Carter’s Inc (CRI)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Inventory turnover 1.67 1.17 1.21 1.61 1.40 1.07 1.02 1.24 1.02 2.30 1.89 1.85 1.96 1.27 1.79 2.01 2.10 2.79 2.77 3.51
Receivables turnover 14.60 11.38 21.48 12.85 15.84 12.33 22.54 13.71 15.86 12.41 18.28 12.87 14.81 12.84 20.40 13.05 16.05 11.85 19.30 15.37
Payables turnover 3.38 2.58 2.31 3.98 3.11 2.99 2.47 4.21 2.87 6.49 3.98 4.44 3.12 2.36 3.10 3.36 2.67 3.81 4.07 10.62
Working capital turnover 4.49 4.79 4.95 4.82 4.94 4.91 5.67 4.86 4.78 4.15 4.75 5.07 2.90 2.56 2.49 2.49 2.60 3.01 2.69 2.93

Based on the data provided, let's analyze the activity ratios of Carter’s Inc:

1. Inventory Turnover:
- The inventory turnover ratio indicates how many times a company sells and replaces its inventory during a specific period.
- Carter’s Inc's inventory turnover has fluctuated over the years, starting at 3.51 in March 2020 and reaching a low of 1.02 in December 2022 before slightly increasing to 1.67 by December 2024.
- A decreasing trend in inventory turnover may suggest slower sales or excess inventory levels, which could tie up working capital.

2. Receivables Turnover:
- The receivables turnover ratio measures how efficiently a company collects its outstanding receivables from customers.
- Carter’s Inc's receivables turnover has shown variability, ranging from 11.38 in September 2024 to 22.54 in June 30, 2023.
- A higher receivables turnover ratio indicates faster collection of receivables, which is generally favorable for cash flow management.

3. Payables Turnover:
- The payables turnover ratio assesses the speed at which a company pays off its suppliers or trade payables.
- Carter’s Inc's payables turnover ratio has ranged from a low of 2.31 in June 30, 2024 to a high of 10.62 in March 31, 2020.
- A higher payables turnover ratio may suggest that the company is efficiently managing its payables by paying suppliers promptly.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales.
- Carter’s Inc's working capital turnover has shown a relatively stable pattern, staying between 2.49 and 5.67 over the given period.
- A higher working capital turnover ratio indicates that the company efficiently invests in working capital to drive sales growth.

In conclusion, analyzing these activity ratios can provide insights into how effectively Carter’s Inc manages its inventory, receivables, payables, and working capital to support its operations and drive financial performance.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Days of inventory on hand (DOH) days 218.71 313.27 301.94 226.61 260.21 340.58 357.66 295.06 358.60 159.01 192.83 196.78 185.90 287.12 204.27 182.04 173.64 130.74 131.72 103.86
Days of sales outstanding (DSO) days 25.00 32.07 16.99 28.41 23.04 29.61 16.19 26.62 23.01 29.42 19.97 28.35 24.65 28.42 17.89 27.98 22.74 30.79 18.91 23.75
Number of days of payables days 108.07 141.27 158.10 91.63 117.31 121.93 147.63 86.60 127.18 56.23 91.67 82.23 116.82 154.50 117.63 108.71 136.81 95.73 89.76 34.35

Carter's Inc activity ratios provide insights into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH): This ratio measures how many days it takes for the company to sell its inventory. The trend for Carter's Inc shows some fluctuations over time, ranging from a low of 103.86 days on March 31, 2020, to a peak of 358.60 days on December 31, 2022. A lower DOH indicates faster inventory turnover, which is generally favorable as it reduces storage costs and the risk of obsolescence.

2. Days of Sales Outstanding (DSO): DSO indicates the average number of days it takes for the company to collect revenue after a sale is made. Carter's Inc has also experienced fluctuations in this ratio, with a low of 16.19 days on June 30, 2023, and a high of 32.07 days on September 30, 2024. A lower DSO reflects efficient credit management and faster cash conversion from sales.

3. Number of Days of Payables: This ratio measures how long it takes for the company to pay its suppliers. Carter's Inc has seen varying trends in this ratio, from a low of 56.23 days on September 30, 2022, to a high of 158.10 days on June 30, 2024. A longer payable period can indicate good liquidity management, but it may also strain relationships with suppliers if it becomes too extended.

Analyzing these activity ratios collectively can provide a comprehensive view of Carter's Inc's efficiency in managing its inventory, collecting revenue, and handling payables, which are essential aspects of its overall financial performance and operational effectiveness.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Fixed asset turnover 15.72 15.42 15.65 15.77 15.90 16.39 16.79 17.02 16.60 18.15 18.00 17.32 15.86 15.33 14.42 12.60 11.41 11.36 11.10 11.22
Total asset turnover 1.17 1.18 1.21 1.26 1.22 1.28 1.31 1.34 1.29 1.27 1.31 1.16 1.07 1.02 1.01 0.95 0.88 0.95 0.94 1.08

Carter’s Inc's fixed asset turnover ratio has shown a consistent increasing trend over the years, indicating that the company is generating more revenue from its fixed assets. The ratio increased from 11.22 in March 2020 to 17.02 in March 2023, before slightly decreasing to 15.72 in December 2024. This suggests that Carter’s Inc has been efficiently utilizing its fixed assets to generate sales.

In contrast, the total asset turnover ratio has fluctuated over the years, with some periods showing an increase and others a decrease. The ratio ranged from 0.88 in December 2020 to 1.34 in March 2023. This indicates that the company's ability to generate sales from its total assets has varied over the years.

Overall, the increasing trend in the fixed asset turnover ratio reflects Carter’s Inc's ability to efficiently utilize its fixed assets to drive sales growth, while the fluctuating total asset turnover ratio highlights the variability in the company's overall asset efficiency.