x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 3, 2015 OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____
TO ______
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Delaware
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13-3912933
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(state or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Common Stock
|
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Outstanding Shares at October 23, 2015
|
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Common stock, par value $0.01 per share
|
|
51,990,421
|
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Page
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Unaudited Condensed Consolidated Balance Sheets as of October 3, 2015, January 3, 2015, and September 27, 2014
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Unaudited Condensed Consolidated Statements of Operations for the fiscal quarter and three fiscal quarters ended October 3, 2015 and September 27, 2014
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Unaudited Condensed Consolidated Statements of Comprehensive Income for the fiscal quarter and three fiscal quarters ended October 3, 2015 and September 27, 2014
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Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three fiscal quarters ended October 3, 2015
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Unaudited Condensed Consolidated Statements of Cash Flows for the three fiscal quarters ended October 3, 2015 and September 27, 2014
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Item 1
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Item 3
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Defaults upon Senior Securities
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|||
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|||
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|||
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October 3, 2015
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January 3, 2015
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September 27, 2014
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||||||
ASSETS
|
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|
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|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
288,260
|
|
|
$
|
340,638
|
|
|
$
|
133,646
|
|
Accounts receivable, net
|
246,565
|
|
|
184,563
|
|
|
232,478
|
|
|||
Finished goods inventories
|
511,520
|
|
|
444,844
|
|
|
519,416
|
|
|||
Prepaid expenses and other current assets
|
37,260
|
|
|
34,788
|
|
|
31,258
|
|
|||
Deferred income taxes
|
34,895
|
|
|
36,625
|
|
|
38,569
|
|
|||
Total current assets
|
1,118,500
|
|
|
1,041,458
|
|
|
955,367
|
|
|||
Property, plant, and equipment, net of accumulated depreciation of $276,230, $245,011, and $245,778
|
361,305
|
|
|
333,097
|
|
|
332,875
|
|
|||
Tradenames and other intangibles, net
|
311,842
|
|
|
317,297
|
|
|
316,046
|
|
|||
Goodwill
|
176,633
|
|
|
181,975
|
|
|
184,196
|
|
|||
Deferred debt issuance costs, net
|
7,235
|
|
|
6,677
|
|
|
7,043
|
|
|||
Other assets
|
12,525
|
|
|
12,592
|
|
|
11,214
|
|
|||
Total assets
|
$
|
1,988,040
|
|
|
$
|
1,893,096
|
|
|
$
|
1,806,741
|
|
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|
|
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|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
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|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
173,594
|
|
|
$
|
150,243
|
|
|
$
|
117,329
|
|
Other current liabilities
|
105,199
|
|
|
97,728
|
|
|
100,473
|
|
|||
Total current liabilities
|
278,793
|
|
|
247,971
|
|
|
217,802
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt
|
585,278
|
|
|
586,000
|
|
|
586,000
|
|
|||
Deferred income taxes
|
119,499
|
|
|
121,536
|
|
|
113,173
|
|
|||
Other long-term liabilities
|
161,527
|
|
|
150,905
|
|
|
138,185
|
|
|||
Total liabilities
|
$
|
1,145,097
|
|
|
$
|
1,106,412
|
|
|
$
|
1,055,160
|
|
|
|
|
|
|
|
||||||
Commitments and contingencies - Note 13
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||||||
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||||||
Stockholders' equity:
|
|
|
|
|
|
||||||
Preferred stock; par value $.01 per share; 100,000 shares authorized; none issued or outstanding at October 3, 2015, January 3, 2015, and September 27, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, voting; par value $.01 per share; 150,000,000 shares authorized; 52,076,784, 52,712,193, and 52,977,519 shares issued and outstanding at October 3, 2015, January 3, 2015 and September 27, 2014, respectively
|
521
|
|
|
527
|
|
|
530
|
|
|||
Additional paid-in capital
|
—
|
|
|
—
|
|
|
—
|
|
|||
Accumulated other comprehensive loss
|
(33,480
|
)
|
|
(23,037
|
)
|
|
(13,627
|
)
|
|||
Retained earnings
|
875,902
|
|
|
809,194
|
|
|
764,678
|
|
|||
Total stockholders' equity
|
842,943
|
|
|
786,684
|
|
|
751,581
|
|
|||
Total liabilities and stockholders' equity
|
$
|
1,988,040
|
|
|
$
|
1,893,096
|
|
|
$
|
1,806,741
|
|
|
Fiscal quarter ended
|
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Three fiscal quarters ended
|
||||||||||||
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October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||||
Net sales
|
$
|
849,806
|
|
|
$
|
798,936
|
|
|
$
|
2,147,335
|
|
|
$
|
2,024,645
|
|
Cost of goods sold
|
502,267
|
|
|
477,730
|
|
|
1,252,849
|
|
|
1,196,237
|
|
||||
Gross profit
|
347,539
|
|
|
321,206
|
|
|
894,486
|
|
|
828,408
|
|
||||
Selling, general, and administrative expenses
|
230,017
|
|
|
221,939
|
|
|
650,496
|
|
|
638,349
|
|
||||
Royalty income
|
(12,699
|
)
|
|
(11,190
|
)
|
|
(32,688
|
)
|
|
(29,276
|
)
|
||||
Operating income
|
130,221
|
|
|
110,457
|
|
|
276,678
|
|
|
219,335
|
|
||||
Interest expense
|
6,907
|
|
|
6,843
|
|
|
20,534
|
|
|
20,623
|
|
||||
Interest income
|
(91
|
)
|
|
(45
|
)
|
|
(385
|
)
|
|
(317
|
)
|
||||
Other (income) expense, net
|
(622
|
)
|
|
1,311
|
|
|
(560
|
)
|
|
1,718
|
|
||||
Income before income taxes
|
124,027
|
|
|
102,348
|
|
|
257,089
|
|
|
197,311
|
|
||||
Provision for income taxes
|
44,701
|
|
|
36,462
|
|
|
91,866
|
|
|
71,232
|
|
||||
Net income
|
$
|
79,326
|
|
|
$
|
65,886
|
|
|
$
|
165,223
|
|
|
$
|
126,079
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per common share
|
$
|
1.52
|
|
|
$
|
1.24
|
|
|
$
|
3.15
|
|
|
$
|
2.36
|
|
Diluted net income per common share
|
$
|
1.51
|
|
|
$
|
1.23
|
|
|
$
|
3.12
|
|
|
$
|
2.34
|
|
Dividend declared and paid per common share
|
$
|
0.22
|
|
|
$
|
0.19
|
|
|
$
|
0.66
|
|
|
$
|
0.57
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
|
||||||||||||
|
October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
|
||||||||
Net income
|
$
|
79,326
|
|
|
$
|
65,886
|
|
|
$
|
165,223
|
|
|
$
|
126,079
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(4,205
|
)
|
|
(3,577
|
)
|
|
(10,443
|
)
|
|
(3,545
|
)
|
|
||||
Comprehensive income
|
$
|
75,121
|
|
|
$
|
62,309
|
|
|
$
|
154,780
|
|
|
$
|
122,534
|
|
|
|
Common stock - shares
|
|
Common
stock - $
|
|
Additional
paid-in
capital
|
|
Accumulated other comprehensive
loss
|
|
Retained
earnings
|
|
Total
stockholders’
equity
