"The 150 stores on the chopping block generated a combined $110 million in revenue, he explained, and the company expects a 20% transfer rate to nearby Carter's stores and its e-commerce channel. In other words, that's more revenue flowing through a footprint with lower fixed costs. "So leveraging the fixed cost and the asset base that's already in place-those tend to be pretty high margin flow-through," he said."
"Looking ahead, Westenberger said Carter's may actually benefit from increasing costs in the year ahead, as the impact of tariffs is spread across the industry. The macro assumption underpinning this idea is that "everyone in the industry is going to be raising their prices," he said. "So we don't believe we're going to be an outlier." As a result, he added, "more will be driven by pricing in 2026 and less by units.""
Carter's is closing 150 North American stores to generate savings and improve profitability after flat Q3 net sales and a 4% decline in gross profit. The company will close low-margin stores, right-size the organization, and narrow product assortments to become more competitive. The 150 stores produced about $110 million in revenue, with an expected 20% transfer rate to nearby Carter's locations and e-commerce, increasing revenue through lower fixed-cost footprints. Management expects industry-wide tariff-driven price increases, forecasting pricing to drive performance in 2026 rather than unit growth, potentially shifting retailer strategies and affecting inflation dynamics.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]