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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Carters Inc | NYSE:CRI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.66 | 0.95% | 70.15 | 71.17 | 69.82 | 70.26 | 868,002 | 01:00:00 |
x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 30, 2017 OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____
TO ______
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Delaware
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13-3912933
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(state or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Title of each class
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Name of each Exchange on which Registered
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Carter's, Inc.'s common stock par value $0.01 per share
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New York Stock Exchange
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Page
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Form 10-K Summary
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||
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•
|
providing the best value and experience in young children's apparel and accessories;
|
•
|
extending the reach of our brands by improving the convenience of shopping for our products in the United States and our omni-channel experience;
|
•
|
expanding our international operations; and
|
•
|
improving profitability by strengthening distribution and direct-sourcing capabilities, as well as inventory management disciplines.
|
2017
|
|
High
|
|
Low
|
||||
First quarter
|
|
$
|
91.71
|
|
|
$
|
77.94
|
|
Second quarter
|
|
$
|
95.80
|
|
|
$
|
79.76
|
|
Third quarter
|
|
$
|
99.36
|
|
|
$
|
83.84
|
|
Fourth quarter
|
|
$
|
118.89
|
|
|
$
|
91.41
|
|
2016
|
|
High
|
|
Low
|
||||
First quarter
|
|
$
|
105.93
|
|
|
$
|
83.44
|
|
Second quarter
|
|
$
|
108.20
|
|
|
$
|
97.54
|
|
Third quarter
|
|
$
|
112.58
|
|
|
$
|
86.37
|
|
Fourth quarter
|
|
$
|
94.83
|
|
|
$
|
84.06
|
|
Period
|
|
Total number
of shares
purchased
(1)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Approximate
dollar value of remaining shares that can be
purchased
under the plans
or programs
|
||||||
|
|
|
|
|
|
|
|
|
||||||
October 1, 2017 through October 28, 2017
|
|
141,293
|
|
|
$
|
94.74
|
|
|
141,293
|
|
|
$
|
110,148,594
|
|
|
|
|
|
|
|
|
|
|
||||||
October 29, 2017 through November 25, 2017
|
|
143,516
|
|
|
$
|
100.76
|
|
|
144,485
|
|
|
$
|
95,703,035
|
|
|
|
|
|
|
|
|
|
|
||||||
November 26, 2017 through December 30, 2017
|
|
91,005
|
|
|
$
|
111.58
|
|
|
91,005
|
|
|
$
|
85,640,453
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
375,814
|
|
|
|
|
|
376,783
|
|
|
|
(1)
|
Includes shares of our common stock surrendered by our employees to satisfy required tax withholding upon the vesting of restricted stock awards. There were
969
shares surrendered between
October 1, 2017
and
December 30, 2017
.
|
|
Fiscal year ended
|
||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Number of shares repurchased
|
2,103,401
|
|
|
3,049,381
|
|
|
1,154,288
|
|
|||
Aggregate cost of shares repurchased
(dollars in thousands)
|
$
|
188,762
|
|
|
$
|
300,445
|
|
|
$
|
110,290
|
|
Average price per share
|
$
|
89.74
|
|
|
$
|
98.53
|
|
|
$
|
95.55
|
|
|
For the fiscal year ended
|
|||||||||||||||||||
(dollars in thousands, except per share data)
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2, 2016
|
|
January 3,
2015 |
|
December 28, 2013
|
||||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Retail
|
|
$
|
1,775,287
|
|
|
$
|
1,656,414
|
|
|
$
|
1,514,355
|
|
|
$
|
1,422,305
|
|
|
$
|
1,243,471
|
|
U.S. Wholesale
|
|
1,209,663
|
|
|
1,178,034
|
|
|
1,173,313
|
|
|
1,155,089
|
|
|
1,109,984
|
|
|||||
International
|
|
415,460
|
|
|
364,736
|
|
|
326,211
|
|
|
316,474
|
|
|
285,256
|
|
|||||
Total net sales
|
|
$
|
3,400,410
|
|
|
$
|
3,199,184
|
|
|
$
|
3,013,879
|
|
|
$
|
2,893,868
|
|
|
$
|
2,638,711
|
|
Cost of goods sold
|
|
$
|
1,917,096
|
|
|
$
|
1,820,035
|
|
|
$
|
1,755,855
|
|
|
$
|
1,709,428
|
|
|
$
|
1,543,332
|
|
Gross profit
|
|
$
|
1,483,314
|
|
|
$
|
1,379,149
|
|
|
$
|
1,258,024
|
|
|
$
|
1,184,440
|
|
|
$
|
1,095,379
|
|
Operating income
|
|
$
|
419,568
|
|
|
$
|
426,558
|
|
|
$
|
392,857
|
|
|
$
|
333,345
|
|
|
$
|
264,151
|
|
Income before income taxes
|
|
$
|
391,032
|
|
|
$
|
396,070
|
|
|
$
|
368,188
|
|
|
$
|
302,906
|
|
|
$
|
249,465
|
|
Net income (a)
|
|
$
|
302,764
|
|
|
$
|
258,106
|
|
|
$
|
237,822
|
|
|
$
|
194,670
|
|
|
$
|
160,407
|
|
Per Common Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net income
|
|
$
|
6.31
|
|
|
$
|
5.13
|
|
|
$
|
4.55
|
|
|
$
|
3.65
|
|
|
$
|
2.78
|
|
Diluted net income
|
|
$
|
6.24
|
|
|
$
|
5.08
|
|
|
$
|
4.50
|
|
|
$
|
3.62
|
|
|
$
|
2.75
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital (b) (c) (d)
|
|
$
|
689,045
|
|
|
$
|
779,476
|
|
|
$
|
867,890
|
|
|
$
|
792,675
|
|
|
$
|
700,473
|
|
Total assets (c) (d)
|
|
$
|
2,067,999
|
|
|
$
|
1,946,597
|
|
|
$
|
2,003,654
|
|
|
$
|
1,886,825
|
|
|
$
|
1,805,444
|
|
Total debt, net (c)
|
|
$
|
617,306
|
|
|
$
|
580,376
|
|
|
$
|
578,972
|
|
|
$
|
579,728
|
|
|
$
|
578,960
|
|
Stockholders' equity
|
|
$
|
857,093
|
|
|
$
|
788,124
|
|
|
$
|
875,051
|
|
|
$
|
786,684
|
|
|
$
|
700,731
|
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
|
$
|
329,621
|
|
|
$
|
369,229
|
|
|
$
|
307,987
|
|
|
$
|
282,397
|
|
|
$
|
209,696
|
|
Net cash used in investing activities
|
|
$
|
(227,915
|
)
|
|
$
|
(88,340
|
)
|
|
$
|
(103,425
|
)
|
|
$
|
(104,732
|
)
|
|
$
|
(220,532
|
)
|
Net cash used in financing activities
|
|
$
|
(223,075
|
)
|
|
$
|
(363,507
|
)
|
|
$
|
(162,005
|
)
|
|
$
|
(122,438
|
)
|
|
$
|
(84,658
|
)
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
|
$
|
69,473
|
|
|
$
|
88,556
|
|
|
$
|
103,497
|
|
|
$
|
103,453
|
|
|
$
|
182,525
|
|
Dividend declared and paid per common share
|
|
$
|
1.48
|
|
|
$
|
1.32
|
|
|
$
|
0.88
|
|
|
$
|
0.76
|
|
|
$
|
0.48
|
|
|
For the fiscal year ended
|
|||||||||||||||||||
(dollars in thousands)
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
|
January 3,
2015 |
|
December 28, 2013
|
||||||||||
Amortization of H.W. Carter and Sons tradenames
|
|
$
|
—
|
|
|
$
|
1,742
|
|
|
$
|
6,239
|
|
|
$
|
16,437
|
|
|
$
|
13,588
|
|
Facility closures and workforce reduction costs
|
|
$
|
2,454
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,126
|
|
|
$
|
38,214
|
|
Adjustment and accretion of contingent considerations
|
|
$
|
(3,600
|
)
|
|
$
|
—
|
|
|
$
|
1,886
|
|
|
$
|
1,348
|
|
|
$
|
2,825
|
|
Direct sourcing initiative
|
|
$
|
328
|
|
|
$
|
720
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition-related costs
|
|
$
|
3,404
|
|
|
$
|
2,353
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Provisions for special employee compensation
|
|
$
|
21,197
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net income tax benefit for the U.S. Tax Cuts and Jobs Act of 2017
|
|
$
|
(40,000
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(b)
|
Represents total current assets less total current liabilities.
|
(c)
|
All periods have been adjusted to reflect the retrospective adoption of Accounting Standards Update No. 2015-03,
Presentation of Debt Issuance Cost for Term Debt
.
|
(d)
|
Fiscal 2017 reflects the prospective adoption of Accounting Standards Update No. 2015-17,
Balance Sheet Classification of Deferred Taxes
.
|
•
|
over
17,000
wholesale locations (including department stores, national chain stores, specialty stores and discount retailers) in the United States;
|
•
|
830
company-operated retail stores in the United States;
|
•
|
179
company-operated retail stores in Canada;
|
•
|
41
company-operated retail stores in Mexico;
|
•
|
our eCommerce sites in the United States, Canada, and China; and
|
•
|
other wholesale, licensing, and online channels outside the United States.
|
•
|
providing the best value and experience in young children's apparel and accessories;
|
•
|
extending the reach of our brands by improving the convenience of shopping for our products in the United States and our omni-channel experience;
|
•
|
expanding our international operations; and
|
•
|
improving profitability by strengthening distribution and direct-sourcing capabilities, as well as inventory management disciplines.
|
•
|
Consolidated net sales grew to
$3.4 billion
in fiscal 2017, up 6% over fiscal 2016.
|
•
|
Consolidated gross margin increased to 43.6% in fiscal 2017, up from 43.1% in fiscal 2016.
|
•
|
Consolidated operating earnings of
$420 million
included $21 million for provisions for special employee compensation funded by the $40 million income tax benefit from recent tax reform.
|
•
|
Consolidated net income for fiscal 2017 of
$303 million
includes an income tax benefit of approximately $40 million related to the Company's accounting for the implementation of the U.S. Tax Cuts and Jobs Act of 2017.
|
•
|
Diluted EPS increased to
$6.24
for fiscal 2017 compared to
$5.08
, with $0.84 of the increase due to income tax benefits related to the Company's accounting for the enactment of U.S. tax reform.
|
•
|
Consolidated cash flow from operations was
$330 million
.
|
•
|
The Company returned $260 million to shareholders in fiscal 2017 through cash dividends and repurchases of common shares.
|
•
|
The Company acquired Skip Hop and a former licensee in Mexico.