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at January 3, 2015
|
52,712,193
|
|
|
$
|
527
|
|
|
$
|
—
|
|
|
$
|
(23,037
|
)
|
|
$
|
809,194
|
|
|
$
|
786,684
|
|
Income tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
7,963
|
|
|
—
|
|
|
—
|
|
|
7,963
|
|
|||||
Exercise of stock options
|
169,850
|
|
|
2
|
|
|
5,741
|
|
|
—
|
|
|
—
|
|
|
5,743
|
|
|||||
Withholdings from vesting of restricted stock
|
(146,467
|
)
|
|
(1
|
)
|
|
(12,574
|
)
|
|
—
|
|
|
—
|
|
|
(12,575
|
)
|
|||||
Restricted stock activity
|
125,300
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
12,209
|
|
|
—
|
|
|
—
|
|
|
12,209
|
|
|||||
Issuance of common stock
|
10,933
|
|
|
—
|
|
|
1,095
|
|
|
—
|
|
|
—
|
|
|
1,095
|
|
|||||
Repurchase of common stock
|
(795,025
|
)
|
|
(8
|
)
|
|
(14,433
|
)
|
|
—
|
|
|
(63,898
|
)
|
|
(78,339
|
)
|
|||||
Cash dividends declared and paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,617
|
)
|
|
(34,617
|
)
|
|||||
Comprehensive income (loss)
|
—
|
|
|
—
|
|
|
|
|
(10,443
|
)
|
|
165,223
|
|
|
154,780
|
|
||||||
Balance at October 3, 2015
|
52,076,784
|
|
|
$
|
521
|
|
|
$
|
—
|
|
|
$
|
(33,480
|
)
|
|
$
|
875,902
|
|
|
$
|
842,943
|
|
|
Three fiscal quarters ended
|
||||||
|
October 3, 2015
|
|
September 27, 2014
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
165,223
|
|
|
$
|
126,079
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
44,187
|
|
|
42,831
|
|
||
Amortization of tradenames
|
5,422
|
|
|
14,157
|
|
||
Accretion of contingent consideration
|
809
|
|
|
900
|
|
||
Amortization of debt issuance costs
|
1,246
|
|
|
1,144
|
|
||
Non-cash stock-based compensation expense
|
13,304
|
|
|
13,883
|
|
||
Unrealized foreign currency exchange loss, net
|
221
|
|
|
—
|
|
||
Income tax benefit from stock-based compensation
|
(7,963
|
)
|
|
(4,356
|
)
|
||
Loss on disposal of property, plant, and equipment
|
80
|
|
|
541
|
|
||
Deferred income taxes
|
(1,801
|
)
|
|
(8,963
|
)
|
||
Effect of changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(61,108
|
)
|
|
(39,133
|
)
|
||
Finished goods inventories
|
(73,724
|
)
|
|
(104,143
|
)
|
||
Prepaid expenses and other assets
|
(3,144
|
)
|
|
2,373
|
|
||
Accounts payable and other liabilities
|
63,282
|
|
|
(20,386
|
)
|
||
Net cash provided by operating activities
|
146,034
|
|
|
24,927
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(76,987
|
)
|
|
(83,634
|
)
|
||
Proceeds from sale of property, plant, and equipment
|
66
|
|
|
143
|
|
||
Net cash used in investing activities
|
(76,921
|
)
|
|
(83,491
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Payments of debt issuance costs
|
(1,495
|
)
|
|
(145
|
)
|
||
Borrowings under secured revolving credit facility
|
205,586
|
|
|
—
|
|
||
Payments on secured revolving credit facility
|
(205,237
|
)
|
|
—
|
|
||
Repurchase of common stock
|
(78,339
|
)
|
|
(62,769
|
)
|
||
Payment of contingent consideration
|
(7,572
|
)
|
|
(8,901
|
)
|
||
Dividends paid
|
(34,617
|
)
|
|
(30,453
|
)
|
||
Income tax benefit from stock-based compensation
|
7,963
|
|
|
4,356
|
|
||
Withholdings from vesting of restricted stock
|
(12,575
|
)
|
|
(4,472
|
)
|
||
Proceeds from exercise of stock options
|
5,743
|
|
|
7,771
|
|
||
Net cash used in financing activities
|
(120,543
|
)
|
|
(94,613
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(948
|
)
|
|
277
|
|
||
Net decrease in cash and cash equivalents
|
(52,378
|
)
|
|
(152,900
|
)
|
||
Cash and cash equivalents, beginning of period
|
340,638
|
|
|
286,546
|
|
||
Cash and cash equivalents, end of period
|
$
|
288,260
|
|
|
$
|
133,646
|
|
(dollars in thousands)
|
October 3, 2015
|
|
January 3, 2015
|
|
September 27, 2014
|
||||||
Cumulative foreign currency translation adjustments
|
$
|
(25,840
|
)
|
|
$
|
(15,397
|
)
|
|
$
|
(11,097
|
)
|
Pension and post-retirement liability adjustments
|
(7,640
|
)
|
|
(7,640
|
)
|
|
(2,530
|
)
|
|||
Total accumulated other comprehensive loss
|
$
|
(33,480
|
)
|
|
$
|
(23,037
|
)
|
|
$
|
(13,627
|
)
|
|
|
|
October 3, 2015
|
|
January 3, 2015
|
||||||||||||||||||||
(dollars in thousands)
|
Weighted-average useful life
|
|
Gross amount
|
|
Accumulated amortization
|
|
Net amount
|
|
Gross amount
|
|
Accumulated amortization
|
|
Net amount
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Carter’s goodwill
|
Indefinite
|
|
$
|
136,570
|
|
|
$
|
—
|
|
|
$
|
136,570
|
|
|
$
|
136,570
|
|
|
$
|
—
|
|
|
$
|
136,570
|
|
Bonnie Togs goodwill
|
Indefinite
|
|
40,063
|
|
|
—
|
|
|
40,063
|
|
|
45,405
|
|
|
—
|
|
|
45,405
|
|
||||||
Total goodwill
|
|
|
$
|
176,633
|
|
|
$
|
—
|
|
|
$
|
176,633
|
|
|
$
|
181,975
|
|
|
$
|
—
|
|
|
$
|
181,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carter’s
tradename
|
Indefinite
|
|
$
|
220,233
|
|
|
$
|
—
|
|
|
$
|
220,233
|
|
|
$
|
220,233
|
|
|
$
|
—
|
|
|
$
|
220,233
|
|
OshKosh
tradename
|
Indefinite
|
|
85,500
|
|
|
—
|
|
|
85,500
|
|
|
85,500
|
|
|
—
|
|
|
85,500
|
|
||||||
Other tradenames
|
2-20 years
|
|
42,012
|
|
|
35,903
|
|
|
6,109
|
|
|
42,073
|
|
|
30,541
|
|
|
11,532
|
|
||||||
Total tradenames
|
|
|
347,745
|
|
|
35,903
|
|
|
311,842
|
|
|
347,806
|
|
|
30,541
|
|
|
317,265
|
|
||||||
Non-compete agreements
|
4 years
|
|
208
|
|
|
208
|
|
|
—
|
|
|
257
|
|
|
225
|
|
|
32
|
|
||||||
Total tradenames and other intangibles, net
|
|
|
$
|
347,953
|
|
|
$
|
36,111
|
|
|
$
|
311,842
|
|
|
$
|
348,063
|
|
|
$
|
30,766
|
|
|
$
|
317,297
|
|
|
|
|
September 27, 2014
|
||||||||||
(dollars in thousands)
|
Weighted-average useful life
|
|
Gross amount
|
|
Accumulated amortization
|
|
Net amount
|
||||||
|
|
|
|
|
|
|
|
||||||
Carter’s goodwill
|
Indefinite
|
|
$
|
136,570
|
|
|
$
|
—
|
|
|
$
|
136,570
|
|
Bonnie Togs goodwill
|
Indefinite
|
|
47,626
|
|
|
—
|
|
|
47,626
|
|
|||
Total goodwill
|
|
|
$
|
184,196
|
|
|
$
|
—
|
|
|
$
|
184,196
|
|
|
|
|
|
|
|
|
|
||||||
Carter’s
tradename
|
Indefinite
|
|
$
|
220,233
|
|
|
$
|
—
|
|
|
$
|
220,233
|
|
OshKosh
tradename
|
Indefinite
|
|
85,500
|
|
|
—
|
|
|
85,500
|
|
|||
Other tradenames
|
2-3 years
|
|
38,548
|
|
|
28,286
|
|
|
10,262
|
|
|||
Total tradenames
|
|
|
344,281
|
|
|
28,286
|
|
|
315,995
|
|
|||
Non-compete agreements
|
4 years
|
|
270
|
|
|
219
|
|
|
51
|
|
|||
Total tradenames and other intangibles, net
|
|
|
$
|
344,551
|
|
|
$
|
28,505
|
|
|
$
|
316,046
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
|
October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||||
Number of shares repurchased
|
290,800
|
|
|
367,948
|
|
|
795,025
|
|
|
867,099
|
|
||||
Aggregate cost of shares repurchased - in millions $
|
$
|
29.4
|
|
|
$
|
26.7
|
|
|
$
|
78.3
|
|
|
$
|
62.8
|
|
Average price per share
|
$
|
101.26
|
|
|
$
|
72.54
|
|
|
$
|
98.54
|
|
|
$
|
72.39
|
|
(dollars in thousands)
|
October 3, 2015
|
|
January 3, 2015
|
|
September 27, 2014
|
||||||
Senior notes
|
$
|
400,000
|
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Secured revolving credit facility
|
185,278
|
|
|
186,000
|
|
|
186,000
|
|
|||
Total long-term debt
|
$
|
585,278
|
|
|
$
|
586,000
|
|
|
$
|
586,000
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(dollars in thousands)
|
October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||||
Stock options
|
$
|
1,015
|
|
|
$
|
1,039
|
|
|
$
|
3,359
|
|
|
$
|
3,498
|
|
Restricted stock:
|
|
|
|
|
|
|
|
