CRI: Upgrade to EW, PT to $42; Time to Take Baby Out of the Corner

研报英文原文证据摘录

CRI: Upgrade to EW, PT to $42; Time to Take Baby Out of the Corner

Retailing, Specialty Softlines, and E-commerce Equity Research

In addition to collabs, CRI appears to have revamped their entire marketing strategy - bringing

onboard new management in June 2025 where the company is now investing heavier (previously

was under-penetrated) and becoming more efficient, helping to drive greater traffic to both in-store

locations and digital (resulting in increased ROI's), while also leaning further into loyalty programs to

keep customers for longer.

The brand momentum can be seen through G-Trends data, which shows trends began to accelerate

in early 2025, with momentum building through the year into a very successful holiday with trends

peaking >+200% in December. While reads have pulled back some at the start of the year as they lap

tougher compares, it remains positive YTD, which we find encouraging.

Exhibit 6 - CRI's Investment in Marketing/Collabs is Driving DTC Exhibit 7 - CRI Google Trends Data (Jan '24 - Jun '26)

Growth 200.0%

150.0%

100.0%

50.0%

0.0%

-50.0%

-100.0%

Carter's: (Google Trends)

Source: Google Trends, Wells Fargo Securities, LLC

Source: Company Reports, Wells Fargo Securities, LLC

Comps Have Inflected...Now "Comping the Comp"

Investments in marketing and product have not only helped CRI in achieving 12+ months of positive

comps but also built strong momentum behind the brand as demonstrated in 1Q's results (+10.5%

comp) in the strongest segment performance we've seen in over a decade (ex-COVID). While investor

concerns have built as CRI is set to start lapping tougher compares from stronger 2025, our checks

suggest they are likely to "comp the comp", with reads showing trends continue to hold in 2Q.