|
•
|
The number of company-operated retail stores grew to 1,050, including 39 stores acquired through the acquisition of the former licensee in Mexico.
|
•
|
The Company amended its revolving credit agreement to increase its credit line to $750 million.
|
|
For the fiscal year ended
|
|||||||
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
|||
Net sales
|
|
|
|
|
|
|||
U.S. Retail
|
52.2
|
%
|
|
51.8
|
%
|
|
50.2
|
%
|
U.S. Wholesale
|
35.6
|
%
|
|
36.8
|
%
|
|
39.0
|
%
|
International
|
12.2
|
%
|
|
11.4
|
%
|
|
10.8
|
%
|
Consolidated net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
56.4
|
%
|
|
56.9
|
%
|
|
58.3
|
%
|
Gross profit
|
43.6
|
%
|
|
43.1
|
%
|
|
41.7
|
%
|
Selling, general, and administrative expenses
|
32.6
|
%
|
|
31.1
|
%
|
|
30.2
|
%
|
Royalty income
|
(1.3
|
)%
|
|
(1.3
|
)%
|
|
(1.5
|
)%
|
Operating income
|
12.3
|
%
|
|
13.3
|
%
|
|
13.0
|
%
|
Interest expense
|
0.9
|
%
|
|
0.8
|
%
|
|
0.9
|
%
|
Interest income
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
Other (income) expense, net
|
n/m
|
|
|
0.1
|
%
|
|
(0.1
|
)%
|
Income before income taxes
|
11.5
|
%
|
|
12.4
|
%
|
|
12.2
|
%
|
Provision for income taxes (1)
|
2.6
|
%
|
|
4.3
|
%
|
|
4.3
|
%
|
Net income (1)
|
8.9
|
%
|
|
8.1
|
%
|
|
7.9
|
%
|
|
For the fiscal year ended
|
||||||||||||
(dollars in thousands)
|
December 30, 2017
|
|
% of
Total Net Sales |
|
December 31, 2016
|
|
% of
Total Net Sales |
||||||
Net sales:
|
|
|
|
|
|
|
|
||||||
U.S. Retail
|
$
|
1,775,287
|
|
|
52.2
|
%
|
|
$
|
1,656,414
|
|
|
51.8
|
%
|
U.S. Wholesale
|
1,209,663
|
|
|
35.6
|
%
|
|
1,178,034
|
|
|
36.8
|
%
|
||
International
|
415,460
|
|
|
12.2
|
%
|
|
364,736
|
|
|
11.4
|
%
|
||
Total net sales
|
$
|
3,400,410
|
|
|
100.0
|
%
|
|
$
|
3,199,184
|
|
|
100.0
|
%
|
Store count at January 2, 2016
|
|
738
|
Openings in fiscal 2016
|
|
63
|
Closings in fiscal 2016
|
|
(9)
|
Store count at December 31, 2016
|
|
792
|
|
|
|
Openings in fiscal 2017
|
|
57
|
Closings in fiscal 2017
|
|
(19)
|
Store count at December 30, 2017
|
|
830
|
|
|
|
Approximate store projections for fiscal 2018:
|
|
|
Openings projected for fiscal 2018
|
|
50
|
Closings projected for fiscal 2018
|
|
(35)
|
Net increase projected for fiscal 2018
|
|
15
|
•
|
on-line purchases can easily be returned in our stores;
|
•
|
our stores increase on-line sales by providing customers opportunities to view, touch and/or try on physical merchandise before ordering on-line;
|
•
|
our in-store customers can order on-line in our stores; and
|
•
|
our customers can order on-line and ship to and pick-up in stores.
|
•
|
Increase of
$85.8 million
in comparable eCommerce sales, including sales of
Skip Hop
branded products on our U.S. eCommerce site;
|
•
|
Increase of
$81.8 million
in sales from new stores that are not yet comparable;
|
•
|
Decrease of
$41.7 million
in comparable store sales; and
|
•
|
Decrease of
$14.4 million
due to the effect of store closings.
|
•
|
Increase of
$55.7 million
from new sales of
Skip Hop
branded products; and
|
•
|
Decrease of
$24.0 million
in comparable sales of our other products, which primarily reflected a
2.7%
decrease in number of units shipped.
|
•
|
Increase of
$31.8 million
from sales of
Skip Hop
branded product to our wholesale customers
|
•
|
Increase of
$15.4 million
from the acquisition of Carter's Mexico;
|
•
|
Increase of
$15.0 million
from our company-operated retail stores in Canada;
|
•
|
Increase of
$8.5 million
from eCommerce net sales, primarily from our eCommerce sites in Canada and China; and
|
•
|
Decrease of
$20.0 million
from international wholesale customers across various markets.
|
|
|
Canada Retail Stores
|
|
Mexico Retail Stores (a)
|
|
|
|
|
|
Store count at January 2, 2016
|
|
147
|
|
(a)
|
Openings in fiscal 2016
|
|
17
|
|
(a)
|
Closings in fiscal 2016
|
|
—
|
|
(a)
|
Store count at December 31, 2016
|
|
164
|
|
(a)
|
|
|
|
|
|
Acquired through business acquisition in fiscal 2017
|
|
N/A
|
|
39
|
Openings in fiscal 2017
|
|
17
|
|
2
|
Closings in fiscal 2017
|
|
(2)
|
|
—
|
Store count at December 30, 2017
|
|
179
|
|
41
|
|
|
|
|
|
Approximate store projections for fiscal 2018:
|
|
|
|
|
Openings projected in fiscal 2018
|
|
11
|
|
7
|
Closings projected in fiscal 2018
|
|
—
|
|
—
|
Net increase projected for fiscal 2018
|
|
11
|
|
7
|
•
|
$48.2 million increase in expenses related to retail store operations, primarily due to new store openings;
|
•
|
$24.9 million in expenses for selling, distribution, and administrative expenses for Skip Hop;
|
•
|
$21.2 million for provisions for special employee compensation;
|
•
|
$17.4 million increase in expenses for eCommerce operations;
|
•
|
$6.4 million increase in expenses for marketing and brand management;
|
•
|
$3.0 million increase in expenses for in-housed sourcing operations; and
|
•
|
$2.5 million increase in expenses for other general and administrative expenses.
|
•
|
$4.4 million decrease in information technology and systems costs;
|
•
|
$3.6 million decrease in the fair value of the earn-out obligation for Skip Hop;
|
•
|
$2.4 million decrease in performance-based compensation expenses; and
|
•
|
$1.7 million decrease in amortization of the H.W. Carter & Sons trademarks.
|
(dollars in thousands)
|
|
U.S. Retail
|
|
U.S. Wholesale
|
|
International
|
|
Unallocated Corporate Expenses
|
|
Total
|
||||||||||
Operating income for fiscal 2016
|
|
$
|
212,581
|
|
|
$
|
260,953
|
|
|
$
|
59,194
|
|
|
$
|
(106,170
|
)
|
|
$
|
426,558
|
|
Favorable (unfavorable) change in fiscal 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit
|
|
76,268
|
|
|
11,902
|
|
|
15,745
|
|
|
250
|
|
|
104,165
|
|
|||||
Royalty income
|
|
3,224
|
|
|
(1,233
|
)
|
|
(1,625
|
)
|
|
—
|
|
|
366
|
|
|||||
SG&A expenses
|
|
(76,472
|
)
|
|
(19,532
|
)
|
|
(26,888
|
)
|
|
11,371
|
|
|
(111,521
|
)
|
|||||
Operating income for fiscal 2017
|
|
$
|
215,601
|
|
|
$
|
252,090
|
|
|
$
|
46,426
|
|
|
$
|
(94,549
|
)
|
|
$
|
419,568
|
|
|
|
U.S. Retail
|
|
U.S. Wholesale
|
|
International
|
|||
Operating margin for fiscal 2016
|
|
12.8
|
%
|
|
22.2
|
%
|
|
16.2
|
%
|
Favorable (unfavorable) bps changes in fiscal 2017:
|
|
|
|
|
|
|
|
||
Gross profit
|
|
80 bps
|
|
|
20 bps
|
|
|
(190) bps
|
|
Royalty income
|
|
10 bps
|
|
|
(20) bps
|
|
|
(60) bps
|
|
SG&A expenses
|
|
(160) bps
|
|
|
(140) bps
|
|
|
(250) bps
|
|
Operating margin for fiscal 2017
|
|
12.1
|
%
|
|
20.8
|
%
|
|
11.2
|
%
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
•
|
80 bps increase in gross profit primarily due to growth in higher-margin eCommerce business and lower product costs;
|
•
|
10 bps increase in royalty income; and
|
•
|
160 bps increase in SG&A expenses primarily due to a:
|
•
|
80 bps increase due to provisions for special employee compensation;
|
•
|
40 bps increase in expenses associated with eCommerce;
|
•
|
20 bps increase in expenses associated with new retail stores and store restructuring costs; and
|
•
|
20 bps increase in distribution expenses.
|
•
|
20 bps increase in gross profit due to favorable product costs;
|
•
|
20 bps decrease in royalty income primarily due to insourcing formerly licensed product categories; and
|
•
|
140 bps increase in SG&A expenses, primarily due to a:
|
•
|
190 bps decrease in gross profit due to changes in channel and customer mix;
|
•
|
60 bps decrease in royalty income related to the purchase of our Mexican licensee, and decreases in income from certain licensees due to the insourcing of formerly licensed product categories; and
|
•
|
250 bps increase in SG&A expenses, primarily due to a:
|
•
|
Decrease of $5.2 million in consulting expenses;
|
•
|
Decrease of $4.7 million in expenses related to information technology and systems;
|
•
|
Decrease of $2.6 million in insurance and other employee-related costs;
|
•
|
Decrease of $1.7 million in amortization expense for the H.W. Carter & Sons tradenames; and
|
•
|
Increase of $2.9 million due to provisions for special employee compensation.
|
|
|
Change from fiscal 2015 to fiscal 2016
|
||
Increase (Decrease)
|
|
|
|
|
Retail stores
|
|
(1.9)%
|
||
eCommerce
|
|
+21.5%
|
||
Total
|
|
+3.1%
|
|
For the fiscal year ended
|
||||||||||||
(dollars in thousands)
|
December 31, 2016
|
|
% of Total Net Sales
|
|
January 2, 2016
|
|
% of Total Net Sales
|
||||||
Net sales:
|
|
|
|
|
|
|
|
||||||
U.S. Retail
|
$
|
1,656,414
|
|
|
51.8
|
%
|
|
$
|
1,514,355
|
|
|
50.2
|
%
|
U.S. Wholesale
|
1,178,034
|
|
|
36.8
|
%
|
|
1,173,313
|
|
|
39.0
|
%
|
||
International
|
364,736
|
|
|
11.4
|
%
|
|
326,211
|
|
|
10.8
|
%
|
||
Total net sales
|
$
|
3,199,184
|
|
|
100.0
|
%
|
|
$
|
3,013,879
|
|
|
100.0
|
%
|
•
|
Increase of $106.4 million from new stores;
|
•
|
Increase of $69.3 million in eCommerce sales;
|
•
|
Decrease of $22.7 million in sales from new stores that are not yet comparable; and
|
•
|
Decrease of $11.0 million due to the impact of store closings.