||||||||
Time-based awards
|
1,599
|
|
|
1,576
|
|
|
5,294
|
|
|
5,215
|
|
||||
Performance-based awards
|
1,130
|
|
|
1,439
|
|
|
3,556
|
|
|
4,089
|
|
||||
Stock awards
|
—
|
|
|
—
|
|
|
1,095
|
|
|
1,081
|
|
||||
Total
|
$
|
3,744
|
|
|
$
|
4,054
|
|
|
$
|
13,304
|
|
|
$
|
13,883
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(dollars in thousands)
|
October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||||
Interest cost
|
$
|
623
|
|
|
$
|
622
|
|
|
$
|
1,869
|
|
|
$
|
1,866
|
|
Expected return on plan assets
|
(785
|
)
|
|
(798
|
)
|
|
(2,355
|
)
|
|
(2,394
|
)
|
||||
Recognized actuarial loss
|
161
|
|
|
21
|
|
|
483
|
|
|
63
|
|
||||
Net periodic pension (benefit) cost
|
$
|
(1
|
)
|
|
$
|
(155
|
)
|
|
$
|
(3
|
)
|
|
$
|
(465
|
)
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(dollars in thousands)
|
October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Service cost – benefits attributed to service during the period
|
$
|
32
|
|
|
$
|
28
|
|
|
$
|
96
|
|
|
$
|
84
|
|
Interest cost on accumulated post-retirement benefit obligation
|
45
|
|
|
57
|
|
|
135
|
|
|
171
|
|
||||
Amortization net actuarial gain
|
(48
|
)
|
|
(52
|
)
|
|
(144
|
)
|
|
(156
|
)
|
||||
Curtailment gain
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
(66
|
)
|
||||
Total net periodic post-retirement benefit cost
|
$
|
29
|
|
|
$
|
11
|
|
|
$
|
87
|
|
|
$
|
33
|
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(dollars in thousands)
|
|
October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||||
Balance at the beginning of period
|
|
$
|
9,022
|
|
|
$
|
16,848
|
|
|
$
|
7,711
|
|
|
$
|
16,348
|
|
Payments made
|
|
(8,568
|
)
|
|
(8,901
|
)
|
|
(8,568
|
)
|
|
(8,901
|
)
|
||||
Accretion
|
|
—
|
|
|
444
|
|
|
809
|
|
|
900
|
|
||||
Foreign currency translation adjustment
|
|
(454
|
)
|
|
(762
|
)
|
|
(1,029
|
)
|
|
(718
|
)
|
||||
Final contingent adjustment
|
|
—
|
|
|
—
|
|
|
1,077
|
|
|
—
|
|
||||
Balance at the end of period
|
|
$
|
—
|
|
|
$
|
7,629
|
|
|
$
|
—
|
|
|
$
|
7,629
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
|
October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic number of common shares outstanding
|
51,740,523
|
|
|
52,356,122
|
|
|
51,960,041
|
|
|
52,788,217
|
|
||||
Dilutive effect of equity awards
|
507,815
|
|
|
470,842
|
|
|
512,861
|
|
|
476,893
|
|
||||
Diluted number of common and common equivalent shares outstanding
|
52,248,338
|
|
|
52,826,964
|
|
|
52,472,902
|
|
|
53,265,110
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Basic net income per common share (in thousands, except per share data):
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
79,326
|
|
|
$
|
65,886
|
|
|
$
|
165,223
|
|
|
$
|
126,079
|
|
Income allocated to participating securities
|
(675
|
)
|
|
(887
|
)
|
|
(1,557
|
)
|
|
(1,706
|
)
|
||||
Net income available to common shareholders
|
$
|
78,651
|
|
|
$
|
64,999
|
|
|
$
|
163,666
|
|
|
$
|
124,373
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per common share
|
$
|
1.52
|
|
|
$
|
1.24
|
|
|
$
|
3.15
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per common share (in thousands, except per share data):
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
79,326
|
|
|
$
|
65,886
|
|
|
$
|
165,223
|
|
|
$
|
126,079
|
|
Income allocated to participating securities
|
(669
|
)
|
|
(880
|
)
|
|
(1,545
|
)
|
|
(1,695
|
)
|
||||
Net income available to common shareholders
|
$
|
78,657
|
|
|
$
|
65,006
|
|
|
$
|
163,678
|
|
|
$
|
124,384
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per common share
|
$
|
1.51
|
|
|
$
|
1.23
|
|
|
$
|
3.12
|
|
|
$
|
2.34
|
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares excluded from dilutive earnings per share computation
|
177,300
|
|
|
234,700
|
|
|
180,000
|
|
|
265,000
|
|
(dollars in thousands)
|
October 3, 2015
|
|
January 3, 2015
|
|
September 27, 2014
|
||||||
Accrued bonuses and incentive compensation
|
$
|
12,574
|
|
|
$
|
18,875
|
|
|
$
|
11,793
|
|
Contingent consideration
|
—
|
|
|
7,711
|
|
|
7,629
|
|
|||
Income taxes payable
|
25,902
|
|
|
692
|
|
|
19,609
|
|
|||
Accrued workers' compensation
|
1,840
|
|
|
2,662
|
|
|
2,853
|
|
|||
Accrued interest
|
2,771
|
|
|
8,106
|
|
|
2,746
|
|
|||
Accrued sales and use taxes
|
7,421
|
|
|
5,318
|
|
|
8,037
|
|
|||
Accrued salaries and wages
|
9,615
|
|
|
3,576
|
|
|
2,968
|
|
|||
Accrued gift certificates
|
9,356
|
|
|
10,100
|
|
|
8,863
|
|
|||
Accrued employee benefits
|
10,102
|
|
|
17,132
|
|
|
11,481
|
|
|||
Accrued and deferred rent
|
12,286
|
|
|
11,879
|
|
|
10,981
|
|
|||
Other current liabilities
|
13,332
|
|
|
11,677
|
|
|
13,513
|
|
|||
Total
|
$
|
105,199
|
|
|
$
|
97,728
|
|
|
$
|
100,473
|
|
(dollars in thousands)
|
October 3, 2015
|
|
January 3, 2015
|
|
September 27, 2014
|
||||||
Deferred lease incentives
|
$
|
70,778
|
|
|
$
|
67,205
|
|
|
$
|
65,731
|
|
Accrued and deferred rent
|
47,554
|
|
|
40,656
|
|
|
38,812
|
|
|||
Accrued workers' compensation
|
6,016
|
|
|
4,717
|
|
|
4,270
|
|
|||
OshKosh pension plan
|
11,029
|
|
|
11,031
|
|
|
3,303
|
|
|||
Unrecognized tax benefits
|
10,540
|
|
|
12,230
|
|
|
12,928
|
|
|||
Post-retirement life and medical plan
|
4,731
|
|
|
4,731
|
|
|
5,458
|
|
|||
Deferred compensation
|
8,932
|
|
|
8,388
|
|
|
7,578
|
|
|||
Other
|
1,947
|
|
|
1,947
|
|
|
105
|
|
|||
Total
|
$
|
161,527
|
|
|
$
|
150,905
|
|
|
$
|
138,185
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||||||||||||||
(dollars in thousands)
|
October 3,
2015 |
|
% of
Total Net Sales |
|
September 27,
2014 |
|
% of
Total Net Sales |
|
October 3,
2015 |
|
% of
Total Net Sales |
|
September 27,
2014 |
|
% of
Total Net Sales |
||||||||||||
Net sales
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carter’s Wholesale
|
$
|
343,555
|
|
|
40.4
|
%
|
|
$
|
309,772
|
|
|
38.8
|
%
|
|
$
|
824,600
|
|
|
38.4
|
%
|
|
$
|
781,460
|
|
|
38.6
|
%
|
Carter’s Retail (a)
|
294,928
|
|
|
34.7
|
%
|
|
281,455
|
|
|
35.2
|
%
|
|
799,635
|
|
|
37.2
|
%
|
|
745,473
|
|
|
36.8
|
%
|
||||
Total Carter’s (U.S.)
|
638,483
|
|
|
75.1
|
%
|
|
591,227
|
|
|
74.0
|
%
|
|
1,624,235
|
|
|
75.6
|
%
|
|
1,526,933
|
|
|
75.4
|
%
|
||||
OshKosh Retail (a)
|
98,292
|
|
|
11.6
|
%
|
|
91,427
|
|
|
11.4
|
%
|
|
244,787
|
|
|
11.4
|
%
|
|
222,500
|
|
|
11.0
|
%
|
||||
OshKosh Wholesale
|
18,794
|
|
|
2.2
|
%
|
|
25,107
|
|
|
3.1
|
%
|
|
49,151
|
|
|
2.3
|
%
|
|
52,342
|
|
|
2.6
|
%
|
||||
Total OshKosh (U.S.)
|
117,086
|
|
|
13.8
|
%
|
|
116,534
|
|
|
14.5
|
%
|
|
293,938
|
|
|
13.7
|
%
|
|
274,842
|
|
|
13.6
|
%
|
||||
International (b)
|
94,237
|
|
|
11.1
|
%
|
|
91,175
|
|
|
11.5
|
%
|
|
229,162
|
|
|
10.7
|
%
|
|
222,870
|
|
|
11.0
|
%
|
||||
Total net sales
|
$
|
849,806
|
|
|
100.0
|
%
|
|
$
|
798,936
|
|
|
100.0
|
%
|
|
$
|
2,147,335
|
|
|
100.0
|
%
|
|
$
|
2,024,645
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss)
:
|
|
|
% of
Segment
Net Sales
|
|
|
|
% of
Segment
Net Sales
|
|
|
|
% of
Segment Net Sales |
|
|
|
% of
Segment Net Sales |
||||||||||||
Carter’s Wholesale
|
$
|
74,347
|
|
|
21.6
|
%
|
|
$
|
55,762
|
|
|
18.0
|
%
|
|
$
|
172,485
|
|
|
20.9
|
%
|
|
$
|
133,489
|
|
|
17.1
|
%
|
Carter’s Retail (a)
|
51,733
|
|
|
17.5
|
%
|
|
54,501
|
|
|
19.4
|
%
|
|
134,557
|
|
|
16.8
|
%
|
|
137,659
|
|
|
18.5
|
%
|
||||
Total Carter’s (U.S.)
