Baby and children’s apparel retailer Carter’s has reported a decline in its net income to $11.6 million in the third quarter of this year, from $58.3 million in the same period last year.

The figure included an $8.8 million non-cash charge for the settlement of the OshKosh B’Gosh pension plan.

The company’s net sales decreased 0.1 per cent to $757.8 million year-on-year, reflecting lower US wholesale segment sales, which decreased 5.1 per cent.

Carter’s US retail and international segment net sales grew 2.6 per cent and 4.9 per cent, respectively.  

The retailer’s operating income decreased 62.2 per cent from $77 million in the third quarter of last year to $29.1 million this year.

The company’s operating margin fell from 10.2 per cent to 3.8 per cent, which Carter’s attributed to higher tariffs, investments in product, lower unit volume, and investments in new stores.

“We are pursuing several initiatives, including closing low-margin retail stores, right-sizing our organization, and honing product choices, which we believe will generate significant savings, improve overall cost structure, and provide investment capacity as we establish the foundation to return to consistent, profitable growth going forward,” said CEO and president Douglas C Palladini of the company’s plans to revitalise its financial performance.

“In light of the difficult decisions being made to improve our performance, the board of directors and I have also decided to reduce our 2026 compensation.”