Carter’s Inc (CRI)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	336,215	359,517	498,584	191,046	365,569
Interest expense	US$ in thousands	33,973	42,781	60,294	56,062	37,617
Interest coverage		9.90	8.40	8.27	3.41	9.72

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $336,215K ÷ $33,973K
= 9.90

Carter’s Inc's interest coverage ratio has shown a generally positive trend over the past five years, starting at 9.72 in 2019 and rising to 9.90 in 2023. This indicates that the company has been more capable of meeting its interest obligations with its operating income over time.

The notable increase from 2020 to 2021, a jump from 3.41 to 8.27, suggests a significant improvement in the company's ability to cover its interest expenses. Although there was a slight dip in 2022 to 8.40, the ratio remained at a healthy level above 8.

This overall consistent and favorable trend in the interest coverage ratio signifies that Carter’s Inc has been effectively managing its interest payments relative to its earnings, providing a measure of financial strength and stability in servicing its debt obligations.