025		% of consolidated net sales		$ Change		% Change
Net sales:
U.S. Retail	$	332,248	48.8	%	$	294,432	46.8	%	$	37,816	12.8	%
U.S. Wholesale	251,406		36.9	%	250,096		39.7	%	1,311		0.5	%
International	97,459		14.3	%	85,299		13.5	%	12,160		14.3	%
Consolidated net sales	$	681,113	100.0	%	$	629,827	100.0	%	$	51,286	8.1	%

Segment operating income (loss):			Segment operating margin				Segment operating margin
U.S. Retail	$	9,037	2.7	%	$	2,308	0.8	%	$	6,729	291.6	%
U.S. Wholesale	36,784		14.6	%	55,309		22.1	%	(18,525)		(33.5)	%
International	4,159		4.3	%	(215)		(0.3)	%	4,374		nm
Total segment operating income (loss)	$	49,980	7.3	%	$	57,402	9.1	%	$	(7,422)	(12.9)	%

Items not included in segment operating income:			Consolidated operating margin				Consolidated operating margin
Unallocated corporate expenses(1)	(21,537)		n/a		(22,012)		n/a		(475)		(2.2)	%
Leadership transition costs(2)	—		n/a		(6,126)		n/a		n/a		n/a
Operating model improvement costs(3)	—		n/a		(3,162)		n/a		n/a		n/a

Consolidated operating income	$	28,443	4.2	%	$	26,102	4.1	%	$	2,341	9.0	%

(1)Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our business segments and include unallocated accounting, finance, legal, human resources, and information technology expenses, occupancy costs for our corporate headquarters, and other benefit and compensation programs, including performance-based compensation.

(2)Related to costs associated with the transition of our former CEO, including accelerated vesting of outstanding time-based restricted stock awards pursuant to a retirement agreement approved by the Board, executive recruiting costs, and other related costs. Amounts are reflected within Selling, general, and administrative expenses in our condensed consolidated statement of operations.

(3)Primarily related to third-party consulting costs to support operating model improvements. Amounts are reflected within Selling, general, and administrative expenses in our condensed consolidated statement of operations.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

Results by Segment - Third Quarter of Fiscal 2025 compared to Third Quarter of Fiscal 2024

The following table summarizes net sales by segment and segment operating income for the third quarter of fiscal 2025 and the third quarter of fiscal 2024:

	Fiscal quarter ended
(dollars in thousands)	September 27, 2025		% of consolidated net sales		September 28, 2024		% of consolidated net sales		$ Change		% Change
Net sales:
U.S. Retail	$	362,307	47.8	%	$	352,987	46.5	%	$	9,320	2.6	%
U.S. Wholesale	283,805		37.4	%	298,980		39.5	%	(15,175)		(5.1)	%
International	111,724		14.8	%	106,497		14.0	%	5,227		4.9	%
Consolidated net sales	$	757,836	100.0	%	$	758,464	100.0	%	$	(628)	(0.1)	%
Segment operating income(1):			Segment operating margin				Segment operating margin
U.S. Retail	$	9,976	2.8	%	$	27,309	7.7	%	$	(17,333)	(63.5)	%
U.S. Wholesale	43,998		15.5	%	63,127		21.1	%	(19,129)		(30.3)	%
International	9,172		8.2	%	10,237		9.6	%	(1,065)		(10.4)	%
Total segment operating income	$	63,146	8.3	%	$	100,673	13.3	%	$	(37,527)	(37.3)	%
Items not included in segment operating income:			Consolidated operating margin				Consolidated operating margin
Unallocated corporate expenses	$	(23,767)	n/a		$	(23,633)	n/a		$	134	0.6	%
Operating model improvement costs(2)	(3,669)		n/a		—		n/a		n/a		n/a
Leadership transition costs(3)	(500)		n/a		—		n/a		n/a		n/a
Organizational restructuring(4)	(6,117)		n/a		—		n/a		n/a		n/a
Consolidated operating income	$	29,093	3.8	%	$	77,040	10.2	%	$	(47,947)	(62.2)	%

(1)Segment operating income for the fiscal quarter ended September 28, 2024 has been recast to conform to the current presentation.

(2)Primarily related to third-party consulting costs to support operating model improvements.

(3)Related to costs associated with the transition of our former CEO, including executive recruiting costs, and other related costs.

(4)Related to charges for severance and other termination benefits as a result of a organizational restructuring.

U.S. Retail

U.S. Retail segment net sales increased $937.38 million, or 212.68%, to $~~362~~332.32 million. The increase in net sales was driven by ahigher ~~mid-single~~unit ~~digit~~volume ~~percentage~~and ~~increase~~higher inAUR. ~~average~~Unit ~~selling~~volume ~~prices~~increased ~~per~~by ~~unit,~~a ~~growth~~double-digit inpercentage ~~our~~driven ~~core~~by ~~baby~~higher ~~assortment,~~traffic and atransactions ~~strong~~in ~~Labor~~both ~~Day~~stores ~~performance,~~and ~~resulting~~eCommerce. inAUR increased by a ~~second~~low-single ~~consecutive~~digit ~~quarter~~percentage, ofreflecting ~~positive~~pricing ~~comparable~~actions ~~net~~to ~~sales.~~mitigate ~~Other~~incremental ~~contributing~~tariff-related ~~factors~~costs, topartially ~~the~~offset ~~increase~~by ~~include~~product ~~sales~~mix, ~~contribution~~which reflects a higher proportion of ~~our~~opening ~~new~~price ~~retail~~point ~~stores.~~product ~~These~~and ~~factors~~clearance ~~were~~sales ~~partially~~compared ~~offset~~to bythe aprior ~~low-single~~period. ~~digit~~In ~~percentage~~addition, ~~decrease~~the infirst ~~units~~quarter ~~sold~~of ~~and~~fiscal ~~lower~~2026 ~~traffic~~benefited infrom ~~both~~the ~~retail~~timing ~~stores~~of ~~and~~the ~~eCommerce~~Easter holiday.

~~Comparable~~Overall, demand trends continued to improve in the first quarter of fiscal 2026 as comparable net sales, including retail ~~store~~stores and eCommerce, increased 210.05% ~~primarily~~and ~~driven~~delivered bya ~~the~~fourth ~~factors~~consecutive ~~mentioned~~quarter ~~above~~of positive comparable net sales growth. As of ~~September~~April 274, ~~2025~~2026, we operated ~~808~~798 retail stores in the U.S. compared to 804 as of ~~December~~January 283, ~~2024~~2026, and ~~795~~802 as of ~~September~~March 2829, ~~2024~~2025.

U.S. Retail segment operating income ~~decreased~~increased $176.37 million, or 63291.56%, to $109.0 million, ~~primarily~~ due to aan ~~decrease~~increase in gross profit of $213.79 million, ~~and~~partially offset by an increase in SG&A expenses of $147.51 million. Segment operating margin ~~decreased~~increased ~~490~~190 bps to 2.87%, primarily driven by a ~~230~~460 bps decrease in ~~gross~~SG&A ~~margin~~rate, ~~and~~partially offset by a ~~270~~250 bps ~~increase~~decrease in ~~SG&A~~gross ~~rate~~margin. The decrease in gross margin was driven by a ~~low~~high-~~teens~~single digit percentage increase in ~~average~~AUC ~~cost per unit sold~~ as a result of incremental ~~tariffs~~tariff-related ~~and~~costs, ~~investments~~which inwas ~~product make,~~ partially offset by increased ~~average selling prices per unit~~AUR. The ~~increase~~decrease in the SG&A rate ~~was~~reflected ~~driven~~fixed bycost ~~continued~~leverage ~~investments~~on ~~in new and remodeled retail stores,~~ higher ~~performance-based~~net ~~compensation expense~~sales, ~~increased~~partially ~~marketing~~offset ~~spend,~~by ~~and~~inflationary ~~higher~~pressure ~~distribution~~in ~~and~~store-related ~~transportation costs~~expenses.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

U.S. Wholesale

U.S. Wholesale segment net sales ~~decreased~~increased $151.23 million, or 50.15%, to $~~283~~251.84 million, driven by ~~decreased~~increased sales of our ~~Simple~~exclusive ~~Joys~~Carter’s ~~brand~~brands, primarily ~~due to changes in business model that reduced visibility, traffic, and demand for the brand. Other factors include lower replenishment and unfavorable timing of customer shipments,~~ offset by ~~increased~~lower demand ~~for~~from ~~our~~department ~~other exclusive Carter’s brands~~stores. WeAUR ~~expect~~increased ~~for~~by ~~reduced~~a ~~demand~~high-single ~~for~~digit ~~Simple Joys to continue into fiscal 2026~~percentage, ~~which~~reflecting ~~could~~pricing ~~unfavorably~~actions ~~impact~~to ~~net~~mitigate ~~sales~~incremental ~~and~~tariff-related ~~operating income in the U~~costs.S. ~~Wholesale~~Unit ~~segment.~~volume ~~Units sold~~ decreased by a mid-single digit percentage. ~~Average~~primarily ~~selling~~driven ~~prices~~by ~~per~~lower ~~unit~~demand ~~were~~from ~~comparable~~department ~~to the third quarter of fiscal 2024~~stores.

