CRI Carters Inc

Carter's Inc. lowered its 2016 guidance for its wholesale and international businesses.

Shares fell 8.4% to $102.14 in recent trading, retreating from an all-time high Tuesday, as the company also issued a mostly disappointing outlook for the third quarter.

For the year, the company expects per-share earnings growth at the low end of its previous projection for an increase between 10% and 12% and reduced its net sales view by a percentage point to between 5% and 6%.

For the current quarter, Carter's forecast a per-share earnings increase of 6% to 10% and net sales growth of 6% to 7%. Analysts polled by Thomson Reuters expected per-share profit to rise 17% and revenue to improve by 7%.

The Atlanta company's brands include its namesake brand and OshKosh. The company said Wednesday its second-quarter comparable retail sales were hurt by lower demand from international customers shopping in its U.S. stores and on its website.

For the period ended July 2, comparable retail sales grew 4.4% at its Carter's brand, driven by a 17% increase in e-commerce sales and 1.4% rise in sales at established retail stores. Overall retail sales grew 11% to $273.8 million. Carter's brand wholesale segment sales fell 2.8% to $205.7 million on weaker demand, partly the result of the timing of orders.

At its OshKosh brand, comparable sales declined 1.3%, including a 5.8% drop at comparable retail stores. OshKosh wholesale segment sales slumped 34%, reflecting lower seasonal bookings.

Over all, Carter's reported a profit of $36.2 million, or 71 cents a share, down from $36.1 million, or 68 cents a share, a year earlier. Excluding certain items, adjusted per-share earnings fell to 72 cents from 73 cents.

Revenue increased 4.4% to $639.5 million on stronger retail sales and international sales that were partly offset by weaker wholesale revenue. Currency fluctuations had a negative effect of 0.4 percentage point.

Analysts polled by Thomson Reuters expected per-share profit of 66 cents and revenue of $636.86 million.

Gross margin rose to 44.1% from 42.9%.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

July 27, 2016 12:15 ET (16:15 GMT)

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