Carter’s Inc (CRI)

Interest coverage

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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 262,140 323,778 339,654 336,753 336,215 300,373 296,956 313,356 359,517 387,694 420,646 473,419 498,584 497,139 490,232 402,516 191,046 218,397 185,369 229,362
Interest expense (ttm) US$ in thousands 31,331 30,787 32,021 32,234 33,973 35,627 36,724 37,293 42,781 47,951 53,435 60,078 60,294 61,378 62,529 62,546 56,062 49,473 43,092 36,852
Interest coverage 8.37 10.52 10.61 10.45 9.90 8.43 8.09 8.40 8.40 8.09 7.87 7.88 8.27 8.10 7.84 6.44 3.41 4.41 4.30 6.22

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $262,140K ÷ $31,331K
= 8.37

The interest coverage ratio of Carter’s Inc has shown a stable and improving trend over the years, indicating the company's ability to meet its interest payments comfortably. The ratio started at 6.22 as of March 31, 2020, and dipped slightly in the subsequent quarters to a low of 3.41 by December 31, 2020. However, from March 31, 2021 onwards, the interest coverage ratio began to increase steadily, reaching a peak of 10.61 as of June 30, 2024.

This improvement in the interest coverage ratio implies that the company's operating income has been sufficient to cover its interest expenses, reflecting a strong financial position. The consistent upward trend in the interest coverage ratio indicates that Carter’s Inc has been managing its debt obligations effectively and generating enough earnings to comfortably cover its interest payments. Overall, the increasing trend in the interest coverage ratio demonstrates the company's improving financial health and ability to service its debt obligations.