|
•
|
Increase of $24.6 million from our Canadian retail stores;
|
•
|
Increase of $11.4 million from eCommerce, primarily driven by our eCommerce site in China;
|
•
|
Increase of $3.5 million from international wholesale businesses other than Canada; and
|
•
|
Decrease of $1.0 million in our Canada wholesale business due, in part, to the Target Canada bankruptcy that occurred in early 2015.
|
•
|
$53.3 million increase in expenses related to retail store operations, primarily due to new store openings;
|
•
|
$15.8 million increase in expenses related to our domestic and international eCommerce operations;
|
•
|
$7.8 million increase in expenses related to marketing and brand management;
|
•
|
$7.1 million increase in expenses related to information technology and systems;
|
•
|
$5.0 million increase in expenses related to distribution and freight;
|
•
|
$2.6 million increase in expenses related to other general and administrative expenses; and
|
•
|
$1.7 million increase in provisions for accounts receivable;
|
•
|
$5.9 million decrease in insurance and employer-related costs;
|
•
|
$4.5 million decrease in amortization of the H.W. Carter & Sons trademarks; and
|
•
|
$0.8 million decrease in performance-based compensation expenses.
|
(dollars in thousands)
|
|
U.S. Retail
|
|
U.S. Wholesale
|
|
International
|
|
Unallocated Corporate Expenses
|
|
Total
|
||||||||||
Operating income for fiscal 2015
|
|
$
|
210,971
|
|
|
$
|
245,767
|
|
|
$
|
47,004
|
|
|
$
|
(110,885
|
)
|
|
$
|
392,857
|
|
Favorable (unfavorable) change in fiscal 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit
|
|
79,092
|
|
|
16,282
|
|
|
25,438
|
|
|
313
|
|
|
121,125
|
|
|||||
Royalty income
|
|
524
|
|
|
(1,405
|
)
|
|
(370
|
)
|
|
—
|
|
|
(1,251
|
)
|
|||||
SG&A expenses
|
|
(78,006
|
)
|
|
309
|
|
|
(12,878
|
)
|
|
4,402
|
|
|
(86,173
|
)
|
|||||
Operating income for fiscal 2016
|
|
$
|
212,581
|
|
|
$
|
260,953
|
|
|
$
|
59,194
|
|
|
$
|
(106,170
|
)
|
|
$
|
426,558
|
|
|
|
U.S. Retail
|
|
U.S. Wholesale
|
|
International
|
|||
Operating margin for fiscal 2015
|
|
13.9
|
%
|
|
20.9
|
%
|
|
14.4
|
%
|
Favorable (unfavorable) bps change in fiscal 2016:
|
|
|
|
|
|
|
|||
Gross profit
|
|
30 bps
|
|
|
130 bps
|
|
|
220 bps
|
|
Royalty income
|
|
-
|
|
(10) bps
|
|
|
(30) bps
|
|
|
SG&A expenses
|
|
(140) bps
|
|
|
10 bps
|
|
|
(10) bps
|
|
Operating margin for fiscal 2016
|
|
12.8
|
%
|
|
22.2
|
%
|
|
16.2
|
%
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
•
|
30 bps increase in gross profit primarily due to favorable product costs, partially offset by lower average price per unit due to an increased promotional environment; and
|
•
|
140 bps increase in SG&A expenses mainly due to a:
|
•
|
100 bps increase in expenses associated with new retail stores;
|
•
|
30 bps increase in marketing expenses; and
|
•
|
10 bps increase in freight and distribution expenses.
|
•
|
130 bps increase in gross profit due to favorable product costs and improved pricing due to changes in product mix, partially offset by unfavorable sales channel mix;
|
•
|
10 bps decrease in SG&A expenses; and
|
•
|
10 bps decrease in royalty income.
|
•
|
220 bps increase in gross profit, primarily driven by growth in higher margin retail store and eCommerce channels, partially offset by unfavorable foreign exchange rates and higher provisions for inventory; and
|
•
|
30 bps decrease in royalty income due to a reduction in licensees.
|
•
|
Decrease of $4.8 million in insurance and other employer-related costs;
|
•
|
Decrease of $4.5 million in amortization expense for the H.W. Carter & Sons tradenames;
|
•
|
Decrease of $3.2 million in performance-based compensation expenses;
|
•
|
Increase of $6.3 million in other general and administrative expenses primarily due to advisory fees; and
|
•
|
Increase of $1.4 million in expenses related to information technology and systems.
|
|
Fiscal year ended
|
||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Number of shares repurchased
|
2,103,401
|
|
|
3,049,381
|
|
|
1,154,288
|
|
|||
Aggregate cost of shares repurchased
(dollars in thousands)
|
$
|
188.762
|
|
|
$
|
300,445
|
|
|
$
|
110,290
|
|
Average price per share
|
$
|
89.74
|
|
|
$
|
98.53
|
|
|
$
|
95.55
|
|
(dollars in thousands)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400,000
|
|
|
$
|
221,000
|
|
|
$
|
—
|
|
|
$
|
621,000
|
|
Interest on debt (a)
|
27,541
|
|
|
27,541
|
|
|
28,012
|
|
|
21,071
|
|
|
4,259
|
|
|
—
|
|
|
108,424
|
|
|||||||
Operating leases
|
168,719
|
|
|
154,866
|
|
|
139,016
|
|
|
124,102
|
|
|
108,029
|
|
|
322,473
|
|
|
1,017,205
|
|
|||||||
Other
|
535
|
|
|
231
|
|
|
231
|
|
|
231
|
|
|
231
|
|
|
211
|
|
|
1,670
|
|
|||||||
Total financial obligations
|
196,795
|
|
|
182,638
|
|
|
167,259
|
|
|
545,404
|
|
|
333,519
|
|
|
322,684
|
|
|
1,748,299
|
|
|||||||
Letters of credit
|
4,518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,518
|
|
|||||||
Total financial obligations and commitments (b) (c)
|
$
|
201,313
|
|
|
$
|
182,638
|
|
|
$
|
167,259
|
|
|
$
|
545,404
|
|
|
$
|
333,519
|
|
|
$
|
322,684
|
|
|
$
|
1,752,817
|
|
|
Page
|
Consolidated Balance Sheets at December 30, 2017 and December 31, 2016
|
|
Consolidated Statements of Operations for the fiscal years ended December 30, 2017, December 31, 2016, and January 2, 2016
|
|
Consolidated Statements of Comprehensive Income for the fiscal years ended December 30, 2017, December 31, 2016, and January 2, 2016
|
|
Consolidated Statements of Cash Flows for the fiscal years ended December 30, 2017, December 31, 2016, and January 2, 2016
|
|
Consolidated Statements of Changes in Stockholders' Equity for the fiscal years ended December 30, 2017, December 31, 2016, and January 2, 2016
|
|
|
December 30,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
178,494
|
|
|
$
|
299,358
|
|
Accounts receivable, net
|
240,561
|
|
|
202,471
|
|
||
Finished goods inventories
|
548,722
|
|
|
487,591
|
|
||
Prepaid expenses and other current assets
|
49,892
|
|
|
32,180
|
|
||
Deferred income taxes
|
—
|
|
|
35,486
|
|
||
Total current assets
|
1,017,669
|
|
|
1,057,086
|
|
||
Property, plant, and equipment, net
|
377,924
|
|
|
385,874
|
|
||
Tradenames, net
|
365,551
|
|
|
308,928
|
|
||
Goodwill
|
230,424
|
|
|
176,009
|
|
||
Customer relationships, net
|
47,996
|
|
|
—
|
|
||
Other assets
|
28,435
|
|
|
18,700
|
|
||
Total assets
|
$
|
2,067,999
|
|
|
$
|
1,946,597
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
182,114
|
|
|
$
|
158,432
|
|
Other current liabilities
|
146,510
|
|
|
119,177
|
|
||
Total current liabilities
|
328,624
|
|
|
277,609
|
|
||
|
|
|
|
||||
Long-term debt, net
|
617,306
|
|
|
580,376
|
|
||
Deferred income taxes
|
84,848
|
|
|
130,656
|
|
||
Other long-term liabilities
|
180,128
|
|
|
169,832
|
|
||
Total liabilities
|
1,210,906
|
|
|
1,158,473
|
|
||
|
|
|
|
||||
Commitments and contingencies - Note 17
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock; par value $.01 per share; 100,000 shares authorized; none issued or outstanding at December 30, 2017 and December 31, 2016
|
—
|
|
|
—
|
|
||
Common stock, voting; par value $.01 per share; 150,000,000 shares authorized; 47,178,346 and 48,948,670 shares issued and outstanding at December 30, 2017 and December 31, 2016, respectively
|
472
|
|
|
489
|
|
||
Additional paid-in capital
|
—
|
|
|
—
|
|
||
Accumulated other comprehensive loss
|
(29,093
|
)
|
|
(34,740
|
)
|
||
Retained earnings
|
885,714
|
|
|
822,375
|
|
||
Total stockholders’ equity
|
857,093
|
|
|
788,124
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,067,999
|
|
|
$
|
1,946,597
|
|
|
For the fiscal year ended
|
||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Net sales
|
$
|
3,400,410
|
|
|
$
|
3,199,184
|
|
|
$
|
3,013,879
|
|
Cost of goods sold
|
1,917,096
|
|
|
1,820,035
|
|
|
1,755,855
|
|
|||
Gross profit
|
1,483,314
|
|
|
1,379,149
|
|
|
1,258,024
|
|
|||
Selling, general, and administrative expenses
|
1,106,927
|
|
|
995,406
|
|
|
909,233
|
|
|||
Royalty income
|
(43,181
|
)
|
|
(42,815
|
)
|
|
(44,066
|
)
|
|||
Operating income
|
419,568
|
|
|
426,558
|
|
|
392,857
|
|
|||
Interest expense
|
30,044
|
|
|
27,044
|
|
|
27,031
|
|
|||
Interest income
|
(345
|
)
|
|
(563
|
)
|
