Carter’s Inc (CRI)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 48.01% | 47.94% | 46.74% | 48.52% | 44.25% |
| Operating profit margin | 8.96% | 11.11% | 12.04% | 14.51% | 6.40% |
| Pretax margin | 8.12% | 10.38% | 10.05% | 12.79% | 4.55% |
| Net profit margin | 6.52% | 7.98% | 7.94% | 9.92% | 3.70% |
Carter’s Inc has shown a consistent improvement in its gross profit margin over the period from 2020 to 2024, increasing from 44.25% to 48.01%. This indicates that the company has been able to effectively manage its production costs and pricing strategies to generate higher profits on its sales.
However, the operating profit margin for Carter’s Inc has shown some fluctuation during the same period, peaking at 14.51% in 2021 but decreasing to 8.96% by the end of 2024. This may indicate that the company has experienced challenges in controlling its operating expenses or that it may have faced pricing pressure within the industry.
Similarly, the pretax margin for Carter’s Inc has varied over the years, with a peak of 12.79% in 2021 but declining to 8.12% in 2024. This suggests that the company's profitability before taxes has experienced some volatility, potentially due to changes in tax regulations or other factors impacting its pre-tax income.
Lastly, the net profit margin for Carter’s Inc has also shown a downward trend from 9.92% in 2021 to 6.52% in 2024. This indicates that after accounting for all expenses, including taxes, the company's bottom line profitability has decreased over the years.
Overall, while Carter’s Inc has demonstrated improvements in its gross profit margin, it is essential for the company to focus on managing its operating expenses and maintaining a healthy bottom line profitability to ensure sustainable growth and financial health in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.47% | 13.60% | 15.54% | 15.59% | 5.60% |
| Return on assets (ROA) | 7.62% | 9.77% | 10.25% | 10.66% | 3.23% |
| Return on total capital | 19.38% | 25.04% | 25.44% | 25.68% | 9.91% |
| Return on equity (ROE) | 21.71% | 27.51% | 31.40% | 35.76% | 11.70% |
Based on the provided data, let's analyze Carter’s Inc profitability ratios:
1. Operating Return on Assets (Operating ROA):
- On December 31, 2020, the Operating ROA was 5.60%. It indicates that for every dollar of assets, the company generated 5.60 cents in operating income.
- The Operating ROA increased significantly to 15.59% by December 31, 2021, showcasing improved operational efficiency.
- The ratio remained relatively stable around 15% in 2022 and 2023, before decreasing to 10.47% by the end of 2024. This may signify changes in the company's operating performance.
2. Return on Assets (ROA):
- The ROA on December 31, 2020, stood at 3.23%, showing that the company generated 3.23 cents in net income for every dollar of assets.
- The ROA improved steadily over the following years, reaching 10.66% by the end of 2021, indicating more effective utilization of assets.
- There was a slight decline in ROA to 7.62% by December 31, 2024, suggesting potential challenges in maintaining profitability relative to the asset base.
3. Return on Total Capital:
- The Return on Total Capital was 9.91% on December 31, 2020, showing the company’s ability to generate returns for both shareholders and debt holders.
- This ratio increased significantly to 25.68% by the end of 2021 and remained relatively stable around 25% in 2022 and 2023.
- However, by December 31, 2024, the Return on Total Capital decreased to 19.38%, indicating a potential decline in overall capital efficiency.
4. Return on Equity (ROE):
- The ROE on December 31, 2020, was 11.70%, suggesting that the company generated a return of 11.70 cents for every dollar of shareholder equity.
- The ROE experienced substantial growth, reaching 35.76% by the end of 2021, demonstrating improved profitability relative to shareholders' investment.
- The ratio declined gradually in the following years, with the ROE standing at 21.71% by December 31, 2024, indicating a lower return on equity compared to the previous years.
In conclusion, the profitability ratios of Carter’s Inc show varying trends over the years, with improvements seen in certain ratios while others experienced fluctuations or declines. Monitoring these ratios can provide insights into the company's financial performance and efficiency in utilizing its assets and capital.