|
126,080
|
|
|
19.7
|
%
|
|
110,263
|
|
|
18.6
|
%
|
|
307,042
|
|
|
18.9
|
%
|
|
271,148
|
|
|
17.8
|
%
|
||||
OshKosh Retail (a)
|
6,171
|
|
|
6.3
|
%
|
|
5,300
|
|
|
5.8
|
%
|
|
3,396
|
|
|
1.4
|
%
|
|
(883
|
)
|
|
(0.4
|
)%
|
||||
OshKosh Wholesale
|
4,487
|
|
|
23.9
|
%
|
|
2,240
|
|
|
8.9
|
%
|
|
9,715
|
|
|
19.8
|
%
|
|
5,125
|
|
|
9.8
|
%
|
||||
Total OshKosh (U.S.)
|
10,658
|
|
|
9.1
|
%
|
|
7,540
|
|
|
6.5
|
%
|
|
13,111
|
|
|
4.5
|
%
|
|
4,242
|
|
|
1.5
|
%
|
||||
International (b) (c)
|
18,220
|
|
|
19.3
|
%
|
|
15,896
|
|
|
17.4
|
%
|
|
30,967
|
|
|
13.5
|
%
|
|
27,039
|
|
|
12.1
|
%
|
||||
Corporate expenses (d) (e)
|
(24,737
|
)
|
|
|
|
|
(23,242
|
)
|
|
|
|
|
(74,442
|
)
|
|
|
|
|
(83,094
|
)
|
|
|
|
||||
Total operating income
|
$
|
130,221
|
|
|
15.3
|
%
|
|
$
|
110,457
|
|
|
13.8
|
%
|
|
$
|
276,678
|
|
|
12.9
|
%
|
|
$
|
219,335
|
|
|
10.8
|
%
|
(a)
|
Includes eCommerce results.
|
(b)
|
Net sales include international retail, eCommerce, and wholesale sales. Operating income includes international licensing income.
|
(c)
|
Includes charges associated with the revaluation of the Company's contingent consideration related to the Company's 2011 acquisition of Bonnie Togs of approximately
$1.9 million
for the three-fiscal-quarter period ended
October 3, 2015
, and
$0.4 million
and
$0.9 million
for the fiscal quarter and the three-fiscal-quarter period ended
September 27, 2014
, respectively. Also includes expenses of approximately
$0.5 million
for the three quarters of fiscal 2014 related to the Company's 2014 exit from Japan retail operations.
|
(d)
|
Corporate expenses include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, building occupancy, information technology, certain legal fees, consulting, and audit fees.
|
(e)
|
Includes the following charges:
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(dollars in millions)
|
October 3, 2015
|
|
September 27, 2014
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||||
Closure of distribution facility in Hogansville, GA (1)
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
Office consolidation costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
Amortization of tradenames
|
$
|
1.0
|
|
|
$
|
2.3
|
|
|
$
|
5.4
|
|
|
$
|
14.2
|
|
(1)
|
Continuing operating costs associated with the closure of the Company's distribution facility in Hogansville, Georgia. This facility was sold in December 2014.
|
(dollars in millions)
|
Severance
|
|
Other closure costs
|
|
Total
|
||||||
Balance at January 3, 2015
|
$
|
0.8
|
|
|
$
|
2.8
|
|
|
$
|
3.6
|
|
Payments during fiscal 2015
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(1.1
|
)
|
|||
Balance at October 3, 2015
|
$
|
0.3
|
|
|
$
|
2.2
|
|
|
$
|
2.5
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
539,181
|
|
|
$
|
427,028
|
|
|
$
|
71,068
|
|
|
$
|
(187,471
|
)
|
|
$
|
849,806
|
|
Cost of goods sold
|
—
|
|
|
380,427
|
|
|
263,009
|
|
|
39,180
|
|
|
(180,349
|
)
|
|
502,267
|
|
||||||
Gross profit
|
—
|
|
|
158,754
|
|
|
164,019
|
|
|
31,888
|
|
|
(7,122
|
)
|
|
347,539
|
|
||||||
Selling, general, and administrative expenses
|
—
|
|
|
49,317
|
|
|
169,379
|
|
|
20,708
|
|
|
(9,387
|
)
|
|
230,017
|
|
||||||
Royalty income
|
—
|
|
|
(9,175
|
)
|
|
(5,983
|
)
|
|
—
|
|
|
2,459
|
|
|
(12,699
|
)
|
||||||
Operating income (loss)
|
—
|
|
|
118,612
|
|
|
623
|
|
|
11,180
|
|
|
(194
|
)
|
|
130,221
|
|
||||||
Interest expense
|
—
|
|
|
6,754
|
|
|
1,318
|
|
|
169
|
|
|
(1,334
|
)
|
|
6,907
|
|
||||||
Interest income
|
—
|
|
|
(1,400
|
)
|
|
—
|
|
|
(25
|
)
|
|
1,334
|
|
|
(91
|
)
|
||||||
(Income) loss in subsidiaries
|
(79,326
|
)
|
|
(1,645
|
)
|
|
(3,904
|
)
|
|
—
|
|
|
84,875
|
|
|
—
|
|
||||||
Other expense (income), net
|
—
|
|
|
251
|
|
|
(269
|
)
|
|
(604
|
)
|
|
—
|
|
|
(622
|
)
|
||||||
Income (loss) before income taxes
|
79,326
|
|
|
114,652
|
|
|
3,478
|
|
|
11,640
|
|
|
(85,069
|
)
|
|
124,027
|
|
||||||
Provision for income taxes
|
—
|
|
|
35,132
|
|
|
6,098
|
|
|
3,471
|
|
|
—
|
|
|
44,701
|
|
||||||
Net income (loss)
|
$
|
79,326
|
|
|
$
|
79,520
|
|
|
$
|
(2,620
|
)
|
|
$
|
8,169
|
|
|
$
|
(85,069
|
)
|
|
$
|
79,326
|
|
|
Parent
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
523,572
|
|
|
$
|
410,161
|
|
|
$
|
66,731
|
|
|
$
|
(201,528
|
)
|
|
$
|
798,936
|
|
Cost of goods sold
|
—
|
|
|
372,575
|
|
|
248,442
|
|
|
39,513
|
|
|
(182,800
|
)
|
|
477,730
|
|
||||||
Gross profit
|
—
|
|
|
150,997
|
|
|
161,719
|
|
|
27,218
|
|
|
(18,728
|
)
|
|
321,206
|
|
||||||
Selling, general, and administrative expenses
|
—
|
|
|
54,524
|
|
|
154,631
|
|
|
20,618
|
|
|
(7,834
|
)
|
|
221,939
|
|
||||||
Royalty income
|
—
|
|
|
(8,607
|
)
|
|
(5,628
|
)
|
|
—
|
|
|
3,045
|
|
|
(11,190
|
)
|
||||||
Operating income (loss)
|
—
|
|
|
105,080
|
|
|
12,716
|
|
|
6,600
|
|
|
(13,939
|
)
|
|
110,457
|
|
||||||
Interest expense
|
—
|
|
|
6,841
|
|
|
1,298
|
|
|
145
|
|
|
(1,441
|
)
|
|
6,843
|
|
||||||
Interest income
|
—
|
|
|
(1,465
|
)
|
|
—
|
|
|
(21
|
)
|
|
1,441
|
|
|
(45
|
)
|
||||||
(Income) loss in subsidiaries
|
(65,886
|
)
|
|
(5,451
|
)
|
|
(3,256
|
)
|
|
—
|
|
|
74,593
|
|
|
—
|
|
||||||
Other (income) expense, net
|
—
|
|
|
(89
|
)
|
|
93
|
|
|
1,307
|
|
|
—
|
|
|
1,311
|
|
||||||
Income (loss) before income taxes
|
65,886
|
|
|
105,244
|
|
|
14,581
|
|
|
5,169
|
|
|
(88,532
|
)
|
|
102,348
|
|
||||||
Provision for income taxes
|
—
|
|
|
25,419
|
|
|
9,648
|
|
|
1,395
|
|
|
—
|
|
|
36,462
|
|
||||||
Net income (loss)
|
$
|
65,886
|
|
|
$
|
79,825
|
|
|
$
|
4,933
|
|
|
$
|
3,774
|
|
|
$
|
(88,532
|
)
|
|
$
|
65,886
|
|
|
Parent
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,336,785
|
|
|
$
|
1,137,585
|
|
|
$
|
170,826
|
|
|
$
|
(497,861
|
)
|
|
$
|
2,147,335
|
|
Cost of goods sold
|
—
|
|
|
932,937
|
|
|
699,769
|
|
|
96,788
|
|
|
(476,645
|
)
|
|
1,252,849
|
|
||||||
Gross profit
|
—
|
|
|
403,848
|
|
|
437,816
|
|
|
74,038
|
|
|
(21,216
|
)
|
|
894,486
|
|
||||||
Selling, general, and administrative expenses
|
—
|
|
|
133,733
|
|
|
484,278
|
|
|
62,208
|
|
|
(29,723
|
)
|
|
650,496
|
|
||||||
Royalty income
|
—
|
|
|
(24,555
|
)
|
|
(14,462
|
)
|
|
—
|
|
|
6,329
|
|
|
(32,688
|
)
|
||||||
Operating income (loss)
|
—
|
|
|
294,670
|
|
|
(32,000
|
)
|
|
11,830
|
|
|
2,178
|
|
|
276,678
|
|
||||||
Interest expense
|
—
|
|
|
20,189
|
|
|
3,994
|
|
|
425
|
|
|
(4,074
|
)
|
|
20,534
|
|
||||||
Interest income
|
—
|
|
|
(4,402
|
)
|