|
(500
|
)
|
|||
Other (income) expense, net
|
(1,163
|
)
|
|
4,007
|
|
|
(1,862
|
)
|
|||
Income before income taxes
|
391,032
|
|
|
396,070
|
|
|
368,188
|
|
|||
Provision for income taxes
|
88,268
|
|
|
137,964
|
|
|
130,366
|
|
|||
Net income
|
$
|
302,764
|
|
|
$
|
258,106
|
|
|
$
|
237,822
|
|
|
|
|
|
|
|
||||||
Basic net income per common share
|
$
|
6.31
|
|
|
$
|
5.13
|
|
|
$
|
4.55
|
|
Diluted net income per common share
|
$
|
6.24
|
|
|
$
|
5.08
|
|
|
$
|
4.50
|
|
Dividend declared and paid per common share
|
$
|
1.48
|
|
|
$
|
1.32
|
|
|
$
|
0.88
|
|
|
For the fiscal year ended
|
||||||||||
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Net income
|
$
|
302,764
|
|
|
$
|
258,106
|
|
|
$
|
237,822
|
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Unrealized (loss) gain on OshKosh defined benefit plan, net of tax of $140, $400, ($470) for the fiscal years 2017, 2016, and 2015, respectively
|
(430
|
)
|
|
(666
|
)
|
|
803
|
|
|||
Unrealized gain (loss) on Carter's post-retirement benefit obligation, net of (tax) or tax benefit of $70, ($200), ($30) for fiscal years 2017, 2016, and 2015, respectively
|
(262
|
)
|
|
331
|
|
|
56
|
|
|||
Foreign currency translation adjustments
|
6,339
|
|
|
1,962
|
|
|
(14,189
|
)
|
|||
Total other comprehensive income
|
5,647
|
|
|
1,627
|
|
|
(13,330
|
)
|
|||
Comprehensive income
|
$
|
308,411
|
|
|
$
|
259,733
|
|
|
$
|
224,492
|
|
|
For the fiscal year ended
|
||||||||||
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
302,764
|
|
|
$
|
258,106
|
|
|
$
|
237,822
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
81,796
|
|
|
71,522
|
|
|
61,982
|
|
|||
Amortization of intangible assets
|
2,616
|
|
|
1,919
|
|
|
6,417
|
|
|||
Adjustment and accretion of contingent considerations
|
(3,600
|
)
|
|
—
|
|
|
809
|
|
|||
Amortization of debt issuance costs
|
1,572
|
|
|
1,461
|
|
|
1,603
|
|
|||
Non-cash stock-based compensation expense
|
17,549
|
|
|
16,847
|
|
|
17,029
|
|
|||
Unrealized foreign currency exchange (gain) loss, net
|
(624
|
)
|
|
33
|
|
|
4
|
|
|||
Income tax benefit from stock-based compensation
|
—
|
|
|
(4,800
|
)
|
|
(8,839
|
)
|
|||
Loss on disposal of property, plant, and equipment
|
1,572
|
|
|
1,167
|
|
|
870
|
|
|||
Deferred income taxes
|
(54,892
|
)
|
|
1,294
|
|
|
8,657
|
|
|||
Effect of changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(18,046
|
)
|
|
5,041
|
|
|
(23,837
|
)
|
|||
Inventories
|
(20,922
|
)
|
|
(17,482
|
)
|
|
(34,352
|
)
|
|||
Prepaid expenses and other assets
|
(21,339
|
)
|
|
2,060
|
|
|
(3,496
|
)
|
|||
Accounts payable and other liabilities
|
41,175
|
|
|
32,061
|
|
|
43,318
|
|
|||
Net cash provided by operating activities
|
329,621
|
|
|
369,229
|
|
|
307,987
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(69,473
|
)
|
|
(88,556
|
)
|
|
(103,497
|
)
|
|||
Acquisitions of businesses, net of cash acquired
|
(158,457
|
)
|
|
—
|
|
|
—
|
|
|||
Disposals of property, plant, and equipment
|
15
|
|
|
216
|
|
|
72
|
|
|||
Net cash used in investing activities
|
(227,915
|
)
|
|
(88,340
|
)
|
|
(103,425
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments of debt issuance costs
|
(2,119
|
)
|
|
—
|
|
|
(1,628
|
)
|
|||
Borrowings under secured revolving credit facility
|
200,000
|
|
|
—
|
|
|
205,586
|
|
|||
Payments on secured revolving credit facility
|
(163,965
|
)
|
|
—
|
|
|
(205,237
|
)
|
|||
Repurchases of common stock
|
(188,762
|
)
|
|
(300,445
|
)
|
|
(110,290
|
)
|
|||
Payment of contingent consideration
|
—
|
|
|
—
|
|
|
(7,572
|
)
|
|||
Dividends paid
|
(70,914
|
)
|
|
(66,355
|
)
|
|
(46,028
|
)
|
|||
Income tax benefit from stock-based compensation
|
—
|
|
|
4,800
|
|
|
8,839
|
|
|||
Withholdings of taxes from vesting of restricted stock
|
(5,753
|
)
|
|
(8,673
|
)
|
|
(12,651
|
)
|
|||
Proceeds from exercises of stock options
|
8,438
|
|
|
7,166
|
|
|
6,976
|
|
|||
Net cash used in financing activities
|
(223,075
|
)
|
|
(363,507
|
)
|
|
(162,005
|
)
|
|||
Net effect of exchange rate changes on cash
|
505
|
|
|
767
|
|
|
(1,986
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(120,864
|
)
|
|
(81,851
|
)
|
|
40,571
|
|
|||
Cash and cash equivalents, beginning of fiscal year
|
299,358
|
|
|
381,209
|
|
|
340,638
|
|
|||
Cash and cash equivalents, end of fiscal year
|
$
|
178,494
|
|
|
$
|
299,358
|
|
|
$
|
381,209
|
|
|
Common
stock - shares
|
|
Common
stock - $
|
|
Additional
paid-in
capital
|
|
Accumulated other comprehensive
(loss)
income
|
|
Retained
earnings
|
|
Total
stockholders’
equity
|
|||||||||||
Balance at January 3, 2015
|
52,712,193
|
|
|
$
|
527
|
|
|
$
|
—
|
|
|
$
|
(23,037
|
)
|
|
$
|
809,194
|
|
|
$
|
786,684
|
|
Income tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
8,839
|
|
|
—
|
|
|
—
|
|
|
8,839
|
|
|||||
Exercise of stock options
|
214,420
|
|
|
2
|
|
|
6,974
|
|
|
—
|
|
|
—
|
|
|
6,976
|
|
|||||
Withholdings from vesting of restricted stock
|
(147,339
|
)
|
|
(1
|
)
|
|
(12,650
|
)
|
|
—
|
|
|
—
|
|
|
(12,651
|
)
|
|||||
Restricted stock activity
|
128,390
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
15,934
|
|
|
—
|
|
|
—
|
|
|
15,934
|
|
|||||
Issuance of common stock
|
10,933
|
|
|
—
|
|
|
1,095
|
|
|
—
|
|
|
—
|
|
|
1,095
|
|
|||||
Repurchase of common stock
|
(1,154,288
|
)
|
|
(11
|
)
|
|
(20,191
|
)
|
|
—
|
|
|
(90,088
|
)
|
|
(110,290
|
)
|
|||||
Cash dividends declared and paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,028
|
)
|
|
(46,028
|
)
|
|||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,330
|
)
|
|
237,822
|
|
|
224,492
|
|
|||||
Balance at January 2, 2016
|
51,764,309
|
|
|
$
|
518
|
|
|
$
|
—
|
|
|
$
|
(36,367
|
)
|
|
$
|
910,900
|
|
|
$
|
875,051
|
|
Income tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
4,800
|
|
|
—
|
|
|
—
|
|
|
4,800
|
|
|||||
Exercise of stock options
|
160,200
|
|
|
2
|
|
|
7,164
|
|
|
—
|
|
|
—
|
|
|
7,166
|
|
|||||
Withholdings from vesting of restricted stock
|
(91,629
|
)
|
|
(1
|
)
|
|
(8,672
|
)
|
|
—
|
|
|
—
|
|
|
(8,673
|
)
|
|||||
Restricted stock activity
|
152,413
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
15,662
|
|
|
—
|
|
|
—
|
|
|
15,662
|
|
|||||
Issuance of common stock
|
12,758
|
|
|
—
|
|
|
1,185
|
|
|
—
|
|
|
—
|
|
|
1,185
|
|
|||||
Repurchases of common stock
|
(3,049,381
|
)
|
|
(31
|
)
|
|
(20,138
|
)
|
|
—
|
|
|
(280,276
|
)
|
|
(300,445
|
)
|
|||||
Cash dividends declared and paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,355
|
)
|
|
(66,355
|
)
|
|||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,627
|
|
|
258,106
|
|
|
259,733
|
|
|||||
Balance at December 31, 2016
|
48,948,670
|
|
|
$
|
489
|
|
|
$
|
—
|
|
|
$
|
(34,740
|
)
|
|
$
|
822,375
|
|
|
$
|
788,124
|
|
Exercise of stock options
|
240,850
|
|
|
2
|
|
|
8,436
|
|
|
—
|
|
|
—
|
|
|
8,438
|
|
|||||
Withholdings from vesting of restricted stock
|
(67,546
|
)
|
|
(1
|
)
|
|
(5,752
|
)
|
|
—
|
|
|
—
|
|
|
(5,753
|
)
|
|||||
Restricted stock activity
|
145,913
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
16,378
|
|
|
—
|
|
|
—
|
|
|
16,378
|
|
|||||
Issuance of common stock
|
13,860
|
|
|
1
|
|
|
1,170
|
|
|
—
|
|
|
—
|
|
|
1,171
|
|
|||||
Repurchases of common stock
|
(2,103,401
|
)
|
|
(21
|
)
|
|
(20,230
|
)
|
|
—
|
|
|
(168,511
|
)
|
|
(188,762
|
)
|
|||||
Cash dividends declared and paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,914
|
)
|
|
(70,914
|
)
|
|||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
5,647
|
|
|
302,764
|
|
|
308,411
|
|
|||||
Balance at December 30, 2017
|
47,178,346
|
|
|
$
|
472
|
|
|
$
|
—
|
|
|
$
|
(29,093
|
)
|
|
$
|
885,714
|
|
|
$
|
857,093
|
|
(dollars in thousands)
|
December 30,
2017 |
|
December 31,
2016 |
||||
Trade receivables from wholesale customers, net
|
$
|
229,968
|
|
|
$
|
182,195
|
|
Royalties receivable
|
9,818
|
|
|
9,218
|
|
||
Tenant allowances and other receivables
|
14,511
|
|
|
19,810
|
|
||
Total gross receivables
|
$
|
254,297
|
|
|
$
|
211,223
|
|
Less:
|
|
|
|
||||
Wholesale accounts receivable reserves
|
(13,736
|
)
|
|
(8,752
|
)
|
||
Accounts receivable, net
|
$
|
240,561
|
|
|
$
|
202,471
|
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2:
|
Quoted prices for similar assets and liabilities in active markets or inputs that are observable.