U.S. Wholesale segment operating income decreased $1918.15 million, or 3033.35%, to $4436.08 million, ~~primarily~~ due to a decrease in gross profit of $1419.78 million, ~~and~~partially anoffset ~~increase~~by a decrease in SG&A expenses of $31.87 million. Segment operating margin decreased ~~560~~750 bps to 1514.56%, driven by aan ~~350~~810 bps decrease in gross margin, ~~and~~partially offset by a ~~190~~70 bps ~~increase~~decrease in SG&A rate. The decrease in gross margin was driven by ahigher ~~mid-single~~AUC ~~digit~~and ~~percentage~~customer ~~increase~~mix, inpartially ~~average~~offset ~~cost~~by ~~per~~higher ~~unit~~AUR. ~~sold~~AUC increased by a high-teen digit percentage as a result of incremental ~~tariffs~~tariff-related costs and investments in product make~~, partially offset by customer mix~~. The ~~increase~~decrease in the SG&A rate was driven by ~~fixed~~lower ~~cost~~distribution ~~deleverage~~costs on ~~decreased~~lower ~~net~~unit ~~sales,~~volume ~~higher~~and lower bad debt expense~~, and increased performance-based compensation expense, partially offset by decreased distribution costs on lower volumes shipped~~.

International

International segment net sales increased $512.2 million, or 414.93%, to $~~111~~97.75 million, driven by agrowth 30in Mexico and Canada.9% ~~increase~~In inMexico, net sales ingrowth ~~Mexico~~reflected ~~due~~higher toAUR, the contribution offrom new retail stores, ~~higher traffic,~~ and ~~increased~~higher ~~wholesale~~unit ~~shipments~~volume. ~~Other~~Canadian ~~contributing~~comparable ~~factors to the increase in~~ net sales, ~~include~~including aretail ~~mid-single~~store ~~digit percentage increase in average selling prices per unit~~ and eCommerce, increased ~~shipments to our international wholesale partners~~4.0%, ~~These~~driven ~~factors~~by ~~were~~higher ~~partially~~unit ~~offset~~volume byand ~~unfavorable~~the ~~timing~~favorable impact of ~~wholesale~~foreign ~~customer~~currency ~~shipments~~exchange ~~in Canada~~rates.

~~Canadian~~AUR ~~comparable~~increased ~~net~~by ~~sales,~~a ~~including~~high-single ~~retail~~digit ~~stores and eCommerce~~percentage, ~~decreased 1.5%,~~ driven by ~~decreased~~pricing ~~units~~and ~~sold,~~the ~~partially~~favorable ~~offset~~impact byof ~~increased~~foreign ~~average~~currency ~~selling~~exchange ~~prices per unit~~rates. ~~The~~International ~~decrease~~segment inunit ~~units~~volume ~~sold~~increased ~~was~~by ~~primarily related to reduced availability of clearance inventory following~~ a ~~strong sell~~mid-~~through~~single indigit ~~the~~percentage, ~~first~~reflecting ~~half~~growth ofacross ~~fiscal~~the ~~2025~~segment. Changes in foreign currency exchange rates used for translation had a $05.26 million ~~unfavorable~~favorable effect on International segment net sales.

As of ~~September~~April 274, ~~2025~~2026, we operated ~~192~~191 ~~stores~~ and 6573 retail stores in Canada and Mexico, respectively. As of ~~December~~January 283, ~~2024~~2026, we operated ~~191~~192 and 6272 retail stores in Canada and Mexico, respectively. As of ~~September~~March 2829, ~~2024~~2025, we operated ~~188~~191 and 5664 retail stores in Canada and Mexico, respectively.

International segment operating income ~~decreased~~was $14.12 million, orin ~~10.4%,~~the tofirst ~~$9.2~~quarter ~~million,~~of ~~primarily~~fiscal ~~due~~2026 compared to ansegment ~~increase~~operating loss of $0.2 million in ~~SG&A~~the ~~expenses~~first quarter of $4fiscal 2025.5 ~~million,~~This ~~partially~~change ~~offset~~was driven by an increase in gross profit of $38.07 million, ~~and~~partially offset by an increase in ~~royalty~~SG&A ~~income~~expenses of $0.4 .1 million. Segment operating margin ~~decreased~~increased ~~140~~460 bps to 84.23%, driven by a ~~220~~340 bps increase in ~~the SG&A rate, partially offset by a 40 bps increase in~~ gross margin and a 40150 bps ~~increase~~decrease in ~~royalty~~the ~~income~~SG&A rate. The increase in gross margin was driven by higher ~~average~~AUR ~~selling prices per unit~~ and product mix, partially offset by ~~higher average cost per unit sold. Average cost per unit sold increased by~~ a ~~mid~~low-single digit percentage, ~~reflecting~~increase ~~the impact of incremental tariffs~~ in ~~Mexico and product mix~~AUC. The ~~increase~~decrease in the SG&A rate was driven by ~~increased~~fixed ~~performance-based~~cost ~~compensation~~leverage ~~expense,~~on ~~retail~~increased ~~store~~net ~~rent~~sales, ~~and retail store employee costs,~~ partially offset by ~~decreased~~higher ~~bad~~retail ~~debt~~store ~~expense~~rent and ~~fixed~~retail ~~cost~~store ~~leverage~~employee ~~on increased net sales~~costs.

Unallocated Corporate Expenses

Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our business segments and include unallocated accounting, finance, legal, human resources, and information technology expenses, ~~occupancy costs for our corporate headquarters, and other benefit and compensation programs, including performance-based compensation.~~

Unallocated corporate expenses increased $0.1 million, or 0.6%, to $23.8 million. Unallocated corporate expenses were 3.1% of net sales, comparable to the third quarter of fiscal 2024, reflecting higher severance, relocation, and recruiting costs and increased performance-based compensation expense, offset by lower consulting costs.22

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

~~THREE~~occupancy ~~FISCAL~~costs ~~QUARTERS~~for ~~ENDED~~our ~~SEPTEMBER~~corporate 27headquarters, ~~2025~~and ~~COMPARED~~other TObenefit ~~THREE~~and ~~FISCAL~~compensation ~~QUARTERS~~programs, ~~ENDED~~including ~~SEPTEMBER~~performance-based ~~28, 2024~~compensation.

~~The~~Unallocated ~~following~~corporate ~~table~~expenses ~~summarizes~~decreased ~~our~~$0.5 ~~results~~million, or 2.2%, to $21.5 million. Unallocated corporate expenses, as a percentage of ~~operations~~consolidated net sales, decreased 30 bps to 3.2%, driven by lower consulting costs.

	Three fiscal quarters ended
(dollars in thousands, except per share data)	September 27, 2025			September 28, 2024			$ Change		% / bps Change
Consolidated net sales	$	1,972,975		$	1,984,390		$	(11,415)	(0.6)	%
Cost of goods sold	1,058,497			1,030,249			28,248		2.7	%
Gross profit	914,478			954,141			(39,663)		(4.2)	%
Gross profit as % of consolidated net sales	46.4		%	48.1		%			(170) bps
Royalty income, net	14,008			14,959			(951)		(6.4)	%
Royalty income, net as % of consolidated net sales	0.7		%	0.8		%			(10) bps
Selling, general, and administrative expenses	869,246			797,572			71,674		9.0	%
SG&A expenses as % of consolidated net sales	44.1		%	40.2		%			390 bps
Operating income	59,240			171,528			(112,288)		(65.5)	%
Operating income as % of consolidated net sales	3.0		%	8.6		%			(560) bps
Interest expense	22,849			23,156			(307)		(1.3)	%
Interest income	(10,007)			(8,644)			(1,363)		15.8	%
Other (income) expense, net(1)	(265)			1,028			(1,293)		nm
Pension plan settlement(1)	8,777			949			7,828		nm
Income before income taxes	37,886			155,039			(117,153)		(75.6)	%
Income tax provision	10,308			31,047			(20,739)		(66.8)	%
Effective tax rate(2)	27.2		%	20.0		%			720 bps
Net income	$	27,578		$	123,992		$	(96,414)	(77.8)	%
Basic net income per common share	$	0.75		$	3.41		$	(2.66)	(78.0)	%
Diluted net income per common share	$	0.75		$	3.41		$	(2.66)	(78.0)	%
Dividend declared and paid per common share	$	1.30		$	2.40		$	(1.10)	(45.8)	%

(1)Pension plan settlement charge for the three fiscal quarters ended September 28, 2024 has been reclassified to the Pension plan settlement line item. This charge was previously included in Other expense (income).

(2)Effective tax rate is calculated by dividing the provision for income taxes by income before income taxes.

Note: Results may not be additive due to rounding. Percentage changes that are not considered meaningful are denoted with “nm”.

Consolidated Net Sales

Consolidated net sales decreased $11.4 million, or 0.6%, to $1.97 billion. The decrease in net sales was driven by lower sales of our Simple Joys brand, lower replenishment and demand with department stores, and the unfavorable impact of foreign currency exchange rates due to a stronger U.S. dollar compared to the first three quarters of fiscal 2024. These factors were partially offset by growth in our International segment and increased sales to off-price wholesale channel customers.

Average selling prices per unit decreased by a low-single digit percentage reflecting selected investments in pricing in the first half of fiscal 2025, partially offset by pricing actions in the third quarter of fiscal 2025 in response to incremental tariffs. Units sold increased by a low-single digit percentage. Changes in foreign currency exchange rates used for translation had an unfavorable effect on our consolidated net sales of $9.7 million.

