Carter’s (CRI) Slipped Due to Cautious Consumer Spending and Weak Direct-To-Consumer Trends

Aristotle Capital Boston, LLC, an investment advisor, released its “Small Cap Equity Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund delivered a return of -1.56% net of fees (-1.41% gross of fees) outperforming the Russell 2000 Index’s -3.28% total return. Security selection drove the outperformance while allocation effects also contributed. For more information on the fund’s best picks in 2024, please check its top five holdings.

Aristotle Small Cap Equity Strategy highlighted stocks like Carter’s, Inc. (NYSE:CRI), in the second quarter 2024 investor letter. Carter’s, Inc. (NYSE:CRI) designs, sources, and markets branded childrenswear. The one-month return of Carter’s, Inc. (NYSE:CRI) was -6.30%, and its shares lost 23.66% of their value over the last 52 weeks. On July 26, 2024, Carter’s, Inc. (NYSE:CRI) stock closed at $57.26 per share with a market capitalization of $2.09 billion.

Aristotle Small Cap Equity Strategy stated the following regarding Carter’s, Inc. (NYSE:CRI) in its Q2 2024 investor letter:

“Carter’s, Inc. (NYSE:CRI), a leading marketer of baby and young children’s apparel in North America, declined amid a cautious consumer spending environment and weak direct-to-consumer trends for the business during the quarter. We maintain our position as we believe the company has a strong brand in a stable category and that store rationalization efforts and an improving demographic backdrop can drive a sales recovery in the business in periods to come.”

A colorful assortment of children’s apparel with different themes, capturing the dynamism of the business.

Carter’s, Inc. (NYSE:CRI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Carter’s, Inc. (NYSE:CRI) at the end of the first quarter which was 35 in the previous quarter. For the first half, Carter’s, Inc.’s (NYSE:CRI) earnings per share increased by 13%, but sales decreased by 5%. While we acknowledge the potential of Carter’s, Inc. (NYSE:CRI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Carter’s, Inc. (NYSE:CRI) and shared Palm Valley Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.