|
Level
3:
|
Unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability.
|
(in millions)
|
|
|
||
|
|
|
||
Assets acquired:
|
|
|
||
Current assets, including cash acquired of $0.8 million
|
|
$
|
50.0
|
|
Goodwill *
|
|
46.0
|
|
|
Tradename
|
|
56.8
|
|
|
Customer relationships
|
|
47.3
|
|
|
Other non-current assets
|
|
3.9
|
|
|
Total assets acquired
|
|
$
|
204.0
|
|
|
|
|
||
Liabilities assumed:
|
|
|
||
Current liabilities
|
|
$
|
20.8
|
|
Deferred income tax liabilities
|
|
36.3
|
|
|
Total liabilities assumed
|
|
$
|
57.1
|
|
|
|
.
|
||
Net assets acquired
|
|
$
|
146.9
|
|
Less cash acquired at acquisition
|
|
$
|
(0.8
|
)
|
Less estimated contingent consideration (1)
|
|
$
|
(3.6
|
)
|
Net purchase price (2)
|
|
$
|
142.5
|
|
|
|
|
||
* Not deductible for income taxes
|
|
|
(dollars in thousands)
|
December 30,
2017 |
|
December 31,
2016 |
||||
Fixtures, equipment, computer hardware and software
|
$
|
430,156
|
|
|
$
|
398,536
|
|
Land, building, and leasehold improvements
|
336,981
|
|
|
305,844
|
|
||
Marketing fixtures
|
7,602
|
|
|
7,015
|
|
||
Construction in progress
|
7,358
|
|
|
20,386
|
|
||
|
782,097
|
|
|
731,781
|
|
||
Accumulated depreciation and amortization
|
(404,173
|
)
|
|
(345,907
|
)
|
||
Total
|
$
|
377,924
|
|
|
$
|
385,874
|
|
|
|
|
December 30, 2017
|
|
|
December 31, 2016
|
||||||||||||||||||||
(dollars in thousands)
|
Weighted-average useful life
|
|
Gross amount
|
|
Accumulated amortization
|
|
Net amount
|
|
|
Gross amount
|
|
Accumulated amortization
|
|
Net amount
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carter’s goodwill (1)
|
Indefinite
|
|
$
|
136,570
|
|
|
$
|
—
|
|
|
$
|
136,570
|
|
|
|
$
|
136,570
|
|
|
$
|
—
|
|
|
$
|
136,570
|
|
Canada goodwill (2)
|
Indefinite
|
|
42,223
|
|
|
—
|
|
|
42,223
|
|
|
|
39,439
|
|
|
—
|
|
|
39,439
|
|
||||||
Skip Hop goodwill (3)
|
Indefinite
|
|
45,997
|
|
|
—
|
|
|
45,997
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Carter's Mexico goodwill (4)
|
Indefinite
|
|
5,634
|
|
|
—
|
|
|
5,634
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total goodwill
|
|
|
$
|
230,424
|
|
|
$
|
—
|
|
|
$
|
230,424
|
|
|
|
$
|
176,009
|
|
|
$
|
—
|
|
|
$
|
176,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carter’s
tradename
|
Indefinite
|
|
$
|
220,233
|
|
|
$
|
—
|
|
|
$
|
220,233
|
|
|
|
$
|
220,233
|
|
|
$
|
—
|
|
|
$
|
220,233
|
|
OshKosh
tradename
|
Indefinite
|
|
85,500
|
|
|
—
|
|
|
85,500
|
|
|
|
85,500
|
|
|
—
|
|
|
85,500
|
|
||||||
Skip Hop
tradename
|
Indefinite
|
|
56,800
|
|
|
—
|
|
|
56,800
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Finite-life tradenames (5)
|
2 - 20 years
|
|
3,550
|
|
|
532
|
|
|
3,018
|
|
|
|
42,005
|
|
|
38,810
|
|
|
3,195
|
|
||||||
Total tradenames, net
|
|
|
$
|
366,083
|
|
|
$
|
532
|
|
|
$
|
365,551
|
|
|
|
$
|
347,738
|
|
|
$
|
38,810
|
|
|
$
|
308,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Skip Hop customer relationships
|
15 years
|
|
$
|
47,300
|
|
|
$
|
2,304
|
|
|
$
|
44,996
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Carter's Mexico customer relationships
|
10 years
|
|
3,135
|
|
|
135
|
|
|
3,000
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total customer relationships, net
|
|
|
$
|
50,435
|
|
|
$
|
2,439
|
|
|
$
|
47,996
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
$45.9 million
is assigned to the U.S. Wholesale segment,
$82.0 million
is assigned to the U.S. Retail segment, and
$8.6 million
is assigned to the International segment.
|
(2)
|
Goodwill for Canada (Bonnie Togs) is assigned to the International segment.
|
(3)
|
$28.6 million
is assigned to the U.S. Wholesale segment,
$15.5 million
is assigned to the International segment, and
$1.9 million
is assigned to the U.S. Retail segment.
|
(4)
|
Goodwill for Carter's Mexico is assigned to the International segment.
|
(5)
|
Relates to the acquisition of rights to the
Carter's
brand in Chile in December 2014. The Company acquired these rights in order to freely operate in Chile by offering products and service under the
Carter's
brand. Amounts at December 31, 2016 also include the former
Bonnie Togs
(Canada) tradename and the
H.W. Carter & Sons
brands, which are all fully amortized.
|
(dollars in thousands)
|
Pension liability adjustments
|
|
Post-retirement liability adjustments
|
|
Cumulative translation adjustments
|
|
Accumulated other comprehensive (loss) income
|
||||||||
Balance at January 3, 2015
|
$
|
(8,988
|
)
|
|
$
|
1,348
|
|
|
$
|
(15,397
|
)
|
|
$
|
(23,037
|
)
|
Fiscal year 2015 change
|
803
|
|
|
56
|
|
|
(14,189
|
)
|
|
(13,330
|
)
|
||||
Balance at January 2, 2016
|
(8,185
|
)
|
|
1,404
|
|
|
(29,586
|
)
|
|
(36,367
|
)
|
||||
Fiscal year 2016 change
|
(666
|
)
|
|
331
|
|
|
1,962
|
|
|
1,627
|
|
||||
Balance at December 31, 2016
|
(8,851
|
)
|
|
1,735
|
|
|
(27,624
|
)
|
|
(34,740
|
)
|
||||
Fiscal year 2017 change
|
(430
|
)
|
|
(262
|
)
|
|
6,339
|
|
|
5,647
|
|
||||
Balance at December 30, 2017
|
$
|
(9,281
|
)
|
|
$
|
1,473
|
|
|
$
|
(21,285
|
)
|
|
$
|
(29,093
|
)
|
(dollars in thousands)
|
December 30,
2017 |
|
December 31,
2016 |
||||
Senior notes at amounts repayable
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Less: unamortized issuance-related costs for senior notes
|
(3,694
|
)
|
|
(4,601
|
)
|
||
Senior notes, net
|
$
|
396,306
|
|
|
$
|
395,399
|
|
Secured revolving credit facility
|
221,000
|
|
|
184,977
|
|
||
Total long-term debt, net
|
$
|
617,306
|
|
|
$
|
580,376
|
|
Year
|
|
Percentage
|
|
2017
|
|
102.63
|
%
|
2018
|
|
101.31
|
%
|
2019 and thereafter
|
|
100.00
|
%
|
|
Fiscal year ended
|
||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Number of shares repurchased
|
2,103,401
|
|
|
3,049,381
|
|
|
1,154,288
|
|
|||
Aggregate cost of shares repurchased
(dollars in thousands)
|
$
|
188,762
|
|
|
$
|
300,445
|
|
|
$
|
110,290
|
|
Average price per share
|
$
|
89.74
|
|
|
$
|
98.53
|
|
|
$
|
95.55
|
|
|
For the fiscal years ended
|
||||||||||
(dollars in thousands)
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Stock options
|
$
|
4,244
|
|
|
$
|
4,237
|
|
|
$
|
4,350
|
|
Restricted stock:
|
|
|
|
|
|
||||||
Time-based awards
|
7,532
|
|
|
7,451
|
|
|
6,855
|
|
|||
Performance-based awards
|
4,602
|
|
|
3,974
|
|
|
4,728
|
|
|||
Stock awards
|
1,171
|
|
|
1,185
|
|
|
1,096
|
|
|||
Total
|
$
|
17,549
|
|
|
$
|
16,847
|
|
|
$
|
17,029
|
|
|
Number of shares
|
|
Weighted- average exercise price
|
|
Weighted-average remaining contractual terms (years)
|
|
Aggregate intrinsic value
(in thousands)
|
|||
|
|
|
|
|
|
|
|
|||
Outstanding, December 31, 2016
|
1,441,210
|
|
|
$52.70
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
Granted
|
338,356
|
|
|
$84.29
|
|
|
|
|
||
Exercised
|
(240,850
|
)
|
|
$35.03
|
|
|
|
|
||
Forfeited
|
(40,828
|
)
|
|
$83.99
|
|
|
|
|
||
Expired
|
(3,665
|
)
|
|
$87.46
|
|
|
|
|
||
Outstanding, December 30, 2017
|
1,494,223
|
|
|
$61.76
|
|
5.87
|
|
$
|
83,277
|
|
|
|
|
|
|
|
|
|
|||
Vested and Expected to Vest, December 30, 2017
|
1,422,339
|
|
|
$60.53
|
|
5.72
|
|
$
|
81,011
|
|
Exercisable, December 30, 2017
|
907,065
|
|
|
$46.77
|
|
4.19
|
|
$
|
64,145
|
|
|
For the fiscal years ended
|
||||||||||
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Expected volatility
|
26.20
|
%
|
|
26.95
|
%
|
|
31.65
|
%
|
|||
Risk-free interest rate
|
2.06
|
%
|
|
1.33
|
%
|
|
1.65
|
%
|
|||
Expected term (years)
|
6.0
|
|
|
6.0
|
|
6.0
|
|||||
Dividend yield
|
1.77
|
%
|
|
1.45
|
%
|
|
1.06
|
%
|
|||