Gross Profit and Gross Margin

Consolidated gross profit decreased $39.7 million, or 4.2%, to $914.5 million and consolidated gross margin decreased 170 bps to 46.4%. The decrease in consolidated gross profit and gross margin was driven by decreased net sales, higher average cost per unit sold, and increased sales to off-price wholesale channel customers, partially offset by channel mix and decreased inventory provisions driven by improved utilization of excess inventory. Average cost per unit sold increased by a low-single digit percentage driven by incremental tariffs and investments in product make.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Selling, General, and Administrative Expenses

Consolidated SG&A expenses increased $71.7 million, or 9.0%, to $869.2 million and increased as a percentage of consolidated net sales by 390 bps to 44.1%. This increase in SG&A rate was driven by fixed cost deleverage on decreased sales, costs related to operating model improvements and leadership transition, organizational restructuring, higher performance-based compensation expense, and investments in new and remodeled retail stores. Performance-based compensation expense as a percentage of net sales increased 60 bps, due to a higher projected attainment of annual incentive objectives relative to the prior period.

Operating Income

Consolidated operating income decreased $112.3 million, or 65.5%, to $59.2 million and decreased as a percentage of net sales by 560 bps to 3.0%, primarily due to the factors previously discussed.

Interest Income

Consolidated interest income increased $1.4 million to $10.0 million, due to increased cash balances during the period and interest recognized on federal tax refunds.

Other (Income) Expense, Net

Consolidated other income was $0.3 million in the first three quarters of fiscal 2025 compared to consolidated other expense of $1.0 million in the first three quarters of fiscal 2024. The change was driven by favorable changes in foreign currency exchange rates during the period.

Pension Plan Settlement

During the first three quarters of fiscal 2025 and fiscal 2024, the Company recognized non-cash pension settlement charges of $8.8 million and $0.9 million, respectively, which were related to the settlement of pension obligations under the frozen OshKosh B’Gosh Pension Plan.

Income Taxes

Consolidated income tax provision decreased $20.7 million, or 66.8%, to $10.3 million and the effective tax rate increased 720 bps to 27.2%. The increase in the effective tax rate was driven by lower income before income taxes in the first three quarters of fiscal 2025, incremental nondeductible officers’ compensation, and Hong Kong’s implementation of the Pillar Two global minimum tax legislation. This was partially offset by a lower proportion of income generated in the United States, where the tax rate is higher relative to some of our international jurisdictions, compared to the first three quarters of fiscal 2024.

Net Income

Consolidated net income decreased $96.4 million, or 77.8%, to $27.6 million, primarily due to the factors previously discussed.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results by Segment - First Three Quarters of Fiscal 2025 compared to First Three Quarters of Fiscal 2024

The following table summarizes net sales and segment operating income, by segment, for the first three quarters of fiscal 2025 and fiscal 2024:

	Three fiscal quarters ended
(dollars in thousands)	September 27, 2025		% of consolidated net sales		September 28, 2024		% of consolidated net sales		$ Change		% Change
Net sales:
U.S. Retail	$	956,288	48.5	%	$	950,877	47.9	%	$	5,411	0.6	%
U.S. Wholesale	726,899		36.8	%	756,022		38.1	%	(29,123)		(3.9)	%
International	289,788		14.7	%	277,491		14.0	%	12,297		4.4	%
Consolidated net sales	$	1,972,975	100.0	%	$	1,984,390	100.0	%	$	(11,415)	(0.6)	%
Segment operating income(1):			Segment operating margin				Segment operating margin
U.S. Retail	$	16,052	1.7	%	$	59,681	6.3	%	$	(43,629)	(73.1)	%
U.S. Wholesale	126,369		17.4	%	162,662		21.5	%	(36,293)		(22.3)	%
International	12,564		4.3	%	17,981		6.5	%	(5,417)		(30.1)	%
Total segment operating income	$	154,985	7.9	%	$	240,324	12.1	%	$	(85,339)	(35.5)	%
Items not included in segment operating income:			Consolidated operating margin				Consolidated operating margin
Unallocated corporate expenses	$	(68,465)	n/a		$	(68,796)	n/a		$	(331)	(0.5)	%
Operating model improvement costs(2)	(13,469)		n/a		—		n/a		n/a		n/a
Leadership transition costs(3)	(7,694)		n/a		—		n/a		n/a		n/a
Organizational restructuring(4)	(6,117)		n/a		—		n/a		n/a		n/a
Consolidated operating income	$	59,240	3.0	%	$	171,528	8.6	%	$	(112,288)	(65.5)	%

(1)Segment operating income for the three fiscal quarters ended September 28, 2024 have been recast to conform to the current presentation.

(2)Primarily related to third-party consulting costs to support operating model improvements.

(3)Related to costs associated with the transition of our former CEO, including accelerated vesting of outstanding time-based restricted stock awards pursuant to a retirement agreement approved by the Board of Directors, executive recruiting costs, and other related costs.

(4)Related to charges for severance and other termination benefits as a result of organizational restructuring.

U.S. Retail

U.S. Retail segment net sales increased $5.4 million, or 0.6%, to $956.3 million. The increase in net sales was driven by sales contribution of our new retail stores, growth in our core baby assortment, and increased units per transaction in both our stores and eCommerce channels. These factors were partially offset by decreased traffic in our retail stores, lower demand for our kid-sized assortment, and lower average selling prices per unit. Average selling prices per unit decreased by a low-single digit percentage, reflecting product mix and selected investments in pricing in the first half of fiscal 2025, partially offset by pricing actions in the third quarter of fiscal 2025 in response to incremental tariffs. Units sold increased by a low-single digit percentage. Comparable net sales, including retail store and eCommerce, decreased 0.3%, driven by lower traffic and lower average selling prices per unit.

U.S. Retail segment operating income decreased $43.6 million, or 73.1%, to $16.1 million, primarily due to a decrease in gross profit of $13.3 million and an increase in SG&A expenses of $30.1 million. Segment operating margin decreased 460 bps to 1.7%, driven by a 180 bps decrease in gross margin and a 280 bps increase in the SG&A rate. The decrease in gross margin was driven by decreased average selling prices per unit, a mid-single digit percentage increase in average cost per unit sold driven by incremental tariffs and investments in product make, and product mix. The increase in the SG&A rate was driven by investments in new and remodeled retail stores, increased performance-based compensation expense, and higher distribution and transportation costs.

U.S. Wholesale

U.S. Wholesale segment net sales decreased $29.1 million, or 3.9%, to $726.9 million, driven by decreased sales of our Simple Joys brand primarily due to changes in business model that reduced visibility, traffic, and demand for brand. Other factors

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

include lower replenishment and demand with department stores and decreased average selling prices per unit, which were offset by increased demand with our other exclusive Carter’s brands, higher sales to our off-price wholesale channel customers, and increased demand for our Skip Hop brand. Average selling prices per unit decreased by a low-single digit percentage driven by customer mix. Units sold decreased by a low-single digit percentage.

U.S. Wholesale segment operating income decreased $36.3 million, or 22.3%, to $126.4 million, primarily due to a decrease in gross profit of $25.6 million and an increase in SG&A expenses of $9.7 million. Segment operating margin decreased 410 bps to 17.4%. The drivers of the decrease in operating margin were a 220 bps decrease in gross margin and a 170 bps increase in SG&A rate. The decrease in gross margin was driven by decreased average selling prices per unit sold, a low-single digit percentage increase in average cost per unit sold, and customer mix, partially offset by decreased inventory provisions driven by improved utilization of excess inventory. Average cost per unit sold increased as a result of incremental tariffs, and investments in product make, partially offset by product mix. The increase in the SG&A rate was driven by increased bad debt expense, higher distribution and performance-based compensation costs, and fixed cost deleverage on decreased sales.

International

International segment net sales increased $12.3 million, or 4.4%, to $289.8 million, driven by improved demand with our international wholesale partners, and growth in Mexico and Canada. Growth in Mexico was driven by the contribution of new retail stores and higher traffic. Canadian comparable net sales, including retail stores and eCommerce, increased 2.5% driven by an increase in traffic and units sold. International segment units sold increased by a mid-single digit percentage.

These factors were partially offset by decreased average selling prices per unit. Average selling prices per unit decreased by a low-single digit percentage, driven by the unfavorable impact of foreign currency exchange rates and product mix. Changes in foreign currency exchange rates used for translation had a $9.7 million unfavorable effect on International segment net sales.

International segment operating income decreased $5.4 million, or 30.1%, to $12.6 million, primarily due to a decrease in gross profit of $0.8 million and an increase in SG&A expenses of $5.0 million. Segment operating margin decreased 220 bps to 4.3%, driven by a 230 bps decrease in gross margin, partially offset by a 10 bps decrease in the SG&A rate. The decrease in gross margin was due to decreased average selling prices per unit and increased average cost per unit sold. Average cost per unit sold increased by a mid-single digit percentage due to product mix. The decrease in the SG&A rate was driven by fixed cost leverage on increased net sales, partially offset by increased performance-based compensation and higher retail store rent and retail store employee costs.

