Carter's, Inc. (CRI): Business Model Canvas [Dec-2025 Updated]

You're looking at a 160-year-old children's apparel powerhouse navigating a tough retail climate, and honestly, its Business Model Canvas tells a clear story of survival through scale and cost control. As a former BlackRock analyst, I see a model heavily reliant on its $2.83 billion TTM revenue base (as of Q3 2025) driven by massive wholesale partnerships and over 1,000 stores, but the real tension is in managing costs-note the $317.96 million in SG&A for Q3 2025 alone, plus the tariff headwinds hitting operating income by up to $35 million this fiscal year. This canvas maps out how this legacy retailer maintains its value proposition of quality and safety while aggressively right-sizing its operations to keep those value-driven prices competitive for North American families. Dive in below to see exactly how they balance their iconic brand resources against the pressures of modern retail.

Carter's, Inc. (CRI) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships Carter's, Inc. (CRI) relies on to get product from factory floor to family closet. These aren't just casual acquaintances; these are deep, structural dependencies that define their market access and cost structure.

Contract Manufacturers in Asia for Sourcing

Carter's, Inc. predominantly sources its product volume through contract manufacturers located in Asia. This global sourcing strategy is a core component of managing cost, though it introduces exposure to international trade dynamics. For instance, in the third quarter of fiscal 2025, the gross impact of tariffs on gross margin was reported as $20 million. To counter these pressures, the world-class supply chain team realized meaningful duty reductions of more than $40 million year-to-date as of the Q3 2025 earnings call. This highlights the constant negotiation and optimization required with this key partner group.

Major North American Retailers for Exclusive Brands

A significant portion of Carter's, Inc.'s market penetration is achieved through exclusive brand partnerships with major North American retailers. These arrangements ensure high visibility and volume placement outside of their own stores. The multi-channel model is heavily reliant on these key accounts, which accounted for a portion of the $758 million in net sales reported for the third quarter of fiscal 2025.

Here is a breakdown of the primary exclusive brand distribution agreements:

• Walmart: Carries the Child of Mine brand exclusively.
• Target: Carries the Just One You brand exclusively.
• Amazon.com: Carries the Simple Joys brand exclusively.

This structure allows Carter's, Inc. to serve different consumer value points simultaneously. You can see the specific brand alignment here:

Logistics and Freight Providers for Global Supply Chain Distribution

Moving product from Asian manufacturing hubs to North American consumers requires a robust network of logistics partners. Carter's, Inc. operates directly or outsources distribution activities to third-party logistics providers in locations including California, Canada, China, Mexico, and Vietnam to support shipments into the United States and for international customers. Historically, the company has noted that disruptions, such as the insolvency of a major shipping company, have caused delays in product shipment, underscoring the risk inherent in relying on these external freight providers.

Industry Associations for Regulatory and Policy Engagement

While specific membership dues aren't public, engagement with industry associations like the American Apparel & Footwear Association (AAFA) and the Retail Industry Leaders Association (RILA) is crucial for navigating the regulatory environment. The impact of this engagement is indirectly visible through the company's response to trade policy. For example, the CEO noted that elevated product costs, partly due to higher tariffs, weighed meaningfully on profitability in Q3 2025. Effective partnership with these groups helps Carter's, Inc. advocate on issues that directly affect landed costs.

March of Dimes for Corporate Philanthropy and Brand Alignment

The partnership with March of Dimes is a key element for brand alignment with family values. In November 2025, recognizing Prematurity Awareness Month, the Carter's Charitable Foundation announced a donation of $50,000 to March of Dimes. This supports the organization's mission to improve the health of all moms and babies. This philanthropic effort ties directly to the product line, specifically the Preemie Collection, which was developed in collaboration with Neonatal Intensive Care Unit (NICU) nurses and families to provide comfort for the tiniest fighters.

Key data points on this partnership include:

• Donation Amount (November 2025): $50,000.
• National Preterm Birth Rate (2025 Report Card): 10.4%.
• Product Alignment: The Preemie Collection.

Finance: draft 13-week cash view by Friday.