Weighted average fair value of options granted
|
$
|
19.57
|
|
|
$
|
21.41
|
|
|
$
|
24.59
|
|
|
Restricted
stock
awards
|
|
Weighted-average grant-date
fair value
|
|||
Outstanding, December 31, 2016
|
405,699
|
|
|
$
|
81.29
|
|
Granted
|
178,240
|
|
|
$
|
84.11
|
|
Vested
|
(168,471
|
)
|
|
$
|
74.00
|
|
Forfeited
|
(17,620
|
)
|
|
$
|
83.92
|
|
Outstanding, December 30, 2017
|
397,848
|
|
|
$
|
85.44
|
|
Fiscal year
|
|
Number of shares granted
|
|
Weighted-average fair value per share
|
|||
2015
|
|
50,600
|
|
|
$
|
82.40
|
|
2016
|
|
53,070
|
|
|
$
|
90.66
|
|
2017
|
|
60,952
|
|
|
$
|
83.84
|
|
|
Number of shares issued
|
|
Fair value per share
|
|
Aggregate value (in thousands)
|
2015
|
10,933
|
|
$100.21
|
|
$1,095
|
2016
|
12,758
|
|
$101.10
|
|
$1,290
|
2017
|
13,860
|
|
$84.46
|
|
$1,171
|
|
For the fiscal year ended
|
||||||
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation at beginning of year
|
$
|
62,427
|
|
|
$
|
60,375
|
|
Interest cost
|
2,446
|
|
|
2,515
|
|
||
Actuarial loss
|
4,269
|
|
|
1,697
|
|
||
Benefits paid
|
(2,395
|
)
|
|
(2,160
|
)
|
||
Projected benefit obligation at end of year
|
$
|
66,747
|
|
|
$
|
62,427
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
51,213
|
|
|
$
|
50,619
|
|
Actual return on plan assets
|
5,619
|
|
|
2,754
|
|
||
Benefits paid
|
(2,395
|
)
|
|
(2,160
|
)
|
||
Fair value of plan assets at end of year
|
$
|
54,437
|
|
|
$
|
51,213
|
|
|
|
|
|
||||
Unfunded status
|
$
|
12,310
|
|
|
$
|
11,214
|
|
|
For the fiscal year ended
|
||||||||||
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Recognized in the statement of operations:
|
|
|
|
|
|
||||||
Interest cost
|
$
|
2,446
|
|
|
$
|
2,515
|
|
|
$
|
2,493
|
|
Expected return on plan assets
|
(2,601
|
)
|
|
(2,701
|
)
|
|
(3,138
|
)
|
|||
Recognized actuarial loss (a)
|
681
|
|
|
578
|
|
|
643
|
|
|||
Net periodic pension cost (benefit)
|
$
|
526
|
|
|
$
|
392
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
||||||
Changes recognized in other comprehensive income:
|
|||||||||||
Net loss (gain) arising during the fiscal year
|
$
|
1,251
|
|
|
$
|
1,644
|
|
|
$
|
(630
|
)
|
Amortization of net loss (a)
|
(681
|
)
|
|
(578
|
)
|
|
(643
|
)
|
|||
Total changes recognized in other comprehensive income
|
$
|
570
|
|
|
$
|
1,066
|
|
|
$
|
(1,273
|
)
|
Total net periodic cost (benefit) and changes recognized in other comprehensive income
|
$
|
1,096
|
|
|
$
|
1,458
|
|
|
$
|
(1,275
|
)
|
Benefit obligation
|
2017
|
|
2016
|
|
|
Discount rate
|
3.50%
|
|
4.00%
|
|
|
|
|
|
|
|
|
Net periodic pension cost
|
2017
|
|
2016
|
|
2015
|
Discount rate
|
4.00%
|
|
4.25%
|
|
4.00%
|
Expected long-term rate of return on assets
|
6.00%
|
|
6.00%
|
|
6.00%
|
|
|
December 30, 2017
|
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(dollars in thousands)
Asset Category
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
||||||||||||
Cash and cash equivalents
|
|
$
|
539
|
|
|
$
|
539
|
|
|
$
|
—
|
|
|
|
$
|
175
|
|
|
$
|
175
|
|
|
$
|
—
|
|
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Large-Cap blend (a)
|
|
7,418
|
|
|
7,418
|
|
|
—
|
|
|
|
8,462
|
|
|
4,221
|
|
|
4,241
|
|
||||||
U.S. Large-Cap growth
|
|
3,331
|
|
|
3,331
|
|
|
—
|
|
|
|
4,220
|
|
|
4,220
|
|
|
—
|
|
||||||
U.S. Mid-Cap growth
|
|
3,228
|
|
|
3,228
|
|
|
—
|
|
|
|
2,533
|
|
|
—
|
|
|
2,533
|
|
||||||
U.S. Small-Cap blend
|
|
2,147
|
|
|
2,147
|
|
|
—
|
|
|
|
2,514
|
|
|
2,514
|
|
|
—
|
|
||||||
International blend
|
|
8,142
|
|
|
8,142
|
|
|
—
|
|
|
|
2,569
|
|
|
2,569
|
|
|
—
|
|
||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate bonds (b)
|
|
26,888
|
|
|
26,480
|
|
|
408
|
|
|
|
25,573
|
|
|
25,573
|
|
|
—
|
|
||||||
Real estate (c)
|
|
2,744
|
|
|
2,744
|
|
|
—
|
|
|
|
5,167
|
|
|
5,167
|
|
|
—
|
|
||||||
|
|
$
|
54,437
|
|
|
$
|
54,029
|
|
|
$
|
408
|
|
|
|
$
|
51,213
|
|
|
$
|
44,439
|
|
|
$
|
6,774
|
|
|
For the fiscal years ended
|
||||||
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
APBO at beginning of fiscal year
|
$
|
4,125
|
|
|
$
|
4,938
|
|
Service cost
|
30
|
|
|
123
|
|
||
Interest cost
|
137
|
|
|
177
|
|
||
Actuarial loss (gain)
|
26
|
|
|
(740
|
)
|
||
Plan participants' contribution
|
6
|
|
|
10
|
|
||
Prior service cost
|
—
|
|
|
11
|
|
||
Benefits paid
|
(355
|
)
|
|
(394
|
)
|
||
APBO at end of fiscal year
|
$
|
3,969
|
|
|
$
|
4,125
|
|
|
|
For the fiscal year ended
|
||||||||||
(dollars in thousands)
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
|
|
|
|
|
|
|
||||||
Recognized in the statement of operations:
|
|
|
|
|
|
|
||||||
Service cost – benefits attributed to service during the period
|
|
$
|
30
|
|
|
$
|
123
|
|
|
$
|
130
|
|
Interest cost on accumulated post-retirement benefit obligation
|
|
137
|
|
|
177
|
|
|
178
|
|
|||
Amortization net actuarial gain (a)
|
|
(306
|
)
|
|
(198
|
)
|
|
(192
|
)
|
|||
Net periodic post-retirement (benefit) cost
|
|
$
|
(139
|
)
|
|
$
|
102
|
|
|
$
|
116
|
|
|
|
|
|
|
|
|
||||||
Changes recognized in other comprehensive income:
|
||||||||||||
Net loss (gain) arising during the fiscal year
|
|
$
|
26
|
|
|
$
|
(740
|
)
|
|
$
|
(278
|
)
|
Prior service cost
|
|
—
|
|
|
11
|
|
|
—
|
|
|||
Amortization of net gain (a)
|
|
306
|
|
|
198
|
|
|
192
|
|
|||
Total changes recognized in other comprehensive income
|
|
$
|
332
|
|
|
$
|
(531
|
)
|
|
$
|
(86
|
)
|
Total net periodic (benefit) cost and changes recognized in other comprehensive income
|
|
$
|
193
|
|
|
$
|
(429
|
)
|
|
$
|
30
|
|
|
2017
|
|
2016
|
|
|
Benefit obligation
|
|
|
|
|
|
Discount rate
|
3.25%
|
|
3.50%
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
Net periodic pension cost
|
|
|
|
|
|
Discount rate
|
3.50%
|
|
3.75%
|
|
3.50%
|
|
For the fiscal year ended
|
||||||||||
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Current tax provision:
|
|
|
|
|
|
||||||
Federal
|
$
|
117,676
|
|
|
$
|
113,326
|
|
|
$
|
103,316
|
|
State
|
11,368
|
|
|
11,407
|
|
|
10,277
|
|
|||
Foreign
|
14,116
|
|
|
11,937
|
|
|
8,116
|
|
|||
Total current provision
|
$
|
143,160
|
|
|
$
|
136,670
|
|
|
$
|
121,709
|
|
|
|
|
|
|
|
||||||
Deferred tax provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
(55,149
|
)
|
|
$
|
1,435
|
|
|
$
|
6,577
|
|
State
|
339
|
|
|
345
|
|
|
1,193
|
|
|||
Foreign
|
(82
|
)
|
|
(486
|
)
|
|
887
|
|
|||
Total deferred provision
|
(54,892
|
)
|
|
1,294
|
|
|
8,657
|
|
|||
Total provision
|
$
|
88,268
|
|
|
$
|
137,964
|
|
|
$
|
130,366
|
|
|
For the fiscal year ended
|
||||||||||
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Domestic
|
$
|
325,580
|
|
|
$
|
345,304
|
|
|
$
|
335,955
|
|
Foreign
|
65,452
|
|
|
50,766
|
|
|
32,233
|
|
|||
Total
|
$
|
391,032
|
|
|
$
|
396,070
|
|
|
$
|
368,188
|
|
|
For the fiscal year ended
|
|||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|||
Statutory federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal income tax benefit
|
2.1
|
%
|
|
2.3
|
%
|
|
2.5
|
%
|
Impact of foreign operations
|
(2.7
|
)%
|
|
(2.1
|
)%
|
|
(1.3
|
)%
|
Settlement of uncertain tax positions
|
(0.3
|
)%
|
|
(0.4
|
)%
|
|
(0.8
|
)%
|
Benefit from stock-based compensation
|
(1.3
|
)%
|
|
—
|
%
|
|
—
|
%
|
Imposition of transition tax on foreign subsidiaries
|
2.7
|
%
|
|
—
|
%
|
|
—
|
%
|
Revaluation of deferred taxes
|
(12.9
|
)%
|
|
—
|
%
|
|
—
|
%
|
Total
|
22.6
|
%
|
|
34.8
|
%
|
|
35.4
|
%
|
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Deferred tax assets:
|
Assets (Liabilities)
|
||||||
Accounts receivable allowance
|
$
|
3,632
|
|
|
