Baby Blues: Carter’s Details Tariffs’ Impact

Like most other American companies, Atlanta-based Carter’s Inc. is keeping a close eye on the Trump administration’s plans to impose new tariffs on products imported into the U.S. from a range of countries. The retailer is also spelling out what such duties could cost it.

Carter’s conclusions, as of now: If implemented as proposed, the additional tariffs “would add substantially to the $110 million in duties on imported product paid by the company in fiscal 2024,” it said in the press release on its second quarter results for its 2025 fiscal year.

A bit of background, in case you don’t know Carter’s: it describes itself as “North America’s largest and most-enduring apparel company exclusively for babies and young children. Our core brands are Carter’s and OshKosh B’gosh, which are sold through more than 1000 company-owned stores in the United States, Canada and Mexico.”

The retailer has estimated that the gross pre-tax earnings impact of additional import duties under an additional baseline tariff of 30% for China, 20% for Vietnam, 19% for Indonesia and 10% for all other countries would be $125 million to $150 million yearly.

“Over time, the company intends to offset these additional costs through a combination of changes to its product assortments, cost sharing with its vendor partners, changes to the mix of its production by country and raising prices to end consumers and its wholesale customers,” the retailer’s earnings statement said. “In the second half of fiscal year 2025, the Company anticipates a net additional baseline tariff impact to pre-tax earnings of approximately $35 million.”

In addition to all the tariff-related tumult, Carter’s brought a new CEO on board in April. Together, those factors have caused the company to suspend its fiscal 2025 guidance. The retailer has lots of company in that last regard.

Click here for more from Carter’s quarterly earnings statement and what it’s doing to deal with the current economic uncertainty.