|
—
|
|
|
(57
|
)
|
|
4,074
|
|
|
(385
|
)
|
||||||
(Income) loss in subsidiaries
|
(165,223
|
)
|
|
31,055
|
|
|
(7,466
|
)
|
|
—
|
|
|
141,634
|
|
|
—
|
|
||||||
Other expense (income), net
|
—
|
|
|
56
|
|
|
(106
|
)
|
|
(510
|
)
|
|
—
|
|
|
(560
|
)
|
||||||
Income (loss) before income taxes
|
165,223
|
|
|
247,772
|
|
|
(28,422
|
)
|
|
11,972
|
|
|
(139,456
|
)
|
|
257,089
|
|
||||||
Provision for income taxes
|
—
|
|
|
84,727
|
|
|
3,211
|
|
|
3,928
|
|
|
—
|
|
|
91,866
|
|
||||||
Net income (loss)
|
$
|
165,223
|
|
|
$
|
163,045
|
|
|
$
|
(31,633
|
)
|
|
$
|
8,044
|
|
|
$
|
(139,456
|
)
|
|
$
|
165,223
|
|
|
Parent
|
|
Subsidiary
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,269,456
|
|
|
$
|
1,057,542
|
|
|
$
|
164,894
|
|
|
$
|
(467,247
|
)
|
|
$
|
2,024,645
|
|
Cost of goods sold
|
—
|
|
|
913,112
|
|
|
624,036
|
|
|
95,317
|
|
|
(436,228
|
)
|
|
1,196,237
|
|
||||||
Gross profit
|
—
|
|
|
356,344
|
|
|
433,506
|
|
|
69,577
|
|
|
(31,019
|
)
|
|
828,408
|
|
||||||
Selling, general, and administrative expenses
|
—
|
|
|
144,119
|
|
|
454,600
|
|
|
64,020
|
|
|
(24,390
|
)
|
|
638,349
|
|
||||||
Royalty income
|
—
|
|
|
(22,584
|
)
|
|
(13,823
|
)
|
|
—
|
|
|
7,131
|
|
|
(29,276
|
)
|
||||||
Operating income (loss)
|
—
|
|
|
234,809
|
|
|
(7,271
|
)
|
|
5,557
|
|
|
(13,760
|
)
|
|
219,335
|
|
||||||
Interest expense
|
—
|
|
|
20,620
|
|
|
3,909
|
|
|
189
|
|
|
(4,095
|
)
|
|
20,623
|
|
||||||
Interest income
|
—
|
|
|
(4,386
|
)
|
|
—
|
|
|
(26
|
)
|
|
4,095
|
|
|
(317
|
)
|
||||||
(Income) loss in subsidiaries
|
(126,079
|
)
|
|
25,344
|
|
|
(10,034
|
)
|
|
—
|
|
|
110,769
|
|
|
—
|
|
||||||
Other (income) expense, net
|
—
|
|
|
(224
|
)
|
|
208
|
|
|
1,734
|
|
|
—
|
|
|
1,718
|
|
||||||
Income (loss) before income taxes
|
126,079
|
|
|
193,455
|
|
|
(1,354
|
)
|
|
3,660
|
|
|
(124,529
|
)
|
|
197,311
|
|
||||||
Provision for income taxes
|
—
|
|
|
53,616
|
|
|
15,569
|
|
|
2,047
|
|
|
—
|
|
|
71,232
|
|
||||||
Net income (loss)
|
$
|
126,079
|
|
|
$
|
139,839
|
|
|
$
|
(16,923
|
)
|
|
$
|
1,613
|
|
|
$
|
(124,529
|
)
|
|
$
|
126,079
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income (loss)
|
|
$
|
79,326
|
|
|
$
|
79,520
|
|
|
$
|
(2,620
|
)
|
|
$
|
8,169
|
|
|
$
|
(85,069
|
)
|
|
$
|
79,326
|
|
Foreign currency translation adjustments
|
|
(4,205
|
)
|
|
(4,205
|
)
|
|
(69
|
)
|
|
(4,205
|
)
|
|
8,479
|
|
|
(4,205
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
75,121
|
|
|
$
|
75,315
|
|
|
$
|
(2,689
|
)
|
|
$
|
3,964
|
|
|
$
|
(76,590
|
)
|
|
$
|
75,121
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income (loss)
|
|
$
|
65,886
|
|
|
$
|
79,825
|
|
|
$
|
4,933
|
|
|
$
|
3,774
|
|
|
$
|
(88,532
|
)
|
|
$
|
65,886
|
|
Foreign currency translation adjustments
|
|
(3,577
|
)
|
|
(3,577
|
)
|
|
(7
|
)
|
|
(3,577
|
)
|
|
7,161
|
|
|
(3,577
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
62,309
|
|
|
$
|
76,248
|
|
|
$
|
4,926
|
|
|
$
|
197
|
|
|
$
|
(81,371
|
)
|
|
$
|
62,309
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income (loss)
|
|
$
|
165,223
|
|
|
$
|
163,045
|
|
|
$
|
(31,633
|
)
|
|
$
|
8,044
|
|
|
$
|
(139,456
|
)
|
|
$
|
165,223
|
|
Foreign currency translation adjustments
|
|
(10,443
|
)
|
|
(10,443
|
)
|
|
(38
|
)
|
|
(10,443
|
)
|
|
20,924
|
|
|
(10,443
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
154,780
|
|
|
$
|
152,602
|
|
|
$
|
(31,671
|
)
|
|
$
|
(2,399
|
)
|
|
$
|
(118,532
|
)
|
|
$
|
154,780
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income (loss)
|
|
$
|
126,079
|
|
|
$
|
139,839
|
|
|
$
|
(16,923
|
)
|
|
$
|
1,613
|
|
|
$
|
(124,529
|
)
|
|
$
|
126,079
|
|
Foreign currency translation adjustments
|
|
(3,545
|
)
|
|
(3,545
|
)
|
|
(140
|
)
|
|
(3,545
|
)
|
|
7,230
|
|
|
(3,545
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
122,534
|
|
|
$
|
136,294
|
|
|
$
|
(17,063
|
)
|
|
$
|
(1,932
|
)
|
|
$
|
(117,299
|
)
|
|
$
|
122,534
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Cash flows provided by operating activities:
|
|
$
|
—
|
|
|
$
|
85,213
|
|
|
$
|
38,022
|
|
|
$
|
22,799
|
|
|
$
|
—
|
|
|
$
|
146,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
—
|
|
|
(21,953
|
)
|
|
(46,876
|
)
|
|
(8,158
|
)
|
|
—
|
|
|
(76,987
|
)
|
||||||
Intercompany investing activity
|
|
119,788
|
|
|
4,357
|
|
|
(2,607
|
)
|
|
(8,582
|
)
|
|
(112,956
|
)
|
|
—
|
|
||||||
Issuance of intercompany loan
|
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
||||||
Proceeds from repayment of intercompany loan
|
|
—
|
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
|
—
|
|
||||||
Proceeds from sale of property, plant and equipment
|
|
—
|
|
|
59
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
66
|
|
||||||
Net cash provided by (used in) investing activities
|
|
119,788
|
|
|
(12,537
|
)
|
|
(49,483
|
)
|
|
(16,733
|
)
|
|
(117,956
|
)
|
|
(76,921
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany financing activity
|
|
—
|
|
|
(127,475
|
)
|
|
15,846
|
|
|
(1,327
|
)
|
|
112,956
|
|
|
—
|
|
||||||
Repayment of intercompany loan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
|
20,000
|
|
|
—
|
|
||||||
Borrowings from intercompany loan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
|
(15,000
|
)
|
|
—
|
|
||||||
Borrowings under secured revolving credit facility
|
|
—
|
|
|
166,000
|
|
|
—
|
|
|
39,586
|
|
|
—
|
|
|
205,586
|
|
||||||
Payments on secured revolving credit facility
|
|
—
|
|
|
(186,000
|
)
|
|
—
|
|
|
(19,237
|
)
|
|
—
|
|
|
(205,237
|
)
|
||||||
Payment of debt issuance costs
|
|
—
|
|
|
(1,495
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,495
|
)
|
||||||
Payment of contingent consideration
|
|
—
|
|
|
(7,572
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,572
|
)
|
||||||
Dividends paid
|
|
(34,617
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,617
|
)
|
||||||
Repurchase of common stock
|
|
(78,339
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78,339
|
)
|
||||||
Income tax benefit from stock-based compensation
|
|
—
|
|
|
5,356
|
|
|
2,607
|
|
|
—
|
|
|
—
|
|
|
7,963
|
|
||||||
Withholdings from vesting of restricted stock
|
|
(12,575
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,575
|
)
|
||||||
Proceeds from exercise of stock options
|
|
5,743
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,743
|
|
||||||
Net cash (used in) provided by financing activities
|
|
(119,788
|
)
|
|
(151,186
|
)
|
|
18,453
|
|