$
|
3,873
|
|
Inventory
|
5,353
|
|
|
9,226
|
|
||
Accrued liabilities
|
9,895
|
|
|
16,037
|
|
||
Equity-based compensation
|
6,796
|
|
|
9,967
|
|
||
Deferred employee benefits
|
7,870
|
|
|
10,340
|
|
||
Deferred rent
|
24,567
|
|
|
46,685
|
|
||
Other
|
2,407
|
|
|
5,192
|
|
||
Total deferred tax assets
|
60,520
|
|
|
101,320
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation
|
(49,509
|
)
|
|
(90,317
|
)
|
||
Tradename and licensing agreements
|
(89,143
|
)
|
|
(101,632
|
)
|
||
Other
|
(4,774
|
)
|
|
(4,541
|
)
|
||
Total deferred tax liabilities
|
(143,426
|
)
|
|
(196,490
|
)
|
||
|
|
|
|
||||
Net deferred tax asset (liability)
|
$
|
(82,906
|
)
|
|
$
|
(95,170
|
)
|
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
|
Assets (Liabilities)
|
||||||
Deferred tax assets
|
$
|
1,942
|
|
|
$
|
35,486
|
|
Deferred tax liabilities
|
(84,848
|
)
|
|
(130,656
|
)
|
||
Net deferred tax asset (liability)
|
$
|
(82,906
|
)
|
|
$
|
(95,170
|
)
|
(dollars in thousands)
|
|
||
Balance at January 3, 2015
|
$
|
11,311
|
|
Additions based on tax positions related to fiscal 2015
|
2,840
|
|
|
Additions for prior year tax positions
|
(260
|
)
|
|
Reductions for lapse of statute of limitations
|
(1,427
|
)
|
|
Reductions for prior year tax settlements
|
(3,049
|
)
|
|
Balance at January 2, 2016
|
$
|
9,415
|
|
Additions based on tax positions related to fiscal 2016
|
2,849
|
|
|
Reductions for prior year tax positions
|
(39
|
)
|
|
Reductions for lapse of statute of limitations
|
(995
|
)
|
|
Reductions for prior year tax settlements
|
(693
|
)
|
|
Balance at December 31, 2016
|
$
|
10,537
|
|
Additions based on tax positions related to fiscal 2017
|
3,380
|
|
|
Reductions for prior year tax positions
|
(120
|
)
|
|
Reductions for lapse of statute of limitations
|
(1,604
|
)
|
|
Balance at December 30, 2017
|
$
|
12,193
|
|
|
For the fiscal year ended
|
||||||||||
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Weighted-average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
||||||
Basic number of common shares outstanding
|
47,593,211
|
|
|
49,917,858
|
|
|
51,835,053
|
|
|||
Dilutive effect of equity awards
|
552,864
|
|
|
457,849
|
|
|
499,583
|
|
|||
Diluted number of common and common equivalent shares outstanding
|
48,146,075
|
|
|
50,375,707
|
|
|
52,334,636
|
|
|||
Earnings per share:
|
|
|
|
|
|
||||||
(dollars in thousands, except per share data)
|
|
|
|
|
|
||||||
Basic net income per common share:
|
|
|
|
|
|
||||||
Net income
|
$
|
302,764
|
|
|
$
|
258,106
|
|
|
$
|
237,822
|
|
Income allocated to participating securities
|
(2,406
|
)
|
|
(2,049
|
)
|
|
(2,184
|
)
|
|||
Net income available to common shareholders
|
$
|
300,358
|
|
|
$
|
256,057
|
|
|
$
|
235,638
|
|
Basic net income per common share
|
$
|
6.31
|
|
|
$
|
5.13
|
|
|
$
|
4.55
|
|
|
|
|
|
|
|
||||||
Diluted net income per common share:
|
|
|
|
|
|
||||||
Net income
|
$
|
302,764
|
|
|
$
|
258,106
|
|
|
$
|
237,822
|
|
Income allocated to participating securities
|
(2,385
|
)
|
|
(2,035
|
)
|
|
(2,167
|
)
|
|||
Net income available to common shareholders
|
$
|
300,379
|
|
|
$
|
256,071
|
|
|
$
|
235,655
|
|
Diluted net income per common share
|
$
|
6.24
|
|
|
$
|
5.08
|
|
|
$
|
4.50
|
|
|
|
|
|
|
|
||||||
Anti-dilutive shares excluded from dilutive earnings per share calculations (1)
|
629,944
|
|
|
247,460
|
|
|
192,740
|
|
|
For the fiscal year ended
|
|||||||||||||||||||
(dollars in thousands)
|
December 30,
2017 |
|
% of
Total |
|
December 31,
2016 |
|
% of
Total |
|
January 2,
2016 |
|
% of Total
|
|||||||||
Net sales
:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Retail (a)
|
$
|
1,775,287
|
|
|
52.2
|
%
|
|
$
|
1,656,414
|
|
|
51.8
|
%
|
|
$
|
1,514,355
|
|
|
50.2
|
%
|
U.S. Wholesale
|
1,209,663
|
|
|
35.6
|
%
|
|
1,178,034
|
|
|
36.8
|
%
|
|
1,173,313
|
|
|
39.0
|
%
|
|||
International (b)
|
415,460
|
|
|
12.2
|
%
|
|
364,736
|
|
|
11.4
|
%
|
|
326,211
|
|
|
10.8
|
%
|
|||
Total net sales
|
$
|
3,400,410
|
|
|
100.0
|
%
|
|
$
|
3,199,184
|
|
|
100.0
|
%
|
|
$
|
3,013,879
|
|
|
100.0
|
%
|
Operating income
:
|
|
|
% of
segment net sales |
|
|
|
% of
segment net sales |
|
|
|
% of
segment net sales |
|||||||||
U.S. Retail (c) (g)
|
$
|
215,601
|
|
|
12.1
|
%
|
|
$
|
212,581
|
|
|
12.8
|
%
|
|
$
|
210,971
|
|
|
13.9
|
%
|
U.S. Wholesale (d) (g)
|
252,090
|
|
|
20.8
|
%
|
|
260,953
|
|
|
22.2
|
%
|
|
245,767
|
|
|
20.9
|
%
|
|||
International (e) (g)
|
46,426
|
|
|
11.2
|
%
|
|
59,194
|
|
|
16.2
|
%
|
|
47,004
|
|
|
14.4
|
%
|
|||
Corporate expenses (f) (h)
|
(94,549
|
)
|
|
|
|
(106,170
|
)
|
|
|
|
(110,885
|
)
|
|
|
||||||
Total operating income
|
$
|
419,568
|
|
|
12.3
|
%
|
|
$
|
426,558
|
|
|
13.3
|
%
|
|
$
|
392,857
|
|
|
13.0
|
%
|
(a)
|
Includes retail stores and eCommerce results.
|
(b)
|
Includes international retail, eCommerce, and wholesale sales.
|
(c)
|
Fiscal 2017 includes approximately
$2.7 million
of expenses related to store restructuring and approximately
$12.7 million
for provisions for special employee compensation.
|
(d)
|
Fiscal 2017 includes approximately
$3.3 million
for provisions for special employee compensation.
|
(e)
|
Includes international licensing income. Fiscal 2017 includes approximately
$2.3 million
for provisions for special employee compensation. Fiscal 2015 includes approximately
$1.9 million
of charges related to the revaluation of contingent consideration.
|
(f)
|
Includes expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, building occupancy, information technology, certain legal fees, consulting, and audit fees.
|
(g)
|
An aggregate of
$1.2 million
of certain costs related to inventory acquired from Skip Hop are included in the operating income of U.S. Wholesale, U.S. Retail, and International for fiscal 2017.
|
|
|
For the fiscal year ended
|
||||||||||
(dollars in millions)
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Provisions for special employee compensation
|
|
$
|
2.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization of H.W. Carter and Sons tradenames
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
6.2
|
|
Adjustment to Skip Hop contingent consideration
|
|
$
|
(3.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Direct sourcing initiative
|
|
$
|
0.3
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
Acquisition-related costs
|
|
$
|
3.4
|
|
|
$
|
2.4
|
|
|
$
|
—
|
|
|
For the fiscal year ended
|
||||||
(dollars in thousands)
|
December 30,
2017 |
|
December 31,
2016 |
||||
U.S. Wholesale
|
$
|
389,484
|
|
|
$
|
328,437
|
|
U.S. Retail
|
93,404
|
|
|
99,001
|
|
||
International
|
65,834
|
|
|
60,153
|
|
||
Total
|
$
|
548,722
|
|
|
$
|
487,591
|
|
|
For the fiscal year ended
|
||||||||||
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Baby
|
$
|
1,271,153
|
|
|
$
|
1,241,701
|
|
|
$
|
1,173,002
|
|
Playclothes
|
1,249,735
|
|
|
1,215,238
|
|
|
1,182,281
|
|
|||
Sleepwear
|
423,401
|
|
|
407,160
|
|
|
378,419
|
|
|||
Other (a)
|
456,121
|
|
|
335,085
|
|
|
280,177
|
|
|||
Total net sales
|
$
|
3,400,410
|
|
|
$
|
3,199,184
|
|
|
$
|
3,013,879
|
|
|
For the fiscal year ended
|
||||||
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
United States
|
$
|
337,369
|
|
|
$
|
349,877
|
|
International
|
40,555
|
|
|
35,997
|
|
||
Total
|
$
|
377,924
|
|
|
$
|
385,874
|
|
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Accrued bonuses and incentive compensation
|
$
|
27,566
|
|
|
$
|
16,834
|
|
Accrued employee benefits
|
21,735
|
|
|
17,165