Unallocated Corporate Expenses

Unallocated corporate expenses decreased $0.3 million, or 0.5%, to $68.5 million. Unallocated corporate expenses were 3.5% of net sales, comparable to the first three quarters of fiscal 2024.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES

We have provided non-GAAP adjusted operating income, income taxes, net income, and diluted net income per common share measures, which exclude certain items presented below. We believe that this information provides a meaningful comparison of our results and affords investors a view of what management considers to be our core performance, and we also, from time to time, use some of these non-GAAP measures, such as adjusted operating income, as performance metrics in awards under our annual and long-term incentive compensation plans. These measures are not in accordance with, or an alternative to, generally accepted accounting principles in the U.S. (GAAP). The most comparable GAAP measures are operating income, income tax provision, net income, and diluted net income per common share, respectively. Adjusted operating income, income taxes, net income, and diluted net income per common share should not be considered in isolation or as a substitute for analysis of our results as reported in accordance with GAAP. Other companies may calculate adjusted operating income, income taxes, net income, and diluted net income per common share differently than we do, limiting the usefulness of the measure for comparisons with other companies.


	Fiscal quarter ended
	April 4, 2026										March 29, 2025
(In millions, except earnings per share)	Operating Income		% Net Sales		Income Taxes		Net Income		Diluted Net Income per Common Share		Operating Income		% Net Sales		Income Taxes		Net Income		Diluted Net Income per Common Share
As reported (GAAP)	$	28.4	4.2	%	$	5.5	$	14.3	$	0.39	$	26.1	4.1	%	$	5.8	$	15.5	$	0.43
Leadership transition costs(1)	—				—		—		—		6.1				0.3		5.8		0.16
Operating model improvement costs(2)	—				—		—		—		3.2				0.8		2.4		0.07

As adjusted	$	28.4	4.2	%	$	5.5	$	14.3	$	0.39	$	35.4	5.6	%	$	6.9	$	23.8	$	0.66

34(1)Related to costs associated with the transition of our former CEO, including accelerated vesting of outstanding time-based restricted stock awards, executive recruiting costs, and other related costs.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

	Fiscal quarter ended
	September 27, 2025										September 28, 2024
(dollars in millions, except earnings per share)	Operating Income		% Net Sales		Income Taxes		Net Income		Diluted Net Income per Common Share		Operating Income		% Net Sales		Income Taxes		Net Income		Diluted Net Income per Common Share
As reported (GAAP)	$	29.1	3.8	%	$	3.2	$	11.6	$	0.32	$	77.0	10.2	%	$	12.4	$	58.3	$	1.62
Organizational restructuring(1)	6.1				1.5		4.6		0.13		—				—		—		—
Operating model improvement costs(2)	3.7				0.9		2.8		0.08		—				—		—		—
Leadership transition costs(3)	0.5				0.1		0.4		0.01		—				—		—		—
Pension plan settlement(4)	—				2.1		6.7		0.18		—				0.2		0.7		0.02
Deferred compensation plan termination(5)	—				(0.8)		0.8		0.02		—				—		—		—
As adjusted	$	39.4	5.2	%	$	7.1	$	26.8	$	0.74	$	77.0	10.2	%	$	12.6	$	59.0	$	1.64

(1)Related to charges for severance and other termination benefits as a result of organizational restructuring.

(2)Primarily related to third-party consulting costs to support operating model improvements.

(3)Related to costs associated with the transition of our former CEO, including executive recruiting costs, and other related costs.

(4)Related to non-cash charges as a result of pension plan settlements.

(5)Related to the incremental income tax impact resulting from the announced termination of the Company’s deferred compensation plan.

Note: Results may not be additive due to rounding.

	Three fiscal quarters ended
	September 27, 2025										September 28, 2024
(dollars in millions, except earnings per share)	Operating Income		% Net Sales		Income Taxes		Net Income		Diluted Net Income per Common Share		Operating Income		% Net Sales		Income Taxes		Net Income		Diluted Net Income per Common Share
As reported (GAAP)	$	59.2	3.0	%	$	10.3	$	27.6	$	0.75	$	171.5	8.6	%	$	31.0	$	124.0	$	3.41
Operating model improvement costs(1)	13.5				3.2		10.2		0.29		—				—		—		—
Leadership transition costs(2)	7.7				0.7		7.0		0.19		—				—		—		—
Organizational restructuring(3)	6.1				1.5		4.6		0.13		—				—		—		—
Pension plan settlement(4)	—				2.1		6.7		0.19		—				0.2		0.7		0.02
Deferred compensation plan termination(5)	—				(0.8)		0.8		0.02		—				—		—		—
As adjusted	$	86.5	4.4	%	$	17.0	$	56.9	$	1.57	$	171.5	8.6	%	$	31.3	$	124.7	$	3.43

(1)Primarily related to third-party consulting costs to support operating model improvements.

(2)Related to costs associated with the transition of our former CEO, including accelerated vesting of outstanding time-based restricted stock awards pursuant to a retirement agreement approved by the Board of Directors, executive recruiting costs, and other related costs.

(3)Related to charges for severance and other termination benefits as a result of organizational restructuring.

(4)Related to non-cash charges as a result of pension plan settlement.

(5)Related to the incremental income tax impact resulting from the announced termination of the Company’s deferred compensation plan.

Note: Results may not be additive due to rounding.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

LIQUIDITY AND CAPITAL RESOURCES

Our ongoing cash needs are primarily for working capital (consisting primarily of inventory), capital expenditures, employee compensation, interest on debt, the return of capital to our shareholders, and other general corporate purposes. We expect that our primary sources of liquidity will be cash and cash equivalents on hand, cash flow from operations, and available borrowing capacity under our secured asset-based revolving credit facility. We believe that our sources of liquidity are sufficient to meet our cash requirements for at least the next twelve months. However, these sources of liquidity may be affected by events described in “Forward-Looking Statements” section of this Form 10-Q, including, but not limited to, our risk factors discussed under the heading “Risk Factors” in Part II, Item 1A. of this Quarterly Report on Form 10-Q, the risk factors discussed under the heading “Risk Factors” in our most recently filed Annual Report on Form 10-K, and in other reports filed with the Securities and Exchange Commission from time to time.

As discussed under the heading “Known or Anticipated Trends” in ~~this~~our ~~Quarterly~~most recently filed Annual Report on Form 10-QK, the impacts of new tariffs orand other trade ~~restrictions~~measures ~~will~~ have anhad ~~adverse~~and ~~impact~~may oncontinue ~~our~~to ~~cost structure and could~~ have an adverse impact on our cost structure and supply chain, which may impact our working capital needs in the near term. WeWhile ~~are~~recent ~~pursuing~~developments, ~~actions~~including toa ~~mitigate~~decision by the ~~impact~~U.S. Supreme Court that invalidated certain incremental tariffs, ~~but~~may weaffect ~~expect~~our ~~some~~future ~~volatility~~exposure into ~~cash~~these ~~flows~~tariffs, inthe ~~near~~trade ~~term~~policy environment remains dynamic and the ultimate impacts are uncertain. ~~However,~~We wecontinue ~~believe~~to ~~that~~evaluate ~~our~~and ~~sources~~mitigate ofthese ~~liquidity,~~impacts ~~including~~and ~~the~~may ~~available~~experience ~~borrowing~~volatility ~~capacity~~in ~~under~~cash ~~our~~flows ~~secured~~in ~~revolving~~the ~~credit~~near ~~facility~~term. However, ~~will~~we bebelieve ~~sufficient~~our tosources ~~manage~~of ~~these~~liquidity, ~~recent~~including ~~developments.~~

As of September 27, 2025, we had $184.2 million of cash and cash equivalents held at major financial institutions, including $52.2 million held at financial institutions located outside of the United States. We maintain cash deposits with major financial institutions that exceed the insurance coverage limits provided by the Federal Deposit Insurance Corporation in the United States and by similar insurers for deposits located outside the United States. To mitigate this risk, we utilize a policy of allocating cash deposits among major financial institutions that have been evaluated by us and third-party rating agencies as having acceptable risk profiles.23

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

cash and available borrowing capacity under our secured asset-based revolving credit facility, will be sufficient to manage these developments.

As of April 4, 2026, we had $473.4 million of cash and cash equivalents held at major financial institutions, including $78.0 million held at financial institutions located outside of the United States. We do not expect any material restrictions on our ability to access or use cash held outside of the United States. We maintain cash deposits with major financial institutions that exceed the insurance coverage limits provided by the Federal Deposit Insurance Corporation in the United States and by similar insurers for deposits located outside the United States. To mitigate this risk, we utilize a policy of allocating cash deposits among major financial institutions that have been evaluated by us and third-party rating agencies as having acceptable risk profiles.

Balance Sheet

Net accounts receivable at ~~September~~April 274, ~~2025~~2026 were $~~237~~196.96 million compared to $~~247~~203.09 million at ~~September~~March 2829, ~~2024~~2025 and $~~194~~178.86 million at ~~December~~January 283, ~~2024~~2026. The decrease of $97.13 million, or 3.76%, at ~~September~~April 274, ~~2025~~2026 compared to ~~September~~March 2829, ~~2024~~2025 primarily reflects the timing of wholesale customer shipments. Due to the seasonal nature of our operations, the net accounts receivable balance at ~~September~~April 274, ~~2025~~2026 is not comparable to the net accounts receivable balance at ~~December~~January 283, ~~2024~~2026.