Carter's, Inc. (CRI) - Canvas Business Model: Key Activities

The core engine of Carter's, Inc. involves the intricate process of bringing children's apparel from concept to the customer across a global footprint. This includes the design, sourcing, and global distribution of children's apparel. To maintain trust and quality, as of 2025, a massive 99% of Carter's, Inc. apparel products meet the OEKO-TEX® STANDARD 100 certification, meaning they are tested and certified free from thousands of harmful chemicals. The sourcing strategy is clearly defined for fiscal year 2025, with Vietnam, Cambodia, Bangladesh, and India expected to collectively account for approximately 75% of product sourcing spend, while China represents less than 3%.

A major focus area is optimizing product assortment by reducing complexity. Carter's, Inc. is actively pursuing a 20%-30% reduction in product choices, which is being paired with a unified global assortment and a goal to shorten the product development timeline by three months. This simplification is a direct response to the complexity noted in the product offering across categories, brands, and channels.

Strategic cost management and organizational right-sizing are critical activities given recent margin pressures, particularly from tariffs. Carter's, Inc. has committed to a significant acceleration of its productivity agenda. The company plans to reduce office-based roles by approximately 15%, equating to about 300 positions, by the end of 2025. This restructuring is projected to yield annualized savings of approximately $35 million beginning in 2026. Furthermore, the company is targeting more than $10 million in additional annual spending reductions across various SG&A categories, with these savings also commencing in 2026. The gross pre-mitigation estimate for the annualized incremental impact of higher tariffs is in the range of $200 million to $250 million. For context on recent performance headwinds, tariffs cut into gross margin by $20 million in the third quarter of fiscal 2025.

The physical footprint is undergoing a significant recalibration, moving away from operating over 1,000 company-owned retail stores in North America toward a more focused fleet. The plan now calls for closing approximately 150 underperforming North American stores at lease expiration over the next three years, an increase from the previously disclosed target of 100 closures. Approximately 100 of these closures are expected to occur over the fiscal year 2025 and 2026 periods, and new U.S. store openings under the current model are paused. As of September 19, 2025, there were 1,217 Carter's stores in the United States alone. The 150 stores slated for closure collectively represented about $110 million in annual net sales on a last 12 months basis.

Managing wholesale relationships with major national chains remains a vital component, anchored by the 'big 3': Walmart, Target, and Amazon. While the U.S. Wholesale segment saw a sales decrease of 5.1% in Q3 2025, the International segment showed strength, growing net sales by 4.9% in the same period. The company is actively managing its presence on Amazon, reducing the significance of the Simple Joys brand to focus on core brands. The international growth is partly driven by a high-performing partnership in Brazil, which operates 81 Carter's stores and more than 200 shop-in-shops.

Here is a summary of the key operational metrics and targets related to these activities:

The global distribution and sourcing structure is also undergoing refinement to support the product strategy:

• Product development timeline reduction goal: three months.
• Percentage of apparel meeting OEKO-TEX® STANDARD 100: 99%.
• Top 4 Sourcing Countries' Share of Spend (FY 2025 Est.): 75% (Vietnam, Cambodia, Bangladesh, India combined).
• China Sourcing Spend Share (FY 2025 Est.): Less than 3%.

The wholesale channel's reliance on key partners is evident, with the company focusing on its core brands within those relationships.

Carter's, Inc. (CRI) - Canvas Business Model: Key Resources

You're looking at the core assets Carter's, Inc. (CRI) relies on to operate and compete in the young children's apparel market as of late 2025. These aren't just things they own; these are the engines driving their business model.

The most visible resources are definitely the iconic brand portfolio. You have the flagship Carter's brand, the heritage of OshKosh B'gosh, and the modern appeal of Skip Hop. These names carry deep consumer trust built over a long legacy, which is a massive intangible asset.

Financially speaking, the scale of the business is reflected in its top-line performance and balance sheet strength. As of the third quarter of fiscal 2025, the Trailing Twelve Months (TTM) revenue stood at $2.83 billion. This revenue base supports the entire operation. Furthermore, the company's foundation, represented by its Total Assets, was approximately $2.469 billion as of the end of Q3 2025. This gives you a snapshot of the resources backing the business.