|
14,022
|
|
|
117,956
|
|
|
(120,543
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(948
|
)
|
|
—
|
|
|
(948
|
)
|
||||||
Net (decrease) increase in cash and cash equivalents
|
|
—
|
|
|
(78,510
|
)
|
|
6,992
|
|
|
19,140
|
|
|
—
|
|
|
(52,378
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
311,078
|
|
|
10,442
|
|
|
19,118
|
|
|
—
|
|
|
340,638
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
—
|
|
|
$
|
232,568
|
|
|
$
|
17,434
|
|
|
$
|
38,258
|
|
|
$
|
—
|
|
|
$
|
288,260
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
—
|
|
|
$
|
23,632
|
|
|
$
|
9,458
|
|
|
$
|
(8,163
|
)
|
|
$
|
—
|
|
|
$
|
24,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
—
|
|
|
(38,659
|
)
|
|
(37,123
|
)
|
|
(7,852
|
)
|
|
—
|
|
|
(83,634
|
)
|
||||||
Intercompany investing activity
|
|
89,923
|
|
|
14,700
|
|
|
(2,502
|
)
|
|
(8,901
|
)
|
|
(93,220
|
)
|
|
—
|
|
||||||
Issuance of intercompany loan
|
|
—
|
|
|
(35,000
|
)
|
|
—
|
|
|
—
|
|
|
35,000
|
|
|
—
|
|
||||||
Proceeds from sale of property, plant and equipment
|
|
—
|
|
|
140
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
143
|
|
||||||
Net cash provided by (used in) investing activities
|
|
89,923
|
|
|
(58,819
|
)
|
|
(39,625
|
)
|
|
(16,750
|
)
|
|
(58,220
|
)
|
|
(83,491
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany financing activity
|
|
—
|
|
|
(129,182
|
)
|
|
33,373
|
|
|
2,589
|
|
|
93,220
|
|
|
—
|
|
||||||
Proceeds from intercompany loan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,000
|
|
|
(35,000
|
)
|
|
—
|
|
||||||
Dividends Paid
|
|
(30,453
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,453
|
)
|
||||||
Payment on debt issuance costs
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
||||||
Payment of contingent consideration
|
|
—
|
|
|
(8,901
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,901
|
)
|
||||||
Income tax benefit from stock-based compensation
|
|
—
|
|
|
1,854
|
|
|
2,502
|
|
|
—
|
|
|
—
|
|
|
4,356
|
|
||||||
Repurchase of common stock
|
|
(62,769
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,769
|
)
|
||||||
Withholdings from vesting of restricted stock
|
|
(4,472
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,472
|
)
|
||||||
Proceeds from exercise of stock options
|
|
7,771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,771
|
|
||||||
Net cash (used in) provided by financing activities
|
|
(89,923
|
)
|
|
(136,374
|
)
|
|
35,875
|
|
|
37,589
|
|
|
58,220
|
|
|
(94,613
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277
|
|
|
—
|
|
|
277
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
|
—
|
|
|
(171,561
|
)
|
|
5,708
|
|
|
12,953
|
|
|
—
|
|
|
(152,900
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
278,260
|
|
|
—
|
|
|
8,286
|
|
|
—
|
|
|
286,546
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
—
|
|
|
$
|
106,699
|
|
|
$
|
5,708
|
|
|
$
|
21,239
|
|
|
$
|
—
|
|
|
$
|
133,646
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||
|
October 3,
2015 |
|
September 27,
2014 |
|
October 3,
2015 |
|
September 27,
2014 |
||||
|
|
|
|
|
|
|
|
||||
Net sales
|
|
|
|
|
|
|
|
||||
Carter’s Wholesale
|
40.4
|
%
|
|
38.8
|
%
|
|
38.4
|
%
|
|
38.6
|
%
|
Carter’s Retail
|
34.7
|
%
|
|
35.2
|
%
|
|
37.2
|
%
|
|
36.8
|
%
|
Total Carter’s (U.S.)
|
75.1
|
%
|
|
74.0
|
%
|
|
75.6
|
%
|
|
75.4
|
%
|
|
|
|
|
|
|
|
|
||||
OshKosh Retail
|
11.6
|
%
|
|
11.4
|
%
|
|
11.4
|
%
|
|
11.0
|
%
|
OshKosh Wholesale
|
2.2
|
%
|
|
3.1
|
%
|
|
2.3
|
%
|
|
2.6
|
%
|
Total OshKosh (U.S.)
|
13.8
|
%
|
|
14.5
|
%
|
|
13.7
|
%
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
||||
International
|
11.1
|
%
|
|
11.5
|
%
|
|
10.7
|
%
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
||||
Consolidated net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
59.1
|
%
|
|
59.8
|
%
|
|
58.3
|
%
|
|
59.1
|
%
|
|
|
|
|
|
|
|
|
||||
Gross margin
|
40.9
|
%
|
|
40.2
|
%
|
|
41.7
|
%
|
|
40.9
|
%
|
Selling, general, and administrative expenses
|
27.1
|
%
|
|
27.8
|
%
|
|
30.3
|
%
|
|
31.5
|
%
|
Royalty Income
|
(1.5
|
)%
|
|
(1.4
|
)%
|
|
(1.5
|
)%
|
|
(1.4
|
)%
|
|
|
|
|
|
|
|
|
||||
Operating income
|
15.3
|
%
|
|
13.8
|
%
|
|
12.9
|
%
|
|
10.8
|
%
|
Interest expense
|
0.8
|
%
|
|
0.9
|
%
|
|
1.0
|
%
|
|
1.0
|
%
|
Interest income
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other expense (income), net
|
(0.1
|
)%
|
|
0.1
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
||||
Income before income taxes
|
14.6
|
%
|
|
12.8
|
%
|
|
11.9
|
%
|
|
9.7
|
%
|
Provision for income taxes
|
5.3
|
%
|
|
4.6
|
%
|
|
4.2
|
%
|
|
3.5
|
%
|
Net income
|
9.3
|
%
|
|
8.2
|
%
|
|
7.7
|
%
|
|
6.2
|
%
|
|
|
|
|
|
|
|
|
||||
Number of retail stores at end of period:
|
|
|
|
|
|
|
|||||
Carter’s - U.S.
|
|
|
|
|
577
|
|
|
525
|
|
||
OshKosh - U.S.
|
|
|
|
|
232
|
|
|
195
|
|
||
Canada
|
|
|
|
|
140
|
|
|
115
|
|
||
Total retail stores
|
|
|
|
|
|
949
|
|
|
835
|
|
|
|
|
Carter's Retail
|
|
OshKosh Retail
|
|
Canada
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
Third quarter of fiscal 2015:
|
|
|
|
|
|
|
|
|
|
|
Openings
|
|
15
|
|
12
|
|
7
|
|
34
|
|
Closings
|
|
—
|
|
1
|
|
—
|
|
1
|
Three quarters of fiscal 2015:
|
|
|
|
|
|
|
|
|
|
|
Openings
|
|
48
|
|
36
|
|
16
|
|
100
|
|
Closings
|
|
2
|
|
4
|
|
—
|
|
6
|
Projections for full fiscal 2015:
|
|
|
|
|
|
|
|
|
|
|
Openings
|
|
67
|
|
48
|
|
23
|
|
138
|
|
Closings
|
|
4
|
|
6
|
|
—
|
|
10
|
|
|
U.S. Direct-to-Consumer Comparable Sales
|
|||||
|
|
|
|
|
|
|
|
|
|
Change for Fiscal Third Quarter
|
Change for Three Fiscal Quarters
|
||||
Increase (Decrease)
|
|
|
|
|
|
|
|
|
|
Carter's Retail
|
|
OshKosh Retail
|
Carter's Retail
|
|
OshKosh Retail
|
|
|
|
|
|
|
|
|
Stores
|
|
(5.6)%
|
|
(5.4)%
|
(3.7)%
|
|
(2.6)%
|
eCommerce
|
|
+6.2%
|
|
+14.1%
|
+12.0%
|
|
+21.9%
|
Total DTC
|
|
(3.2)%
|
|
(2.0)%
|
(0.7)%
|
|
+1.7%
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||||||||||||||
(dollars in thousands)
|
October 3, 2015
|
|
% of
Total |
|
September 27, 2014
|
|
% of
Total |
|
October 3, 2015
|
|
% of
Total |
|
September 27, 2014
|
|
% of
Total |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carter’s Wholesale
|
$
|
343,555
|
|
|
40.4
|
%
|
|
$
|
309,772
|
|
|
38.8
|
%
|
|
$
|
824,600
|
|
|
38.4
|
%
|
|
$
|
781,460
|
|
|
38.6
|
%
|
Carter’s Retail
|
294,928
|
|
|
34.7
|
%
|
|
281,455
|
|
|
35.2
|
%
|
|
799,635
|
|
|
37.2
|
%
|
|
745,473
|
|
|
36.8
|
%
|
||||
Total Carter’s (U.S.)
