North American babies and children’s apparel wear brand Carter’s has reported a 4.8 per cent decrease in net sales, from $661.5 million in the first fiscal quarter of last year to $629.8 million in the same quarter of this year. 

The lowered demand was attributed to inflation, increased interest rates and declining consumer confidence. 

Net sales in the US wholesale, US retail and international segments saw declines of 5.3 per cent, 4.3 per cent and 4.9 per cent respectively, with e-commerce outperforming stores.  

Carter’s operating income decreased by 52.6 per cent from $55 million in the first quarter of last year to 26.2 million in the same quarter this year, while its operating margin decreased from 8.3 per cent to 4.1 per cent. 

The decrease was caused by investments in pricing, fixed cost deleverage, operating model improvement initiatives and leadership transition-related costs. 

The company’s net income dipped from $38 million in the first fiscal quarter of last year to $22.5 million in the same period this year. 

“As I get up to speed on the business and assess what is required to return to growth, we are suspending forward-looking guidance at this time,” said Carter’s new CEO and president Douglas C Palladini.

“I strongly believe in the tenet that we ‘do what we say’ and I intend to spend the time required to be able to meet that commitment. 

“In addition, the current tariff situation has introduced substantial uncertainty, greatly complicating our ability to accurately predict Carter’s financial outlook,” he said.