Here's a quick look at some of those key financial figures from the Q3 2025 period:

The physical and logistical assets are critical for getting product to the customer. Carter's, Inc. maintains an extensive multi-channel distribution network. This includes a significant physical footprint, operating over 1,000 stores across the U.S., Canada, and Mexico, alongside its direct-to-consumer e-commerce platforms. The e-commerce channel showed positive comparable sales growth in Q3 2025.

To support this network, the company relies heavily on its global sourcing and supply chain infrastructure in Asia. This is a key operational resource, though it's currently under pressure from tariffs. For fiscal year 2025, the company estimates its product sourcing spend is heavily concentrated in specific regions:

• Vietnam, Cambodia, Bangladesh, and India collectively represent approximately 75% of sourcing spend.
• China represents less than 3% of sourcing spend in fiscal year 2025.

These sourcing decisions are a direct reflection of managing the supply chain resource in the face of external factors, like the estimated annualized incremental tariff impact of $200 million to $250 million. The company is actively working to refine this by streamlining product choices, aiming to eliminate 20-30% of product options.

Finance: draft 13-week cash view by Friday.

Carter's, Inc. (CRI) - Canvas Business Model: Value Propositions

Trusted, 160-year-old brand legacy for quality and safety. Carter's, Inc. was established in 1865, building over a century of trust with families.

High-quality, durable, and comfortable apparel for young children is the core offering. The company is North America's largest branded marketer exclusively for babies and young children.

Value-driven pricing and frequent promotional offers are key levers. For instance, the quarterly dividend was reduced to $0.25 per common share in the second and third quarters of fiscal 2025, following a $0.80 per common share dividend in the first quarter of fiscal 2025. In the first quarter of fiscal 2025, adjusted operating margin decreased to 5.6% from 8.3% in the prior year period, principally due to pricing investments.

The product range is broad, covering essentials to gear under brands like Carter's, OshKosh B'gosh, Skip Hop, and Little Planet. The company operates over 1,000 Company-operated stores across the U.S., Canada, and Mexico.

The company returned $47 million to shareholders through dividends in the first three quarters of fiscal 2025. The Trailing Twelve Month (TTM) Revenue as of September 30, 2025, stood at $2.83 billion.

Here's a quick look at some key 2025 financial and operational figures that underpin the value proposition:

The product offering includes:

• Bodysuits and layette essentials.
• Playclothes and seasonal clothing.
• Gear for mealtime and travel (via Skip Hop).
• Apparel for newborns, babies, toddlers, and young children.

Carter's, Inc. (CRI) - Canvas Business Model: Customer Relationships

Brand loyalty built over generations of parents and grandparents is a core asset for Carter's, Inc. The company owns the Carter's and OshKosh B\'gosh brands, which are among the most recognized and trusted in North America for baby and young children's apparel. As of the end of 2023, Carter's was the #1 baby apparel brand in the U.S. for ages 0-12 months, holding 28% of that market. As of 30-Sep-2025, Carter's reported a trailing twelve-month revenue of $2.83B.

Direct-to-consumer engagement happens via a multi-channel approach including retail stores and e-commerce. The company shared that it welcomed more than 250 million visits in the past year across physical stores and digital platforms. The U.S. Retail segment showed stabilization in the second quarter of fiscal 2025. For the second quarter of fiscal 2025, net sales increased 3.7% year over year to $585.3 million, driven by the direct-to-consumer businesses.

Loyalty programs and targeted digital marketing campaigns are critical for engagement. As of 2025, over 90% of companies globally have implemented some form of loyalty or rewards program. For loyalty program owners, 88% believe micro-targeting positively impacts customer retention and satisfaction. Furthermore, 85% of customers report being more likely to shop with brands that offer loyalty rewards. You can expect that a significant portion of Carter's repeat business is fueled by these efforts.

Here's a quick look at the recent direct-to-consumer segment performance:

The omnichannel experience aims for seamless shopping across channels. In the first quarter of fiscal 2025, the U.S. Retail comparable net sales declined 5.2%, but eCommerce was noted as outperforming stores during that period. By the third quarter of fiscal 2025, the trend improved, with U.S. Retail comparable net sales showing a 2.0% increase, suggesting momentum in the integrated shopping journey.