|
638,483
|
|
|
75.1
|
%
|
|
591,227
|
|
|
74.0
|
%
|
|
1,624,235
|
|
|
75.6
|
%
|
|
1,526,933
|
|
|
75.4
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OshKosh Retail
|
$
|
98,292
|
|
|
11.6
|
%
|
|
$
|
91,427
|
|
|
11.4
|
%
|
|
$
|
244,787
|
|
|
11.4
|
%
|
|
$
|
222,500
|
|
|
11.0
|
%
|
OshKosh Wholesale
|
18,794
|
|
|
2.2
|
%
|
|
25,107
|
|
|
3.1
|
%
|
|
49,151
|
|
|
2.3
|
%
|
|
52,342
|
|
|
2.6
|
%
|
||||
Total OshKosh (U.S.)
|
117,086
|
|
|
13.8
|
%
|
|
116,534
|
|
|
14.5
|
%
|
|
293,938
|
|
|
13.7
|
%
|
|
274,842
|
|
|
13.6
|
%
|
||||
International
|
94,237
|
|
|
11.1
|
%
|
|
91,175
|
|
|
11.5
|
%
|
|
229,162
|
|
|
10.7
|
%
|
|
222,870
|
|
|
11.0
|
%
|
||||
Total net sales
|
$
|
849,806
|
|
|
100.0
|
%
|
|
$
|
798,936
|
|
|
100.0
|
%
|
|
$
|
2,147,335
|
|
|
100.0
|
%
|
|
$
|
2,024,645
|
|
|
100.0
|
%
|
•
|
Increase of $16.1 million from new store openings;
|
•
|
Increase of
$6.8
million from eCommerce; and
|
•
|
Decrease of $10.1 million in comparable store sales.
|
•
|
Increase of $51.8 million from new store openings;
|
•
|
Increase of
$21.5 million from eCommerce;
|
•
|
Decrease of $17.0 million in comparable store sales; and
|
•
|
Decrease of
$3.1 million
related to store closings.
|
•
|
Increase of $9.0 million from new store openings;
|
•
|
Increase of $3.1 million from eCommerce;
|
•
|
Decrease of $2.9 million related to store closings; and
|
•
|
Decrease of $2.6 million in comparable store sales.
|
•
|
Increase of $20.1 million from new store openings;
|
•
|
Increase of $9.4 million from eCommerce;
|
•
|
Decrease of $5.5 million related to store closings; and
|
•
|
Decrease of $2.0 million in comparable store sales.
|
•
|
Increase of $2.3 million from eCommerce due to the 2015 launch of our eCommerce website in China;
|
•
|
Increase of $1.9 million from eCommerce driven by our Canadian website;
|
•
|
Increase of $1.6 million from our Canadian retail stores; and
|
•
|
Decrease of $2.7 million in our wholesale business primarily due to the Target Canada bankruptcy that occurred in early 2015.
|
•
|
Increase of $7.0 million from our Canadian retail stores;
|
•
|
Increase of $6.1 million from eCommerce driven by our Canadian website;
|
•
|
Increase of $4.5 million from wholesale sales to locations other than Canada;
|
•
|
Increase of $2.4 million from eCommerce due to the 2015 launch of our eCommerce website in China;
|
•
|
Decrease of $8.8 million in our Canadian wholesale business primarily due to the Target Canada bankruptcy that occurred in early 2015; and
|
•
|
Decrease of $4.4 million related to the exit of retail operations in Japan in the first quarter of fiscal 2014.
|
•
|
$4.4 million in lower expenses for fulfillment and distribution;
|
•
|
$1.4 million in lower expenses for legal services;
|
•
|
$1.3 million in reduced amortization for the H.W. Carter & Sons trademark;
|
•
|
$1.2 million in lower provisions for accounts receivable;
|
•
|
$1.0 million of reimbursement for business interruption costs;
|
•
|
$0.9 million in lower expenses related to our wholesale management; and
|
•
|
$0.5 million in lower expenses related to domestic eCommerce operations;
|
•
|
$7.8 million in higher expenses related to retail store operations, primarily due to new stores;
|
•
|
$5.4 million in higher expenses related to marketing and brand management; and
|
•
|
$2.7 million in higher personnel-related expenses.
|
•
|
$8.9 million in reduced amortization for the H.W. Carter & Sons trademark;
|
•
|
$6.6 million decrease in expenses related to office consolidations in prior periods;
|
•
|
$5.0 million in lower expenses for fulfillment and distribution;
|
•
|
$4.7 million in lower provisions for accounts receivable;
|
•
|
$3.0 million in lower expenses for legal services;
|
•
|
$1.2 million in lower expenses related to our wholesale management;
|
•
|
$1.5 million in lower expenses related to our exit from Japan retail operations in the first quarter of fiscal 2014; and
|
•
|
$0.7 million in lower expenses related to domestic eCommerce operations;
|
•
|
$21.6 million in higher expenses related to retail store operations, primarily due to new stores;
|
•
|
$7.5 million in higher expenses related to marketing and brand management; and
|
•
|
$4.2 million in higher personnel-related expenses.
|
(dollars in thousands)
|
|
Carter's Wholesale
|
|
Carter's Retail
|
|
OshKosh Wholesale
|
|
OshKosh Retail
|
|
International
|
|
Corporate Expenses
|
|
Total
|
||||||||||||||
Operating income (loss) for third quarter of fiscal 2014
|
|
$
|
55,762
|
|
|
$
|
54,501
|
|
|
$
|
2,240
|
|
|
$
|
5,300
|
|
|
$
|
15,896
|
|
|
$
|
(23,242
|
)
|
|
$
|
110,457
|
|
Increase (decrease) in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross profit
|
|
15,078
|
|
|
4,572
|
|
|
1,244
|
|
|
3,095
|
|
|
2,829
|
|
|
(485
|
)
|
|
26,333
|
|
|||||||
Royalty income
|
|
736
|
|
|
290
|
|
|
393
|
|
|
179
|
|
|
(89
|
)
|
|
—
|
|
|
1,509
|
|
|||||||
SG&A expenses
|
|
2,771
|
|
|
(7,630
|
)
|
|
610
|
|
|
(2,403
|
)
|
|
(416
|
)
|
|
(1,010
|
)
|
|
(8,078
|
)
|
|||||||
Operating income (loss) for third quarter of fiscal 2015
|
|
$
|
74,347
|
|
|
$
|
51,733
|
|
|
$
|
4,487
|
|
|
$
|
6,171
|
|
|
$
|
18,220
|
|
|
$
|
(24,737
|
)
|
|
$
|
130,221
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
|
(dollars in thousands)
|
|
Carter's Wholesale
|
|
Carter's Retail
|
|
OshKosh Wholesale
|
|
OshKosh Retail
|
|
International
|
|
Corporate Expenses
|
|
Total
|
||||||||||||||
Operating income (loss) for the three quarters of fiscal 2014
|
|
$
|
133,489
|
|
|
$
|
137,659
|
|
|
$
|
5,125
|
|
|
$
|
(883
|
)
|
|
$
|
27,039
|
|
|
$
|
(83,094
|
)
|
|
$
|
219,335
|
|
Increase (decrease) in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross profit
|
|
28,861
|
|
|
20,682
|
|
|
3,473
|
|
|
9,833
|
|
|
4,473
|
|
|
(1,244
|
)
|
|
66,078
|
|
|||||||
Royalty income
|
|
1,203
|
|
|
653
|
|
|
983
|
|
|
284
|
|
|
289
|
|
|
—
|
|
|
3,412
|
|
|||||||
SG&A expenses
|
|
8,932
|
|
|
(24,437
|
)
|
|
134
|
|
|
(5,838
|
)
|
|
(834
|
)
|
|
9,896
|
|
|
(12,147
|
)
|
|||||||
Operating income (loss) for the three quarters of fiscal 2015
|
|
$
|
172,485
|
|
|
$
|
134,557
|
|
|
$
|
9,715
|
|
|
$
|
3,396
|
|
|
$
|
30,967
|
|
|
$
|
(74,442
|
)
|
|
$
|
276,678
|
|
|
|
(aa)
|
|
(bb)
|
|
(cc)
|
|
(dd)
|
|
(ee)
|
|
(ff)
|
|
|
•
|
Increase in gross profit of
$15.1 million
primarily due to higher net sales as previously discussed and lower product costs, partially offset by higher provisions for inventory;
|
•
|
Increase in royalty income of
$0.7 million
; and
|
•
|
Decrease in SG&A expenses of
$2.8 million
primarily due to a decrease of $2.2 million in distribution expenses and a decrease of $1.0 million in provisions for accounts receivables.
