Carter’s, Inc. (CRI - Snapshot Report) analysts remain bullish on the retailer, despite the current economic woes. The stock continues to rise, but the upward estimate revisions are keeping valuations very attractive.Company Description
Carter's markets baby and young children's apparel in the U.S. The company's brands, which include OshKosh, Tykes and Child of Mine, are offered through department and retails stores.
Sales Up 13%
On Apr 28 Carter’s, Inc. reported first-quarter results that included sales of $409 million, a 14.5% since the same period one year ago.
Net income came in at $26.2 million, spiking almost 160%, year-over-year. Earnings broke down to 71 cents per share, topping the Zacks Consensus Estimate by 27 cents for a 61% surprise.
Estimates Spike
The strong results, combined with Carter’s, Inc.'s outlook led to sizable estimate revisions. The full-year consensus for 2010 is now $2.64, up from $2.39. This represents a 23% growth rate.
Forecasts for next year a up to $2.91, from $2.65, which would be just over a 10% growth rate. And these earnings and growth rates are coming at a pretty nice value to boot.
One negative about the earnings outlook is that the quarterly estimates are mixed. However, the remaining factors are enough for Carter's to keep its Zacks #1 Rank (Strong Buy).
Enticing Valuations
Shares of CRI are trading at just over 11 times the 2010 Zacks Consensus Estimate. As for the growth rates? Those are at a discounted as well, with a PEG ratio of 0.8 times.
The Chart
It is tought to see the big picture in an environment like this, but the bottom line is that estimate for Carter's are soaring. Even though shares have spiked as well the valuations justify the move and leave plenty more gains to be had.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service" style="border-top-style: none; border-right-style: none; border-bottom-style: none; border-left-style: none; cursor: pointer; ">
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