Carter's, Inc. supports responsible recycling through its KIDCYCLE™ clothing takeback program. This program was relaunched in select stores in 2025 to help customers responsibly recycle outgrown clothing. This initiative directly engages the customer base around sustainability values.

Carter's, Inc. (CRI) - Canvas Business Model: Channels

You're looking at how Carter's, Inc. gets its products in front of parents and kids as of late 2025. It's a multi-channel approach, but the mix is definitely shifting under the pressure of costs, especially tariffs.

U.S. Wholesale segment (largest supplier to major retailers)

This channel remains a core part of the structure, supplying major national retailers. However, it saw a sales dip in the third quarter of fiscal 2025.

• U.S. Wholesale segment net sales decreased 5.1% in the third quarter of fiscal 2025 compared to the prior year period.
• Year-to-date through Q3 2025, U.S. Wholesale segment net sales decreased 3.9%.
• Department stores are projected to represent less than 20% of the overall Wholesale channel sales for the full fiscal year 2025.

U.S. Retail segment (company-operated stores)

The physical store fleet is undergoing a significant right-sizing initiative. While U.S. Retail segment sales showed some positive momentum in Q3 2025, the overall store count is decreasing.

The company is actively closing locations, having increased the target from 100 to about 150 stores over the next three years. Still, U.S. Retail comparable net sales showed positive trends in the second quarter of 2025, increasing 2.2%.

E-commerce websites (carters.com, oshkosh.com)

Digital platforms are a key driver, often outperforming the physical stores, especially in the first quarter of 2025.

• E-commerce was noted as outperforming stores in the first quarter of fiscal 2025.
• The company welcomed more than 250 million total visits across physical stores and digital platforms in the past year.

Exclusive wholesale brands (e.g., Just One You at Target)

Carter's, Inc. brands, including OshKosh B'gosh, are sold through major national retailers. The company is focused on refining product choices across all channels.

International Operations (retail, e-commerce, and wholesale)

International sales showed growth in the third quarter of 2025, with specific performance noted in key partnership markets.

The company is learning how to best generate global scale in international markets.

Carter's, Inc. (CRI) - Canvas Business Model: Customer Segments

North American families with babies and young children (0-8 years)

Carter's, Inc. is North America's largest and most-enduring apparel company exclusively for babies and young children. The company operates over 1,000 Company-operated stores in the United States, Canada, and Mexico, with over 1,065 retail stores in North America.

Value-conscious mass-market shoppers (via exclusive wholesale brands)

Carter's is the largest supplier of young children's apparel to the largest retailers in North America. Exclusive wholesale brands include Child of Mine at Walmart and Just One You at Target. The performance of this channel shows variability:

Eco-conscious consumers seeking organic options (Little Planet brand)

The Little Planet brand focuses on organic fabrics and sustainable materials. Strong sales of the Little Planet line indicate significant market for organic cotton clothing. The company is expanding high-margin assortments including Little Planet.

International consumers in key growth markets like Mexico and Brazil

The International segment shows growth momentum in key markets:

• International segment net sales increased 14.1% in Q2 Fiscal 2025.
• International segment net sales increased 4.4% in the first three quarters of Fiscal 2025.
• Q3 Fiscal 2025 showed particular strength in Mexico with a +19% comparable sales increase and growing demand in Brazil.
• Q1 Fiscal 2025 International segment net sales declined 4.9%.

Gift-givers and grandparents seeking trusted, recognizable brands

The company's brands have established a loyal customer base due to their reputation for quality and value. The company has a 160-year legacy.

The overall business performance across channels in Q3 Fiscal 2025 was:

• U.S. Retail net sales increased 0.6%.
• U.S. Retail comparable net sales declined 0.3%.
• U.S. Retail comparable net sales increased 2% in Q3.
• U.S. Retail net sales grew 3% in Q3.

Carter's, Inc. (CRI) - Canvas Business Model: Cost Structure

You're looking at the hard numbers that drive the cost side of Carter's, Inc.'s business model as of late 2025. It's a structure heavily influenced by global sourcing and the recent, sharp impact of trade policy.