Inventories at ~~September~~April 274, ~~2025~~2026 were $~~656~~465.19 million compared to $~~607~~474.41 million at ~~September~~March 2829, ~~2024~~2025 and $~~502~~544.36 million at ~~December~~January 283, ~~2024~~2026. The ~~increase~~decrease of $~~48.~~8.2 million, or 81.07%, at ~~September~~April 274, ~~2025~~2026 compared to ~~September~~March 2829, ~~2024~~2025 was driven by ~~$34.0 million~~lower days of supply, partially offset by incremental tariffs imposed on products imported into the United States ~~and investments in product make~~. Days of supply were comparable to September 28, 2024. Due to the seasonal nature of our operations, the inventory balance at September 27, 2025 is not comparable to the inventories balance at December 28, 2024.

~~Operating~~Prepaid ~~lease~~expenses and other current assets at ~~September~~April 274, ~~2025~~2026 were $~~611~~75.67 million compared to $~~560~~50.2 million at ~~September~~March 2829, ~~2024~~2025 and $~~577~~60.15 million at ~~December~~January 283, ~~2024~~2026. The increase of $5125.35 million, or 950.28%, at ~~September~~April 274, ~~2025~~2026 compared to ~~September~~March 2829, ~~2024~~2025 was driven by the ~~renewal~~reclassification of ~~one~~Rabbi ofTrust ~~our~~assets ~~distribution~~from ~~centers~~long-term into ~~Georgia,~~current ~~the~~to ~~commencement~~align ofwith ~~a new corporate office lease in New York following~~ the ~~expiration~~anticipated settlement of ~~the~~associated ~~prior~~deferred ~~lease,~~compensation ~~and~~liabilities ~~investments~~ in ~~our~~fiscal ~~retail store fleet~~2026.

Accounts payable at April 4, 2026 were $188.7 million compared to $199.1 million at March 29, 2025 and $235.7 million at January 3, 2026. The decrease of $10.3 million, or 5.2%, at April 4, 2026 compared to March 29, 2025 was driven by the timing of payments for purchases of inventory. Due to the seasonal nature of our operations, the accounts payable balance at April 4, 2026 is not comparable to the accounts payable balance at January 3, 2026.

Other current liabilities at April 4, 2026 were $111.3 million compared to $84.7 million at March 29, 2025 and $133.8 million at January 3, 2026. The increase of $26.6 million, or 31.4%, at April 4, 2026 compared to March 29, 2025 was primarily driven by the timing of interest payments on long-term debt and the reclassification of deferred compensation liabilities from long-term to current to reflect the anticipated settlement of plan participant balances.

Other long-term liabilities at April 4, 2026 were $16.4 million compared to $33.0 million at March 29, 2025 and $19.4 million at January 3, 2026. The decrease of $16.5 million, or 50.1%, at April 4, 2026 compared to March 29, 2025 was primarily driven by the reclassification of deferred compensation liabilities from long-term to current to reflect the anticipated settlement of plan participant balances.

Cash Flow

Net Cash Provided by (Used in) ~~Provided by~~ Operating Activities

Net cash ~~used~~provided inby operating activities ~~was $136.3 million~~ for the first ~~three~~quarter ~~quarters~~ of fiscal ~~2025~~2026 was $6.4 million compared to net cash ~~provided~~used byin operating activities of $1148.36 million in the first ~~three~~quarter ~~quarters~~ of fiscal ~~2024~~2025. Our cash ~~flow~~flows ~~provided~~from by operating activities isare driven by net income and changes in our net working capital. The ~~change~~increase in ~~net~~operating cash ~~from~~flow ~~operating activities~~ was primarily driven by ~~decreased~~higher ~~net~~sell ~~income~~through ~~and~~of ~~increased~~ inventory ~~purchases~~during ~~driven~~the byperiod, ~~incremental~~resulting ~~tariffs~~in ~~imposed~~reduced ondays ~~products~~of ~~imported~~supply, ~~into~~and the Utiming of interest payments on our senior notes.S.

Net Cash Used in Investing Activities

Net cash used in investing activities ~~was $42.7 million~~ for the first ~~three~~quarter ~~quarters~~ of fiscal ~~2025~~2026 was $7.0 million compared to $3910.63 million in the first ~~three~~quarter ~~quarters~~ of fiscal ~~2024~~2025. The ~~increase~~decrease in net cash used in investing activities was driven by ~~increased~~decreased capital expenditures. Capital expenditures in the first ~~three~~quarter ~~quarters~~ of fiscal ~~2025~~2026 ~~was~~were driven by U.S. and international retail store openings and remodels and investments in our distribution facilities. We plan to invest approximately $55 million in capital expenditures in fiscal 2026, primarily for our retail store fleet, distribution facilities, and strategic information technology initiatives.

3624

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

We plan to invest $60.0 million in capital expenditures in fiscal 2025, which primarily relates to U.S. and international retail store openings and remodels, investments in our distribution facilities, and strategic information technology initiatives.

Net Cash Used in Financing Activities

Net cash used in financing activities was $5212.12 million in the first ~~three~~quarter ~~quarters~~ of fiscal ~~2025~~2026 compared to $~~145~~33.16 million in the first ~~three~~quarter ~~quarters~~ of fiscal ~~2024~~2025. This change in cash flow from financing activities was primarily driven by ~~open~~lower ~~market repurchases of common stock in the first three quarters of fiscal 2024 that did not reoccur in the first three quarters of fiscal 2025 and a decrease in~~ cash dividends distributed to shareholders during the period.

Share Repurchases

The Company did not repurchase and retire shares in open market transactions in ~~the~~either ~~first three quarters~~ of ~~fiscal 2025. In~~ the first ~~three~~ quarters of fiscal ~~2024,~~2026 ~~we repurchased~~ and ~~retired~~fiscal ~~736,423 shares in open market transactions for $50~~2025.~~5 million, at an average price of $68.61 per share.~~

The total remaining capacity under outstanding repurchase authorizations as of ~~September~~April 274, ~~2025~~2026, was approximately $599.0 million, based on settled repurchase transactions. The share repurchase authorizations have no expiration dates.

Future repurchases may occur from time to time in the open market, in privately negotiated transactions, or otherwise. The timing and amount of any repurchases will be at the discretion of the Company subject to restrictions under the Company’s secured asset-based revolving credit facility and considerations given to market conditions, stock price, other investment priorities, excise taxes, and other factors.

Dividends

In the first, ~~second,~~quarter ~~and third quarters~~ of fiscal ~~2025~~2026, the Company’s Board ~~of Directors~~ declared, and the Company paid, a cash dividend per common share of $0.~~80, $0.~~25~~, and $0~~.~~25,~~ ~~respectively (for an aggregate cash dividend per common share of $1.30 for the first three quarters of fiscal 2025).~~ Additionally, in ~~each of~~ the first ~~three~~quarter ~~quarters~~ of fiscal ~~2024~~2025, the Board ~~of Directors~~ declared, and the Company paid, a cash dividend per common share of $0.80 ~~(for an aggregate cash dividend per common share of $2~~.40 ~~for the first three quarters of fiscal 2024).~~ Our Board ~~of Directors~~ will evaluate future dividend declarations based on a number of factors, including restrictions under ~~the~~our ~~Company’s~~ secured asset-based revolving credit facility, business conditions, ~~the~~our ~~Company’s~~ financial performance, and other considerations.

Provisions in our secured asset-based revolving credit facility could have the effect of restricting our ability to pay cash dividends on, or make future repurchases of, our common stock, as further described in Note 6, Long-term Debt, to the condensed consolidated financial statements.

Financing Activities

Secured Revolving Credit Facility

As of ~~September~~April 274, ~~2025,~~2026 ~~December~~and January 283, ~~2024~~2026, we had no outstanding borrowings under our secured asset-based revolving credit facility (“ABL facility”), exclusive of $5.5 million and ~~September~~$6.3 million of outstanding letters of credit, respectively. As of March 2829, ~~2024~~2025, ~~the~~we ~~Company~~ had no outstanding borrowings under ~~its~~our secured cash-flow-based revolving credit facility, exclusive of $6.94 million of outstanding letters of credit. As of April 4, 2026, January 3, 2026, and March 29, 2025, there was approximately $4605.2 million, $743.7 million, and $5843.76 million ofavailable ~~outstanding~~for ~~letters~~future ~~of credit~~borrowing, respectively. ~~There~~Any ~~were~~outstanding no borrowings inunder our ABL facility and secured cash-flow-based revolving credit facility are classified as non-current liabilities on our condensed consolidated balance sheets due to contractual repayment terms under the ~~first~~credit ~~three~~facility. ~~quarters~~However, ofthese ~~fiscal~~repayment ~~2025~~terms also allow us to repay some or ~~fiscal~~all ~~2024~~of the outstanding borrowings at any time.