|
•
|
Increase in gross profit of
$28.9 million
primarily due to higher net sales, as previously discussed;
|
•
|
Increase in royalty income of
$1.2 million
; and
|
•
|
Decrease in SG&A expenses of
$8.9 million
driven primarily by a decrease of $4.1 million in distribution expenses, a decrease of $3.3 million in provisions for accounts receivable, and a decrease of $1.2 million in provisions for bad debt.
|
•
|
Increase in gross profit of
$4.6 million
primarily due to higher sales as previously discussed, partially offset by higher provisions for inventory; and
|
•
|
Increase of
$7.6 million
in SG&A expenses primarily due to an increase of $5.8 million in expenses for new retail stores and eCommerce in fiscal 2015 and an increase of $3.6 million in marketing expenses, partially offset by a decrease of $1.6 million in distribution expenses.
|
•
|
Increase in gross profit of $20.7 million primarily due to higher sales as previously discussed, partially offset by higher provisions for inventory; and
|
•
|
Increase of
$24.4 million
in SG&A expenses primarily due to an increase of $19.8 million in expenses for new retail stores and eCommerce in fiscal 2015 and an increase of $4.8 million in marketing expenses.
|
•
|
Increase in gross profit of $1.2 million primarily due to the improvement in the gross margin due to lower product costs and lower inventory provisions, despite lower sales volume as previously discussed; and
|
•
|
Decrease of
$0.6 million
in SG&A expenses.
|
•
|
Increase in gross profit of $3.5 million primarily due to the improvement in the gross margin due to lower product costs and lower inventory provisions, despite lower sales volume as previously discussed; and
|
•
|
Increase in royalty income of $1.0 million.
|
•
|
Increase in gross profit of $3.1 million due primarily to higher sales, as previously discussed; and
|
•
|
Increase in SG&A expenses of
$2.4 million
primarily due to an increase of $2.8 million in expenses for new retail stores and eCommerce in fiscal 2015 and an increase of $0.8 million in marketing expenses, partially offset by a decrease of $0.8 million in distribution expenses.
|
•
|
Increase in gross profit of $9.8 million due primarily to higher sales, as previously discussed; and
|
•
|
Increase in SG&A expenses of
$5.8 million
primarily due to an increase of $6.6 million in expenses for new retail store and eCommerce in fiscal 2015, partially offset by a decrease of $1.3 million in distribution expenses.
|
•
|
Increase in gross profit of $2.8 million due primarily to higher sales as previously discussed; and
|
•
|
Increase of
$0.4 million
in SG&A expenses primarily due to an increase of $1.3 million in expenses for new retail stores in Canada and the launch of eCommerce in China, partially offset by a decrease of $0.7 million in expenses related to wholesale management.
|
•
|
Increase in gross profit of $4.5 million due primarily to higher sales as previously discussed; and
|
•
|
Increase of
$0.8 million
in SG&A expenses primarily due to an increase of $2.5 million in expenses associated with new retail stores in Canada, an increase of $1.0 million in expenses related to the launch of eCommerce in China, and an increase of $1.0 million in accretion and revaluation of the contingent consideration for the 2011 Bonnie Togs acquisition in Canada, partially offset by a decrease of $3.9 million in expenses in fiscal 2015 associated with the exit from our former Japan retail operations in the first quarter of fiscal 2014 and expenses related to the international retail operations management.
|
•
|
Increase of $2.7 million in expenses related to human resources and employee benefits;
|
•
|
Increase of $1.6 million in expenses related to information technology;
|
•
|
Decrease of $1.4 million in administrative and legal expenses; and
|
•
|
Decrease of $1.3 million in amortization of the H.W. Carter & Sons tradename.
|
•
|
Decrease of $8.9 million in amortization expense for the H.W. Carter & Sons tradename;
|
•
|
Decrease of $6.6 million in expenses related to the office consolidation in prior periods;
|
•
|
Decrease of $2.6 million in administrative and legal expenses;
|
•
|
Increase of $5.1 million in expenses related to information technology; and
|
•
|
Increase of $4.2 million in expenses related to human resources and employee benefits.
|
Period
|
|
Total number
of shares
purchased
(1)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs (2)
|
|
Approximate
dollar value of shares that may
yet be
purchased
under the plans
or programs
|
||
|
|
|
|
|
|
|
|
|
||
July 5, 2015 through August 1, 2015
|
|
115,400
|
|
|
$107.09
|
|
115,400
|
|
|
$123,885,345
|
|
|
|
|
|
|
|
|
|
||
August 2, 2015 through August 29, 2015
|
|
81,499
|
|
|
$99.45
|
|
79,500
|
|
|
$115,978,961
|
|
|
|
|
|
|
|
|
|
||
August 30, 2015 through October 3, 2015
|
|
95,900
|
|
|
$95.73
|
|
95,900
|
|
|
$106,798,249
|
|
|
|
|
|
|
|
|
|
||
Total
|
|
292,799
|
|
|
|
|
290,800
|
|
|
|
(1)
|
Includes shares of our common stock surrendered by our employees to satisfy required tax withholding upon the vesting of restricted stock awards. There were
1,999 shares
surrendered between
July 5, 2015
and
October 3, 2015
.
|
(2)
|
Share purchases during the
third
quarter of fiscal 2015 were made in compliance with all applicable rules and regulations and in accordance with the share repurchase authorizations described in Note 5 to our accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
|
Exhibit Number
|
Description of Exhibits
|
|
|
3.1
|
Certificate of Incorporation of Carter's, Inc., as amended on May 12, 2006.
|
3.2
|
Amended and Restated By-Laws of Carter's, Inc. (incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 26, 2015).
|
10.1
|
Third Amended and Restated Credit Agreement, dated as of September 16, 2015, by and among The William Carter Company, as U.S. Borrower, The Genuine Canadian Corp., as Canadian Borrower, Carter’s Holdings B.V., as Dutch Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, U.S. Dollar Facility Swing Line Lender, U.S. Dollar Facility L/C Issuer and Collateral Agent, JPMorgan Chase Bank N.A., Toronto Branch, as Canadian Agent, Multicurrency Facility Swing Line Lender and a Multicurrency Facility L/C Issuer, J.P. Morgan Europe Limited, as European Agent, JPMorgan Chase Bank, N.A., London Branch, as a Multicurrency Facility Swing Line Lender and a Multicurrency Facility L/C Issuer, Bank of America, N.A., as Syndication Agent, J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arrangers and Bookrunners, Bank of Montreal, Branch Banking & Trust Company, Royal Bank of Canada, SunTrust Bank and U.S. Bank National Association, as Co-Documentation Agents and certain other lenders party thereto (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 22, 2015).
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10.2
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Form of severance agreement entered into from time to time between The William Carter Company and executive officers.
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31.1
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Rule 13a-15(e)/15d-15(e) and 13a-15(f)/15d-15(f) Certification.
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31.2
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Rule 13a-15(e)/15d-15(e) and 13a-15(f)/15d-15(f) Certification.
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32
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Section 1350 Certification.
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101
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Interactive Data File
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October 29, 2015
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/s/ MICHAEL D. CASEY
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Michael D. Casey
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Chief Executive Officer
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(Principal Executive Officer)
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October 29, 2015
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/s/ RICHARD F. WESTENBERGER
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Richard F. Westenberger
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Executive Vice President and
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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A.
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General
. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors upon issuance of any such Preferred Stock. The holders of the Common Stock shall have no preemptive rights to subscribe for any shares of any class of stock of this corporation whether now or hereafter authorized.
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B.
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Voting
. Each share of Common Stock shall be entitled to one vote. There shall be no cumulative voting.
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C.
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Number
. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.
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D.
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Dividends
. Dividends may be declared and paid on the Common Stock from funds lawfully available therefor as and when determined by the Board of Directors.
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E.
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Liquidation
. Upon the dissolution or liquidation of the Corporation, whether voluntary or involuntary, holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders, subject to any preferential rights of any then outstanding Preferred Stock.
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A.
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by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; or
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B.
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by a committee of such directors designated by a majority vote of such directors, even though less than a quorum; or
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C.
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if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or
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D.
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by the holders of the Common Stock.
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October 29, 2015
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/s/ MICHAEL D. CASEY
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Michael D. Casey
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Chief Executive Officer
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October 29, 2015
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/s/ RICHARD F. WESTENBERGER
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Richard F. Westenberger
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Chief Financial Officer
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1.
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the "Business of the Company or any of its Company Affiliates" shall include the wholesale and retail sale (including without limitation, electronic commerce) of children’s apparel and related accessories;
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2.
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"Restricted Territory" means each state in the United States;
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3.
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"Restricted Capacity" means the provision of services to a competitor of the Company which is the same or comparable to the services the Executive provided to the Company or any of its Company Affiliates or in which the Confidential Information, trade secrets or customer goodwill which the Executive created or to which the Executive had access during the Executive’s employment with the Company or any of its Company Affiliates would give that competitor an unfair competitive advantage.
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1.
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I have reviewed this quarterly report on Form 10-Q of Carter’s, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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October 29, 2015
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/s/ MICHAEL D. CASEY
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Michael D. Casey
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Carter’s, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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October 29, 2015
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/s/ RICHARD F. WESTENBERGER
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Richard F. Westenberger
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Chief Financial Officer
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