The Cost of Goods Sold (COGS) is a primary driver, directly impacted by product costs and logistics. For the third quarter of fiscal 2025, the reported adjusted gross margin was 45.1%, meaning COGS, including product and freight, represented about 54.9% of net sales for that period. This margin was pressured by higher product costs and elevated inbound freight rates.

Selling, General, and Administrative (SG&A) expenses are a significant fixed and variable cost component. For the third quarter of 2025, the reported figure was $317.96 million [cite: Provided in prompt]. Carter's, Inc. reported adjusted SG&A of $308 million for Q3 2025, which was an 8% increase year-over-year, driven by higher store-based expenses, marketing, and variable compensation provisions.

The impact of Tariff Costs has become a major, volatile expense. As of Q3 2025, the effective duty rate on imports was in the high 30% range, a substantial jump from about 13% historically. The gross pre-mitigation annualized incremental impact from these higher tariffs is estimated to be between $200 million and $250 million. For the full fiscal year 2025, Carter's, Inc. estimated the net operating income impact to be in the range of $25 million to $35 million. In Q3 2025 alone, tariffs added approximately $20 million to gross margin pressure.

Store Operating Costs are tied to the physical footprint. As of the end of Q3 2025, Carter's, Inc. operated 1,065 locations across North America and Mexico, though the prompt specifies a general count of over 1,000 stores. These costs include rent, utilities, and payroll for this extensive network [cite: Provided in prompt].

To combat margin pressure, Carter's, Inc. initiated significant Restructuring Charges. In the third quarter of 2025, the company recorded a $6 million restructuring charge related to severance and employee separation costs. This is part of a broader plan to close approximately 150 low-margin stores over the next three years, with about 100 slated to close in fiscal years 2025 and 2026. The organizational cuts include reducing office-based roles by approximately 300 positions, or 15%, which is expected to generate annualized savings of about $35 million starting in 2026.

Here is a summary of key cost-related metrics from the Q3 2025 period:

The company is also targeting more than $10 million in other annual SG&A spending reductions, with those savings also set to begin in 2026.

Finance: draft 13-week cash view by Friday.

Carter's, Inc. (CRI) - Canvas Business Model: Revenue Streams

You're looking at how Carter's, Inc. (CRI) converts its operations into cash, and the latest numbers from late 2025 show a business heavily reliant on its domestic channels, though international growth is a bright spot. The total Trailing Twelve Months (TTM) revenue, as of September 2025, stood at a solid $2.83 billion.

The revenue streams are clearly segmented, reflecting the multi-channel approach Carter's, Inc. uses to get its baby and young children's apparel to the consumer. The third quarter of fiscal 2025, ending September 2025, saw consolidated net sales of $757.8 million, which was comparable to the prior year's third quarter. This top-line figure is composed of three primary segments, which you can see broken down below:

The U.S. Wholesale segment remains a major component, historically the largest, but it saw a 5.1% decrease in net sales for the third quarter. In contrast, the International segment showed definite strength, growing its net sales by 4.9% in Q3 2025, aligning with the growth trend mentioned for the year. The U.S. Retail channel, which includes both physical stores and e-commerce, posted a 2.6% increase in net sales for the quarter, with comparable net sales up 2.0%.

Beyond direct sales, Carter's, Inc. also generates revenue from licensing agreements, though a specific dollar amount for this stream isn't immediately available in the latest reports. Here are the key elements making up the revenue profile:

• U.S. Wholesale net sales (historically the largest segment)
• U.S. Retail net sales (stores and e-commerce)
• International segment net sales (growing at 4.9% in Q3 2025)
• Royalty income from international licensing agreements
• Total TTM revenue of $2.83 billion as of September 2025

The company's comparable retail sales growth of 2.0% in Q3 2025 suggests that the direct-to-consumer side is finding some traction, even as the wholesale channel faces headwinds. Honestly, you want to watch that International segment; it's the only one explicitly called out in your outline as growing at a specific rate for the quarter, coming in at 4.9%.