AsABL of September 27, 2025, December 28, 2024, and September 28, 2024, there was $843.1 million, $845.3 million, and $844.3 million available for future borrowing, respectively. All outstanding borrowings under our secured revolving credit facility are classified as non-current liabilities on our condensed consolidated balance sheets due to contractual repayment terms under the credit facility. However, these repayment terms also allow us to repay some or all of the outstanding borrowings at any time.Facility

~~Our~~On ~~secured~~November ~~revolving~~17, ~~credit~~2025, ~~facility~~the ~~provides~~Company, ~~for~~through aits ~~leverage~~wholly-~~based~~owned ~~pricing~~subsidiary, ~~grid~~The ~~which~~William ~~determines~~Carter anCompany ~~interest rate for borrowings~~(“TWCC”), ~~calculated~~entered asinto ~~the~~a ~~applicable~~new ~~floating~~five-year ~~benchmark~~ABL ~~rate~~facility ~~plus~~of aup ~~credit~~to ~~spread~~$750.0 million. ~~adjustment,~~The ifABL ~~any,~~facility ~~plus~~replaced anthe ~~amount~~Company’s ~~ranging~~existing ~~from 1~~$850.~~125%~~0 million tosecured ~~1.625%,~~ cash-flow-based onrevolving ~~leverage.~~credit Asfacility ofdue ~~September 27,~~April ~~2025,~~2027. ~~the~~Borrowings ~~borrowing~~under ~~rate~~the ~~for~~ABL anfacility ~~adjusted~~will ~~term~~mature, ~~Secured~~and ~~Overnight~~lending ~~Financing~~commitments ~~Rate~~thereunder ~~(“SOFR”)~~will ~~loan would have been 5.39%~~terminate, ~~which~~in ~~includes~~November ~~a leverage-based adjustment of 1~~2030.~~125%.~~

AsThe ofABL ~~September 27,~~facility ~~2025~~contains various covenants, including those that restrict the Company’s ~~was~~ability inand ~~compliance~~the ~~with~~ability of its ~~financial~~restricted ~~and~~subsidiaries to incur certain indebtedness, pay dividends or make distributions or other ~~covenants~~restricted ~~under~~payments, ~~the~~or ~~secured~~to ~~revolving~~grant ~~credit~~certain liens on their respective property or assets, among other things. The ABL facility also includes a springing financial covenant, consisting of, if the excess availability falls below certain thresholds, a fixed charge coverage ratio not to be less than 1.00 to 1.00.

InThe ~~October~~availability ~~2025,~~under the ~~Company’s~~ABL ~~wholly-owned~~facility ~~subsidiaries~~was $605.2 million and $743.7 million as of April 4, ~~The~~2026 ~~William~~and ~~Carter~~January 3, ~~Company~~2026, respectively. Availability is determined using borrowing base calculations of eligible inventory, accounts receivable, and ~~The~~intellectual ~~Genuine~~property ~~Canadian~~balances, ~~Corp.~~less availability reserves, ~~obtained~~current ~~commitments~~outstanding ~~for~~borrowings aunder ~~new~~the ~~five-~~ABL facility, and outstanding letters of credit. Availability may fluctuate throughout the year ~~asset-~~principally based ~~revolving~~on ~~credit~~changes ~~facility~~in ~~with~~eligible ~~initial~~inventory ~~borrowing~~and ~~commitments~~accounts ofreceivable nobalances. ~~less~~As ~~than~~of ~~$750~~April ~~million~~4, ~~subject~~2026, to the borrowing ~~base~~rate ~~under~~for ~~the~~a ~~new~~term ~~facility~~Secured Overnight Financing Rate (“SOFR”) loan would have been 4.90%, which includes an excess availability-based adjustment of 1.25%.

3725

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

As of April 4, 2026, the Company was in compliance with its covenants and requirements under the ABL facility.

Senior Notes

As of ~~September~~April 274, ~~2025~~2026, the Company had $~~500~~575.0 million principal amount of senior notes outstanding, bearing interest at a rate of 57.~~625~~375% per annum, and maturing on ~~March~~February 15, ~~2027~~2031. On our condensed consolidated balance sheets, the $~~500~~575.0 million of outstanding senior notes as of ~~September~~April 274, ~~2025~~2026 is reported net of $17.35 million of unamortized issuance-related debt costs. ~~We are evaluating opportunities to refinance our $500.0 million principal amount of senior notes outstanding that mature on March 15, 2027.~~

On November 13, 2025, TWCC issued the $575.0 million principal amount of senior notes due 2031. TWCC received net proceeds from the offering of the senior notes of approximately $567.0 million, after deducting underwriting fees and other expenses, which TWCC used to redeem the senior notes discussed below and for other general corporate purposes. Approximately $8.0 million, including both bank fees and other third-party expenses, was capitalized in connection with the issuance and is being amortized over the term of the senior notes.

Seasonality

We experience seasonal fluctuations in our sales and profitability due to the timing of certain holidays and key retail shopping periods, which generally has resulted in lower sales and gross profit in the first half of our fiscal year versus the second half of the fiscal year. Accordingly, our results of operations during the first half of the year may not be indicative of the results we expect for the full year.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies and estimates are described under the heading “Critical Accounting Policies and Estimates” in Item 7 of our most recent Annual Report on Form 10-K for the ~~2024~~2025 fiscal year ended ~~December~~January 283, ~~2024~~2026. Our critical accounting policies and estimates are those policies that require management’s most difficult and subjective judgments and may result in the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies and estimates include: revenue recognition and accounts receivable allowance, inventory, goodwill and other indefinite-lived intangible assets, accrued expenses, loss contingencies, accounting for income taxes, foreign currency, employee benefit plans, and stock-based compensation arrangements. There have been no material changes in these critical accounting policies and estimates from those described in our most recent Annual Report on Form 10-K.

Goodwill and Indefinite-lived Intangible Assets

~~During~~In the ~~second~~fourth quarter of fiscal 2025, the Company ~~identified~~performed aan ~~triggering~~annual ~~event~~quantitative ~~related~~impairment totest ~~the~~on ~~new tariffs enacted by~~ the ~~Trump~~goodwill ~~Administration~~ascribed ~~and~~to ~~the~~each ~~resulting~~of ~~unfavorable impact on~~ the Company’s ~~financial~~reporting ~~forecasts,~~units asand ~~well~~on ~~as a sustained decrease in~~ the ~~Company’s~~value ~~stock~~of ~~price~~its ~~since~~indefinite-lived ~~the~~intangible ~~last~~tradename ~~impairment~~assets ~~test~~as ~~conducted in the fourth quarter~~ of ~~fiscal~~January ~~2024~~3, 2026. AsThe aassumptions ~~result,~~used in the ~~Company performed a~~ quantitative impairment test onof the goodwill ~~ascribed to each~~ of ~~the~~our ~~Company’s~~ reporting units ~~and~~include onprojected ~~the~~revenue ~~value~~growth ofand ~~its~~profitability, ~~indefinite-lived~~terminal ~~intangible~~growth ~~tradename~~rates, ~~assets.~~discount ~~Based~~rates, onmarket ~~these assessments~~multiples, ~~there~~and ~~were~~applicable nocontrol ~~impairments~~premiums. toThe ~~the~~assumptions ~~value~~used ofin ~~goodwill~~the orquantitative toimpairment test of our indefinite-lived intangible tradename assets ininclude ~~the~~projected ~~second~~revenue ~~quarter~~growth ofand ~~fiscal~~profitability, ~~2025~~terminal growth rates, discount rates, and royalty rates.

~~Additionally,~~Based ~~during~~upon ~~the~~this ~~third~~assessment, ~~quarter~~there ofwere ~~fiscal~~no ~~2025,~~impairments on the ~~Company~~value ~~identified~~of agoodwill ~~triggering~~or ~~event~~indefinite-lived ~~related~~intangible totradename ~~the~~assets. ~~sustained~~The ~~decrease~~annual inassessment indicated that the ~~Company’s~~fair ~~stock~~value ~~price~~of ~~since~~assets for the ~~last~~U.S. ~~impairment~~Wholesale, ~~test~~U.S. ~~conducted~~Retail inand ~~the~~Other ~~second~~International ~~quarter~~reporting ofunits ~~fiscal~~exceeded ~~2025.~~its Ascarrying avalues ~~result,~~by ~~the~~at ~~Company~~least ~~performed~~25%. aThe ~~quantitative~~fair ~~impairment~~value ~~test~~of onassets for the ~~goodwill~~Canada ~~ascribed~~reporting tounit ~~each~~exceeded ofits ~~the~~carrying ~~Company’s~~value ~~reporting~~by ~~units~~approximately ~~and~~8%. onThe assessment indicated that the fair value of ~~its~~our indefinite-lived ~~intangible~~ tradename assets exceeded the carrying values by at least 35%.

The assumptions used in the quantitative impairment test of the goodwill of our reporting units include revenue growth and profitability, terminal growth rates, discount rates, market multiples, and a control premium. The assumptions used in the quantitative impairment test of our indefinite-lived intangible tradename assets include revenue growth and profitability, terminal growth rates, discount rates, and royalty rates.26

The assessment indicated that the fair value of assets for the U.S. Wholesale reporting unit exceeded its carrying value by over 100%. Additionally, the fair value of our indefinite-lived tradename assets exceeded the carrying values by at least 25%.

The assessment indicated that the fair value of assets for the U.S. Retail, Canada, and Other International reporting units exceeded its carrying values by approximately 4%, 7%, and 4%, respectively. Sensitivity tests on the Canada reporting unit showed that a 100 bps increase in the discount rate, 50 bps decrease in the long-term revenue growth rate, a 250 bps decrease in revenue growth rates, or a 50 bps decrease in operating margins would not change the conclusion and would not result in an impairment charge.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)

Sensitivity tests on the ~~U.S.~~Canada ~~Retail~~ reporting unit showed that a 50100 bps ~~decrease~~increase in the ~~long-term~~discount ~~revenue growth~~ rate ~~would not change the conclusion and would not result in an impairment charge. However~~, a50 ~~250~~ bps decrease in the long-term revenue growth ~~rates~~rate, a ~~100~~250 bps ~~increase~~decrease in ~~the~~revenue ~~discount~~growth ~~rate~~rates, or a 50 bps decrease in operating margins would ~~indicate~~not ~~goodwill~~change ~~impairment~~the ~~charges~~conclusion ~~of approximately $20 million, $30 million,~~ and ~~$50 million~~would ~~ascribed~~not toresult ~~the~~in ~~U.S.~~an ~~Retail~~impairment ~~reporting unit, respectively~~charge.

