The children’s clothing retailer said higher costs, in part due to tariffs, had led to lower profit margins.
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Carter’s, the children’s clothing retailer that also owns the popular Oshkosh Bigosh brand, plans to close 150 stores and cut 300 jobs over the next three years.
Carter’s announced plans to close “low-margin” stores in its fiscal third-quarter report and Oct. 27 conference call, saying about 100 stores would close by 2026. The brand also announced plans to halt new store openings in its U.S. locations using its current store model and reduce its product offering by 20% to 30%.
The company’s conference call cited tariffs as one of the biggest drivers of lower margins and higher costs, and executive vice president and CFO Richard Westenberger said the company continues to monitor tariff levels and the “substantial impact that tariffs have begun to have on our business.”
“As you are well aware, over the past few months, significantly higher tariffs have been implemented, impacting imports from almost every country, including those from which we source the majority of our products,” he said.
CEO says Carter’s will save $35 million annually through job cuts
He said current estimates of the net impact of the tariff hike on fourth-quarter earnings range from $25 million to $35 million. This is expected to reduce gross profit by $20 million in the third quarter of 2025 and increase gross profit to $40 million in the fourth quarter.
Most of the 150 stores scheduled to close will close when their leases expire, Westenberger said. CEO Douglas Palladini said the brand will reduce office-based roles by 15%, which equates to about 300 jobs and is expected to generate $35 million in annual savings.
“It is important that Carter’s strengthens its performance-driven culture where fewer people have greater ownership and responsibility,” Palladini said. “To achieve this, we plan to reduce office-based roles by approximately 15% between now and the end of 2025. We believe these measures will streamline processes and decision-making at Carters.”
Westenberger said the company also decided not to provide 2025 sales and profit guidance, citing “continued and significant uncertainty regarding tariffs.”
USA TODAY contacted Carter’s on Oct. 28 but did not receive a response.
