Carter’s will shutter approximately 150 underperforming North American stores at lease expiration over the next three years, an increase from the retailer’s previously disclosed target of 100 store closures. The baby and children’s apparel retailer, which operates 1,000+ stores total, also plans to cut about 300 office positions, or 15% of its corporate workforce, by the end of 2025. Additionally, Carters is looking to make more than $10 million in annual spending reductions across multiple categories, with these savings beginning in 2026.
“Our third quarter performance reflected continued improvement in U.S. retail business demand as we achieved positive comparable sales and improved pricing for the second consecutive quarter,” said Douglas Palladini, CEO and President of Carter’s in a statement discussing the retailer’s Q3 financial results. “However, elevated product costs, in part due to the impact of higher tariffs, as well as additional investment, weighed meaningfully on our profitability.
“While we are steadying our business in 2025, there’s still meaningful work to do for Carter’s to unlock its full potential in terms of exceeding both consumer and shareholder expectations,” Palladini added. “We are pursuing several initiatives, including closing low-margin retail stores, right-sizing our organization and honing product choices, which we believe will generate significant savings, improve overall cost structure and provide investment capacity.”
For Q3, Carter’s net sales decreased by 0.1% to $757.8 million, compared to $758.5 million during Q3 2024. Sales results were brought down by a net sales decrease of 5.1% in the U.S. wholesale segment, but offset by U.S. retail and international segment sales increases of 2.6% and 4.9%, respectively. Retail comparable net sales increased 2% during this period compared to the same period last year.
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In December 2024 Carter’s implemented a fresh direction and new product assortments as it sought to appeal to the new cohort of Gen Z parents. Carter’s tapped Douglas Palladini from Vans as its new President and CEO in March 2025 to support the retailer’s growth goals.