~~Sensitivity~~The ~~tests~~Company onbelieves ~~the Other International reporting unit showed~~ that athe 50assumptions ~~bps~~used ~~decrease~~ in ~~the~~our ~~long-term~~impairment ~~growth~~tests ~~rate~~are ~~would~~reasonable ~~not change the conclusion~~ and ~~would~~supportable ~~not~~as ~~result~~of inApril 4, an2026, ~~impairment~~and ~~charge. However~~therefore, athere ~~100~~were ~~bps~~no ~~increase~~impairment incharges ~~the~~recorded ~~discount rate, a 250 bps decrease~~ in the ~~revenue~~first ~~growth~~quarter ~~rates,~~of orfiscal a2026. 50As ~~bps~~of ~~decrease~~April 4, in2026, ~~operating~~the ~~margins~~carrying ~~would~~value ~~indicate goodwill impairment charges~~ of ~~approximately~~the ~~$8 million,~~goodwill ~~$3 million, and $3 million~~ ascribed to the ~~Other~~Canada ~~International~~ reporting unit, ~~respectively~~was $38.0 million.

The degree of uncertainty associated with the assumptions used in our impairment tests is elevated in the current macroeconomic environment due to evolving trade policies. The Company continues to monitor these macroeconomic conditions, including the potential impacts from new tariffs or trade restrictions, which could adversely affect the financial performance of our reporting units and indefinite-lived intangible tradename assets. Should these conditions lead to a significant decline in projected financial results, there could be impairment charges to these assets mentioned above, to the goodwill ascribed to our other reporting units, or to our other indefinite-lived intangible tradename assets.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Currency and Interest Rate Risks

In the operation of our business, we have market risk exposures including those related to foreign currency risk and interest rates. These risks, and our strategies to manage our exposure to them, are discussed below.

Currency Risk

We contract ~~for~~to ~~production~~purchase ~~with~~product from third parties, primarily in Asia. While these contracts are stated in U.S. dollars, there can be no assurance that the cost for the future production of our products will not be affected by exchange rate fluctuations between the U.S. dollar and the local currencies of these ~~contractors~~contracted manufacturers. Due to the number of currencies involved, we cannot quantify the potential impact that future currency fluctuations may have on our results of operations in future periods.

The financial statements of our foreign subsidiaries that are denominated in functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities and weighted-average exchange rates for revenues and expenses. The resulting translation adjustments are recorded as a component of Accumulated other comprehensive income (loss) ~~in our condensed consolidated balance sheets~~.

Our foreign subsidiaries typically record sales denominated in currencies other than the U.S. dollar, which are then translated into U.S. dollars using weighted-average exchange rates. The changes in foreign currency exchange rates used for translation in the ~~third~~first quarter of fiscal ~~2025~~2026, compared to the ~~third~~first quarter of fiscal ~~2024, had a $0.2 million unfavorable effect on our consolidated net sales. Changes in foreign currency exchange rates used for translation in the first three quarters of fiscal~~ 2025, ~~compared to the first three quarters of fiscal 2024,~~ had a $95.76 million ~~unfavorable~~favorable effect on our consolidated net sales.

Fluctuations in exchange rates between the U.S. dollar and other currencies may affect our results of operations, financial position, and cash flows. Transactions by our foreign subsidiaries may be denominated in a currency other than the entity’'s functional currency. Foreign currency transaction gains and losses also include the impact of intercompany loans with foreign subsidiaries that are marked to market. In our ~~condensed~~ consolidated statement of operations, these gains and losses are recorded within Other (income) expense, net. Foreign currency transaction gains and losses related to intercompany loans with foreign subsidiaries that are of a long-term nature are accounted for as translation adjustments and are included in Accumulated other comprehensive income (loss) ~~in our condensed consolidated balance sheets~~.

Interest Rate Risk

Our operating results are subject to risk from interest rate fluctuations on our secured asset-based revolving credit facility, which carries variable interest rates. As of ~~September~~April 274, ~~2025~~2026, there were no variable rate borrowings outstanding under the secured asset-based revolving credit facility. As a result, the impact of a hypothetical 100 bps increase in the effective interest rate would not result in a material amount of additional interest expense over a 12-month period.

Other Risks

We enter into various purchase order commitments with our suppliers. We ~~generally~~ can cancel these arrangements, although in some instances, we may be subject to a termination charge reflecting a percentage of work performed prior to cancellation.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our ~~Principal~~principal ~~Executive~~executive ~~Officer~~officer and ~~Principal~~principal ~~Financial~~financial ~~Officer~~officer ~~have~~has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our ~~Principal~~principal ~~Executive~~executive ~~Officer~~officer and ~~Principal~~principal ~~Financial~~financial ~~Officer~~officer ~~have~~has concluded that our disclosure controls and procedures are effective as of ~~September~~April 274, ~~2025~~2026.

Changes in Internal Control over Financial Reporting

The ~~Principal~~principal ~~Executive~~executive ~~Officer~~officer and ~~Principal~~principal ~~Financial~~financial ~~Officer~~officer also conducted an evaluation of the Company’s internal control over financial reporting (“Internal Control”) to determine whether any changes in Internal Control occurred during the fiscal quarter ended ~~September~~April 274, ~~2025~~2026, that have materially affected, or which are reasonably likely to materially affect, Internal Control.

There were no changes in the Company’s Internal Control that materially affected, or were likely to materially affect, such control over financial reporting during the fiscal quarter ended ~~September~~April 274, ~~2025~~2026.

4028

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is subject to various claims and pending or threatened lawsuits in the normal course of our business. The Company is not currently a party to any legal proceedings that it believes would have a material adverse effect on its financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS

Except as ~~noted~~set forth below, there have been no material changes to the risk factors described in our Form 10-K for the ~~2024~~2025 fiscal year ended ~~December~~January 283, ~~2024~~2026.

WeOur ~~may~~business ~~not~~could ~~fully~~be ~~realize~~negatively impacted by political and economic risks, including from the ~~expected~~conflict ~~benefits~~between ofthe ~~our~~United ~~restructuring~~States, ~~plans~~Israel, orand ~~other~~Iran ~~operating~~and orrelated ~~cost-saving~~geopolitical ~~initiatives~~instability, ~~which~~that ~~may~~we ~~negatively~~are ~~impact~~exposed to as a result of our ~~profitability~~global operations.

We ~~have~~are ~~recently~~subject ~~announced~~to ageneral ~~restructuring~~political ~~plan~~and ~~designed~~economic torisks ~~more~~in ~~closely~~connection ~~align~~with our ~~financial~~global ~~resources~~operations, ~~against~~including ~~the~~political ~~critical~~instability ~~priorities~~(both ofin ~~our~~the ~~business~~United States and ~~rebalance~~globally, ~~our~~including ~~cost~~the ~~base~~ongoing toconflict ~~further~~between ~~improve~~Russia ~~future~~and ~~profitability.~~Ukraine Weand ~~have~~the ~~also~~related ~~implemented~~economic ~~several~~and ~~changes~~retaliatory tomeasures), ~~our~~frequent ~~operating~~hostilities ~~model~~between Israel and ~~continue~~Hamas, topersistent ~~refine~~conflict ~~our~~in ~~operating~~the ~~model~~Red inSea ~~response~~region, toterrorist ~~business~~attacks, and ~~market~~changes ~~conditions.~~in Wediplomatic ~~may~~and ~~not~~trade ~~achieve~~relationships, ~~the~~any ~~operational~~of ~~improvements~~which ~~and~~may ~~efficiencies~~have ~~that~~a wesignificant ~~targeted~~adverse ineffect on our ~~restructuring~~business, ~~plans~~financial condition, and ~~operating~~results ~~model~~of ~~changes,~~operations. ~~which~~Economic ~~could~~uncertainty ~~adversely~~in ~~impact~~the ~~our~~United ~~results~~States ~~of operations~~ and ~~financial~~abroad ~~condition.~~has ~~Implementing~~led ~~any~~to ~~restructuring~~growing ~~plan~~concerns orabout ~~operating~~the ~~model~~systemic ~~change~~impact ~~presents~~of ~~significant~~rising ~~potential~~energy ~~risks including~~costs, ~~among~~geopolitical ~~others~~issues, ~~higher~~or ~~than~~the ~~anticipated~~availability ~~implementation~~and ~~costs,~~cost ~~management~~of ~~distraction~~credit ~~from~~and ~~ongoing~~higher ~~business~~interest ~~activities~~rates, ~~failure~~which tocould ~~maintain~~further ~~adequate~~lead ~~controls~~to ~~and~~increased ~~procedures~~market ~~while~~volatility, ~~executing~~decreased ~~our~~consumer ~~restructuring~~confidence, ~~plans~~ and ~~operating~~diminished ~~model~~growth ~~changes,~~expectations ~~damage~~in tothe ~~our~~U.S. ~~reputation~~economy and ~~brand~~abroad. ~~image~~As ~~and~~our ~~workforce~~customers ~~attrition~~react ~~beyond~~to ~~planned~~global ~~reductions.~~economic Ifconditions we ~~fail~~have toseen ~~achieve~~and ~~targeted~~may ~~operating~~see ~~improvements~~customers ~~and/or~~reduce ~~cost~~spending ~~reductions,~~on our ~~profitability~~products and ~~results~~take ofadditional ~~operations~~precautionary ~~could~~measures beto ~~negatively~~limit ~~impacted,~~or ~~which~~delay ~~may~~expenditures beand ~~dilutive~~preserve tocapital and liquidity, thereby adversely affecting our ~~earnings~~customers’ inability ~~the~~or ~~short~~willingness ~~term~~to purchase our products.

