Earnings to watch: Carter's (CRI) reports Q3 results tomorrow

Children’s apparel manufacturer Carter’s (NYSE:CRI) will be announcing earnings results this Friday morning. Here’s what to look for.

Carter's beat analysts’ revenue expectations last quarter, reporting revenues of $615.5 million, up 5.2% year on year. It was a satisfactory quarter for the company, with a beat of analysts’ EPS estimates but revenue guidance for next quarter missing analysts’ expectations.

Is Carter's a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting Carter’s revenue to decline 1.1% year on year, a deceleration from its flat revenue in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Carter's rarely misses Wall Street’s revenue estimates.

Looking at Carter’s peers in the consumer discretionary segment, some have already reported their Q3 results, giving us a hint as to what we can expect. VF Corp delivered year-on-year revenue growth of 1.2%, beating analysts’ expectations by 1.1%, and Levi's reported revenues up 4.3%, in line with consensus estimates. Levi's traded down 2.4% following the results.

Read our full analysis of VF Corp’s results here and Levi’s results here.

Investors in the consumer discretionary segment have had steady hands going into earnings, with share prices up 1.3% on average over the last month. Carter’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $38 (compared to the current share price of $31.01).

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