Carter's, Inc.

Welcome to Carter's fourth quarter fiscal 2025 earnings conference call. On the call are Doug Palladini, Chief Executive Officer and President, Richard Westenberger, Chief Financial Officer and Chief Operating Officer, and Sean McHugh, Treasurer. Please note that today's call is being recorded. I'll now turn the call over to Mr. McHugh.

Thank you, and good morning, everyone. We issued our fourth quarter 2025 earnings release earlier today. The release and presentation materials for today's call are available on our investor relations website at ir.carters.com. Method statements on today's call about items such as the company's expectations and plans are forward-looking statements. For discussion of factors that could cause actual results to vary from those contained in the forward-looking statements, please see our most recent SEC filings and the earnings release and presentation materials posted on our website. In these materials, you will also find reconciliations of various non-GAAP financial measurements referenced during this call. After today's prepared remarks, we will take questions as time allows. I will now turn the call over to Doug.

Good morning, and thank you for joining us as we share our fourth quarter and full year 2025 results. We're also going to offer some guidance for the year ahead, and while we believe the recent news regarding tariffs will be net positive for Carter's, it will take some time for the proper level of detail to fully emerge. so our comments today will exclude that potential tariff impact. As I approach one year in role in April and reflect on 2025, it's becoming clear that several of the themes I've consistently highlighted are coming to life. As Carter's returns to growth that is long-term, sustainable, and profitable, we continue to experience momentum in our business, doing what's right for our brands and consumers, which is yielding improved financial outcomes. As I characterize the kind of quality growth we want at Carter's, I'm specifically talking about decreasing promotional activity over time, growing our ability to price up and to sell higher price products overall, and balancing our transactional messaging with more emotion-driven product and brand storytelling that builds consumer connectivity and loyalty. We're creating new products that are truly resonating with consumers across all five brands, led by Carter's namesake, embodying holistic value, including style and quality, not just price. In Q4, among our D2C channels, all apparel brands and all age segments grew versus last year. Our brands are increasingly attracting new consumers, particularly among Gen Z and millennial families. With new fans leaning into our better and best product offerings with higher price points, we're validating what we believe are the equity and pricing power of our brands. Importantly, these newly acquired consumers are demonstrating the potential for higher lifetime value, an essential building block towards sustained positive results. Productivity has also been a consistent theme. We've taken necessary and decisive actions to rationalize our store fleet, right-size our workforce, and reduce complexity throughout the organization. As we recognize the benefits of enhanced productivity, we've returned to investing where we can generate the greatest returns. including in product make, which provides the design and style consumers expect and appreciate, and in demand creation to drive store and e-commerce traffic. For the first time since 2021, Carter's grew year-over-year revenue, even excluding the 53rd week of sales. We also executed our third consecutive quarter of retail comp growth, and we did so with higher AURs and less promotion. Consumer counts also continued to grow. as we attract new Gen Z fans who are selecting from our best product assortments at higher rates than existing consumers. These are all strong signals that our actions are generating results. We'll continue to build upon our top line momentum and profitability is expected to expand commensurately as productivity initiatives and demand creation investments generate returns. In 2026 and beyond, I believe both revenue and operating income will grow. We'll get into the details around these things shortly, but first, let's hear about 2025 results from Richard. Thank you, Doug.