WeIn ~~face~~addition, ~~risks~~in ~~related~~late toFebruary 2026, the ~~uncertainty~~United ~~regarding~~States and Israel launched coordinated military strikes against Iran, which retaliated with missile attacks across the ~~future~~region. ofAlthough ~~international~~we ~~trade~~do ~~agreements~~not ~~and~~have material operations in the ~~United~~Middle ~~States’~~East, ~~position~~the onongoing ~~international~~conflict ~~trade.~~and ~~Significant~~any ~~political~~further escalation, including additional military actions, retaliatory measures, sanctions, disruptions to trade or transportation routes, ~~regulatory~~cyberattacks, ~~developments~~or other governmental or market responses, has caused, and ~~other~~could ~~circumstances~~continue ~~beyond~~to cause, significant disruptions of global energy supplies and increases in global energy prices, heightened inflationary pressures on our ~~control~~input costs and supply chain, ~~are~~negative ~~expected~~effects toon ~~have~~global asupply ~~material~~chains, energy markets, commodity prices, currency exchange rates, financial markets and overall macroeconomic conditions, and adversely impact customer spending patterns in markets in which we operate. While we expect the impacts of conflict between the United States, Israel, and Iran to continue to have an effect on our business, financial condition, and results of operations, if we are unable to ~~successfully~~predict ~~implement~~the ~~various~~extent ~~mitigating~~or ~~actions~~nature of these impacts at this time.

We sell products outside the United States through our multichannel global business model, and we rely on a network of global suppliers, primarily located in Asia. We estimate that Vietnam, Cambodia, Bangladesh, and India will collectively represent approximately 75%, and China less than 3%, of our product sourcing spend in fiscal 2025. In addition, 60% of the fabric that was used in the manufacture of our products in fiscal 2024 was sourced from China. As a result of the tariffs announced on April 2, 2025 by the Trump Administration, we are anticipating increased supply chain challenges, cost volatility, and consumer and economic uncertainty due to rapid changes in global trade policies. We continue to analyze the impact of these tariffs on our business and actions we can take to minimize their impact. We expect these new tariffs to have a material impact on our business and results of operations in fiscal year 2025 and in the longer term if we are unable to successfully implement various mitigating actions noted below.29

Uncertainty regarding policies of the Trump Administration with respect to the future of trade partnerships and relations, including as a result of the tariffs announced on April 2, 2025 and additional tariffs that may be announced or implemented in the future, are expected to impact our market share, revenue and gross margins and reduce our competitiveness in countries that will be affected by those policies. In addition, these developments may also negatively impact the carrying value of our reporting units and our indefinite-lived tradename assets.

As a result of the tariffs announced on April 2, 2025 or additional tariffs or other restrictions, quotas, embargoes, or safeguards that are placed on goods imported into the United States, or any related counter-measures that are taken by other countries, we expect to take actions which may include, but not be limited to, changes to our product assortments, cost sharing with our vendor partners, changes to the mix of production by country, and raising prices to end consumers and our wholesale customers. The actions that we take may not fully offset the impact of tariffs and, as a result, our market share, revenue, gross margins, and results of operations may be materially harmed.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Share Repurchases

The following table provides information about share repurchases during the first quarter of fiscal 2026:

The following table provides information about share repurchases during the third quarter of fiscal 2025:


Period	Total number of shares purchased(1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs(2)	Approximate dollar value of shares that may yet be purchased under the plans or programs(3)
January 4, 2026 through January 31, 2026	2,852	$	34.64	—	$	598,966,271

February 1, 2026 through February 28, 2026	53,097	$	38.83	—	$	598,966,271

March 1, 2026 through April 4, 2026	24,036	$	35.43	—	$	598,966,271

Total	79,985			—

Period	Total number of shares purchased(1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs(2)	Approximate dollar value of shares that may yet be purchased under the plans or programs(3)
June 29, 2025 through July 26, 2025	—	$	—	—	$	598,966,271
July 27, 2025 through August 23, 2025	6,238	$	25.21	—	$	598,966,271
August 24, 2025 through September 27, 2025	—	$	—	—	$	598,966,271
Total	6,238			—

(1)All the shares purchased represent shares of our common stock surrendered by our employees to satisfy required tax withholding upon the vesting of restricted stock awards between January 4, 2026 and April 4, 2026.

(12)~~All~~The ~~the~~Company ~~shares~~did ~~purchased~~not ~~represent~~repurchase shares in open market transactions during the first quarter of ~~our~~fiscal ~~common~~2026. ~~stock~~Refer ~~surrendered~~to bythe ~~our~~open ~~employees~~market repurchases as disclosed in Note 7, Common Stock, to ~~satisfy~~our ~~required~~accompanying ~~tax~~unaudited ~~withholding~~condensed ~~upon~~consolidated ~~the~~financial ~~vesting~~statements ofincluded ~~restricted~~in ~~stock~~Part ~~awards~~I. ~~between~~Item ~~July~~1 ~~27,~~of ~~2025~~this ~~and~~Quarterly ~~August~~Report ~~23,~~on ~~2025~~Form 10-Q.

(2)The Company did not repurchase shares in open market transactions during the third quarter of fiscal 2025. Refer to the open market repurchases as disclosed in Note 7, Common Stock, to our accompanying unaudited condensed consolidated financial statements included in Part I. Item 1 of this Quarterly Report on Form 10-Q.

(3)Under share repurchase authorizations approved by our Board of Directors. The share repurchase authorizations have no expiration date.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

N/A

ITEM 4. MINE SAFETY DISCLOSURES

N/A

ITEM 5. OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During the fiscal quarter ended ~~September~~April 274, ~~2025~~2026, none of the Company’s directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined under Item 408(a) of Regulation S-K.

4230

ITEM 6. EXHIBITS

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

Exhibit Number

Filing Date

Filed Herewith

3.1

Amended and Restated Certificate of Incorporation of Carter’s, Inc.

8-K

3.1

May 23, 2017

3.2

Amended and Restated By-Laws of Carter’s, Inc.

8-K

3.1

~~August~~November 1813, ~~2023~~2025

3.3

Certificate of Designation of the Series A Junior Participating Preferred Stock of the Company, dated September 24, 2025

8-A

3.1

September 24, 2025

10.1 *

Form of Restricted Stock Award Agreement (Time Vesting) (2026 Grants Before 2026 Amended Plan)

4.1

Stockholder Rights Agreement, dated as of September 22, 2025, by and between the Company and Equiniti Trust Company, LLC, as rights agent (which includes the Form of Rights Certificate as Exhibit B thereto)

8-A

4.1

September 24, 2025

10.2 *

Form of Restricted Stock Award Agreement (Two-Year Cliff Vesting) (2026 Grants Before 2026 Amended Plan)

10.1

Separation Agreement effective September 3, 2025, between The William Carter Company and Kendra D. Krugman

10.3 *

Form of Restricted Stock Award Agreement (Three-Year Cliff Vesting) (2026 Grants Before 2026 Amended Plan)

10.4 *

Form of Company Performance-Based Restricted Stock Agreement (2026 Grants before 2026 Amended Plan)

10.5 *

Form of rTSR Performance-Based Restricted Stock Agreement (2026 Grants before 2026 Amended Plan)

10.6 *

Offer Letter, dated April 27, 2026.

8-K

10.1

May 1, 2026

31.1

Rule 13a-15(e)/15d-15(e) and 13a-15(f)/15d-15(f) Certification.

31.2

Rule 13a-15(e)/15d-15(e) and 13a-15(f)/15d-15(f) Certification.

Section 1350 Certification.

101.INS

XBRL Instance Document - the instant document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

The cover page from this Current Report on Form 10-Q formatted as Inline XBRL

43* Indicates a management contract or compensatory plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CARTER’S, INC.

October 27, 2025			/s/ DOUGLAS C. PALLADINI
May 6, 2026			/s/ RICHARD F. WESTENBERGER
			Douglas C. Palladini
			Richard F. Westenberger
			Chief Executive Officer & President
			Interim Chief Executive Officer & President,
			(Principal Executive Officer)
			Chief Financial Officer & Chief Operating Officer
			(Principal Executive Officer & Principal Financial & Accounting Officer)

October 27, 2025			/s/ RICHARD F. WESTENBERGER
			Richard F. Westenberger
			Chief Financial Officer & Chief Operating Officer
			(Principal Financial & Accounting Officer)

Filing Compare · CARTERS INC