Carter's E-Commerce Momentum Accelerates: A Growth Catalyst?

Carter's, Inc. CRI has been steadily strengthening its e-commerce operations, positioning digital channels as a central pillar of its growth strategy. As consumer shopping habits continue to shift toward online platforms, the company is investing in digital capabilities, targeted marketing and improved user experiences to capture incremental demand. Its direct-to-consumer (DTC) model, which integrates both online and physical stores, is helping Carter’s deepen customer relationships while driving higher engagement across its brands.

The momentum in digital channels has been particularly evident in recent performance metrics. In the fourth quarter of 2025, the company reported double-digit growth in e-commerce traffic, which supported a 4.7% increase in retail comparable sales and contributed to 9.4% year-over-year growth in retail net sales. Strong online engagement, coupled with improved product offerings and higher average unit retail (AUR) levels, played a key role in lifting overall retail performance and attracting new consumers to the brand.

Beyond traffic gains, Carter’s is focusing on enhancing the digital shopping journey through personalized marketing, improved product visibility and seamless fulfillment options. Investments in demand creation, especially across paid social channels and digital advertising, are helping the company expand its reach and strengthen brand awareness among younger families. These initiatives are also enabling Carter’s to attract higher-income consumers who tend to purchase premium product assortments, supporting improved pricing power and long-term customer value.

E-commerce is expected to remain a major catalyst for Carter’s growth as the company continues refining its omnichannel strategy. By integrating online and store operations, optimizing inventory availability and leveraging data-driven insights, Carter’s aims to improve customer convenience and operational efficiency. While external pressures such as tariffs and cost inflation may challenge margins, sustained digital growth and stronger consumer engagement could help the company drive consistent sales gains and reinforce its competitive position in the children’s apparel market.

CRI’s Price Performance, Valuation & Estimates

Carter’s shares have gained 7.7% in the past three months against the industry’s 18.6% decline.

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From a valuation standpoint, CRI trades at a forward price-to-earnings ratio of 11.70X compared with the industry’s average of 20.69X.

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Carter’s currently sports a Zacks Rank #1 (Strong Buy).

Other Key Picks in the Consumer Discretionary Space

Crocs, Inc. CROX, which is a leading footwear company, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CROX delivered a trailing four-quarter earnings surprise of 16.6%, on average. The Zacks Consensus Estimate for Crocs’ current financial-year EPS indicates a rise of 7.03% from the year-ago number.

Ralph Lauren RL, which is a designer and marketer of premium lifestyle products, currently carries a Zacks Rank of 2.

RL delivered a trailing four-quarter earnings surprise of 9.7%, on average. The Zacks Consensus Estimate for RL’s current financial-year sales indicates growth of 12.4% from the year-ago number.

Kontoor Brands, Inc. KTB, which is an apparel company, currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for KTB’s current financial-year EPS is expected to rise 15.6% from the corresponding year-ago reported figure. KTB delivered a trailing four-quarter earnings surprise of 13.9%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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