# Carter's rebrands for Gen Z parents as tariffs bite earnings

> The 161-year-old children's clothing company targets younger shoppers while navigating import costs and wholesale timing shifts.
- Title: Carter's rebrands for Gen Z parents as tariffs bite earnings
- Summary: The 161-year-old children's clothing company targets younger shoppers while navigating import costs and wholesale timing shifts. Carter's is betting its…
- Keywords: carter's, cri, gen z, millennial parents, watch them glow, tariffs, wholesale, retail, apparel, children's clothing, sharon price john, sarah crockett
- Source: Alphastreet - Earnings Decoded. Market Intelligence Delivered — https://news.alphastreet.com/carters-cri-rebrands-for-younger-parents-as-sales-momentum-builds
- Author: Newsdesk
- Published: 2026-09-18T19:54:38+00:00
- Read time: 1 min
- Topics: carter's, cri, gen z, millennial parents, watch them glow, tariffs, wholesale, retail, apparel, children's clothing, sharon price john, sarah crockett
## Strong Q2 beats expectations
Carter's posted Q2 2026 sales of $615.5 million, up 5.2% year-over-year. Adjusted earnings per share hit $0.26, crushing the $0.06 consensus.
## Fifth straight quarter of growth
U.S. Retail comparable sales rose 5.1% in Q2, marking the fifth consecutive quarter of positive comps. First-half comps reached 8%.
## Wholesale surges on early orders
U.S. Wholesale sales jumped 11.7% to $215.6 million. Mass-channel customers requested fall merchandise earlier than expected, creating a Q3 headwind.
## One-time tariff refund boosts cash
Carter's recovered $132 million in previously paid import duties and interest, adding about $100 million after taxes. Cash jumped to $653.6 million from $338.2 million.
## Tariffs squeeze full-year earnings
Despite 2-3% revenue growth expected for 2026, adjusted EPS will decline high-single to low-double digits from $3.47 in 2025 due to tariff costs.
## Q3 sales to dip on timing
Management expects Q3 sales of about $750 million versus $758 million last year. Wholesale revenue will decline high-single digits as early orders normalize.
## First rebrand in 24 years
Carter's launched "Watch Them Glow," targeting Gen Z and millennial parents. Full retail and packaging changes roll out in 2027.

> incorporating updated elements that really speak directly to the Gen Z, young, millennial audiences and the values that they care about.
## Gen Z customers growing fast
Gen Z customer cohorts grew mid-teens percentage in Q2. E-commerce comps rose double-digits for the fourth straight quarter.
## October earnings call is key
The Q3 2026 earnings call on October 26 will show if wholesale normalized, margins expanded, and the rebrand is attracting younger parents.
## Key takeaway

Carter's is betting its future on attracting Gen Z parents through its first major rebrand since 2000, even as tariff costs pressure near-term earnings despite strong sales growth.