|
|
||
Accrued and deferred rent
|
18,213
|
|
|
15,632
|
|
(dollars in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Deferred lease incentives
|
$
|
75,104
|
|
|
$
|
74,015
|
|
Fiscal Year
|
Operating Leases
|
||
2018
|
$
|
168,719
|
|
2019
|
154,866
|
|
|
2020
|
139,016
|
|
|
2021
|
124,102
|
|
|
2022
|
108,029
|
|
|
Thereafter
|
322,473
|
|
|
Total
|
$
|
1,017,205
|
|
(dollars in thousands)
|
Wholesale accounts receivable reserves
|
|
Wholesale sales returns reserves
|
|
Total
|
||||||
Balance at January 3, 2015
|
$
|
11,808
|
|
|
$
|
400
|
|
|
$
|
12,208
|
|
Additional provisions
|
4,170
|
|
|
264
|
|
|
4,434
|
|
|||
Charges to reserve
|
(7,435
|
)
|
|
(264
|
)
|
|
(7,699
|
)
|
|||
Balance at January 2, 2016
|
$
|
8,543
|
|
|
$
|
400
|
|
|
$
|
8,943
|
|
Additional provisions
|
6,088
|
|
|
—
|
|
|
6,088
|
|
|||
Charges to reserve
|
(5,879
|
)
|
|
(400
|
)
|
|
(6,279
|
)
|
|||
Balance at December 31, 2016
|
$
|
8,752
|
|
|
$
|
—
|
|
|
$
|
8,752
|
|
Additional provisions
|
8,204
|
|
|
—
|
|
|
8,204
|
|
|||
Charges to reserve
|
(3,220
|
)
|
|
—
|
|
|
(3,220
|
)
|
|||
Balance at December 30, 2017
|
$
|
13,736
|
|
|
$
|
—
|
|
|
$
|
13,736
|
|
(dollars in thousands, except per share data)
|
Quarter 1
|
|
Quarter 2
|
|
Quarter 3
|
|
(2) Quarter 4
|
||||||||
Fiscal 2017:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
732,755
|
|
|
$
|
692,117
|
|
|
$
|
948,232
|
|
|
$
|
1,027,306
|
|
Gross profit
|
$
|
315,802
|
|
|
$
|
303,457
|
|
|
$
|
403,848
|
|
|
$
|
460,207
|
|
Selling, general, and administrative expenses
|
$
|
247,794
|
|
|
$
|
250,146
|
|
|
$
|
283,480
|
|
|
$
|
325,507
|
|
Royalty income
|
$
|
(10,558
|
)
|
|
$
|
(11,210
|
)
|
|
$
|
(10,350
|
)
|
|
$
|
(11,063
|
)
|
Operating income
|
$
|
78,566
|
|
|
$
|
64,521
|
|
|
$
|
130,718
|
|
|
$
|
145,763
|
|
Net income
|
$
|
46,664
|
|
|
$
|
37,925
|
|
|
$
|
82,486
|
|
|
$
|
135,689
|
|
Basic net income per common share (1)
|
$
|
0.96
|
|
|
$
|
0.79
|
|
|
$
|
1.73
|
|
|
$
|
2.87
|
|
Diluted net income per common share (1)
|
$
|
0.95
|
|
|
$
|
0.78
|
|
|
$
|
1.71
|
|
|
$
|
2.84
|
|
|
|
|
|
|
|
|
|
||||||||
Fiscal 2016:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
724,085
|
|
|
$
|
639,471
|
|
|
$
|
901,425
|
|
|
$
|
934,203
|
|
Gross profit
|
$
|
310,929
|
|
|
$
|
282,182
|
|
|
$
|
375,546
|
|
|
$
|
410,492
|
|
Selling, general, and administrative expenses
|
$
|
228,996
|
|
|
$
|
228,464
|
|
|
$
|
255,322
|
|
|
$
|
282,624
|
|
Royalty income
|
$
|
(11,075
|
)
|
|
$
|
(9,525
|
)
|
|
$
|
(10,670
|
)
|
|
$
|
(11,545
|
)
|
Operating income
|
$
|
93,008
|
|
|
$
|
63,243
|
|
|
$
|
130,894
|
|
|
$
|
139,413
|
|
Net income
|
$
|
53,980
|
|
|
$
|
36,198
|
|
|
$
|
80,811
|
|
|
$
|
87,117
|
|
Basic net income per common share (1)
|
$
|
1.05
|
|
|
$
|
0.72
|
|
|
$
|
1.62
|
|
|
$
|
1.77
|
|
Diluted net income per common share (1)
|
$
|
1.04
|
|
|
$
|
0.71
|
|
|
$
|
1.60
|
|
|
$
|
1.76
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
1,922,930
|
|
|
$
|
1,955,611
|
|
|
$
|
372,312
|
|
|
$
|
(850,443
|
)
|
|
$
|
3,400,410
|
|
Cost of goods sold
|
|
—
|
|
|
1,406,517
|
|
|
1,143,815
|
|
|
196,389
|
|
|
(829,625
|
)
|
|
1,917,096
|
|
||||||
Gross profit
|
|
—
|
|
|
516,413
|
|
|
811,796
|
|
|
175,923
|
|
|
(20,818
|
)
|
|
1,483,314
|
|
||||||
Selling, general, and administrative expenses
|
|
—
|
|
|
181,129
|
|
|
837,253
|
|
|
126,055
|
|
|
(37,510
|
)
|
|
1,106,927
|
|
||||||
Royalty income
|
|
—
|
|
|
(34,816
|
)
|
|
(19,725
|
)
|
|
—
|
|
|
11,360
|
|
|
(43,181
|
)
|
||||||
Operating income (loss)
|
|
—
|
|
|
370,100
|
|
|
(5,732
|
)
|
|
49,868
|
|
|
5,332
|
|
|
419,568
|
|
||||||
Interest expense
|
|
—
|
|
|
29,758
|
|
|
5,498
|
|
|
96
|
|
|
(5,308
|
)
|
|
30,044
|
|
||||||
Interest income
|
|
—
|
|
|
(5,497
|
)
|
|
—
|
|
|
(156
|
)
|
|
5,308
|
|
|
(345
|
)
|
||||||
(Income) loss in subsidiaries
|
|
(302,764
|
)
|
|
(25,343
|
)
|
|
(38,948
|
)
|
|
—
|
|
|
367,055
|
|
|
—
|
|
||||||
Other income, net
|
|
—
|
|
|
(1,153
|
)
|
|
1,281
|
|
|
(1,291
|
)
|
|
—
|
|
|
(1,163
|
)
|
||||||
Income (loss) before income taxes
|
|
302,764
|
|
|
372,335
|
|
|
26,437
|
|
|
51,219
|
|
|
(361,723
|
)
|
|
391,032
|
|
||||||
Provision for income taxes
|
|
—
|
|
|
74,903
|
|
|
1,096
|
|
|
12,269
|
|
|
—
|
|
|
88,268
|
|
||||||
Net income (loss)
|
|
$
|
302,764
|
|
|
$
|
297,432
|
|
|
$
|
25,341
|
|
|
$
|
38,950
|
|
|
$
|
(361,723
|
)
|
|
$
|
302,764
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
1,881,919
|
|
|
$
|
1,762,882
|
|
|
$
|
300,533
|
|
|
$
|
(746,150
|
)
|
|
$
|
3,199,184
|
|
Cost of goods sold
|
|
—
|
|
|
1,358,209
|
|
|
1,033,403
|
|
|
155,571
|
|
|
(727,148
|
)
|
|
1,820,035
|
|
||||||
Gross profit
|
|
—
|
|
|
523,710
|
|
|
729,479
|
|
|
144,962
|
|
|
(19,002
|
)
|
|
1,379,149
|
|
||||||
Selling, general, and administrative expenses
|
|
—
|
|
|
177,605
|
|
|
753,874
|
|
|
101,494
|
|
|
(37,567
|
)
|
|
995,406
|
|
||||||
Royalty income
|
|
—
|
|
|
(32,728
|
)
|
|
(19,660
|
)
|
|
—
|
|
|
9,573
|
|
|
(42,815
|
)
|
||||||
Operating income (loss)
|
|
—
|
|
|
378,833
|
|
|
(4,735
|
)
|
|
43,468
|
|
|
8,992
|
|
|
426,558
|
|
||||||
Interest expense
|
|
—
|
|
|
26,475
|
|
|
5,435
|
|
|
442
|
|
|
(5,308
|
)
|
|
27,044
|
|
||||||
Interest income
|
|
—
|
|
|
(5,756
|
)
|
|
—
|
|
|
(115
|
)
|
|
5,308
|
|
|
(563
|
)
|
||||||
(Income) loss in subsidiaries
|
|
(258,106
|
)
|
|
4,413
|
|
|
(29,306
|
)
|
|
—
|
|
|
282,999
|
|
|
—
|
|
||||||
Other (income) expense, net
|
|
—
|
|
|
(383
|
)
|
|
482
|
|
|
3,908
|
|
|
—
|
|
|
4,007
|
|
||||||
Income (loss) before income taxes
|
|
258,106
|
|
|
354,084
|
|
|
18,654
|
|
|
39,233
|
|
|
(274,007
|
)
|
|
396,070
|
|
||||||
Provision for income taxes
|
|
—
|
|
|
104,970
|
|
|
23,067
|
|
|
9,927
|
|
|
—
|
|
|
137,964
|
|
||||||
Net income (loss)
|
|
$
|
258,106
|
|
|
$
|
249,114
|
|
|
$
|
(4,413
|
)
|
|
$
|
29,306
|
|
|
$
|
(274,007
|
)
|
|
$
|
258,106
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
1,813,950
|
|
|
$
|
1,639,826
|
|
|
$
|
246,158
|
|
|
$
|
(686,055
|
)
|
|
$
|
3,013,879
|
|
Cost of goods sold
|
|
—
|
|
|
1,286,411
|
|
|
989,284
|
|
|
136,317
|
|
|
(656,157
|
)
|
|
1,755,855
|
|
||||||
Gross profit
|
|
—
|
|
|
527,539
|
|
|
650,542
|
|
|
109,841
|
|
|
(29,898
|
)
|
|
1,258,024
|
|
||||||
Selling, general, and administrative expenses
|
|
—
|
|
|
181,150
|
|
|
679,532
|
|
|
88,257
|
|
|
(39,706
|
)
|
|
909,233
|
|
||||||
Royalty income
|
|
—
|
|
|
(32,978
|
)
|
|
(19,414
|
)
|
|
—
|
|
|
8,326
|
|
|
(44,066
|
)
|
||||||
Operating income (loss)
|
|
—
|
|
|
379,367
|
|
|
(9,576
|
)
|
|
21,584
|
|
|
1,482
|
|
|
392,857
|
|
||||||
Interest expense
|
|
—
|
|
|
26,550
|
|
|
5,331
|
|
|
557
|
|
|
(5,407
|
)
|
|
27,031
|
|
||||||
Interest income
|
|
—
|
|
|
(5,826
|
)
|
|
—
|
|
|
(81
|
)
|
|
5,407
|
|
|
(500
|
)
|
||||||
(Income) loss in subsidiaries
|
|
(237,822
|
)
|
|
19,775
|
|
|
(9,742
|
)
|
|
—
|
|
|
227,789
|
|
|
—
|
|
||||||
Other (income) expense, net
|
|
—
|
|
|
(6
|
)
|
|
(60
|
)
|
|
(1,796
|
)
|
|
—
|
|
|
(1,862
|
)
|
||||||
Income (loss) before income taxes
|
|
237,822
|
|
|
338,874
|
|
|
(5,105
|
)
|
|
22,904
|
|
|
(226,307
|
)
|
|
368,188
|
|
||||||
Provision for income taxes
|
|
—
|
|
|
102,534
|
|
|
20,590
|
|
|
7,242
|
|
|
—
|
|
|
130,366
|
|
||||||
Net income (loss)
|
|
$
|
237,822
|
|
|
$
|
236,340
|
|
|
$
|
(25,695
|
)
|
|
$
|
15,662
|
|
|
$
|
(226,307
|
)
|
|
$
|
237,822
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income
|
|
$
|
302,764
|
|
|
$
|
297,432
|
|
|
$
|
25,341
|
|
|
$
|
38,950
|
|
|
$
|
(361,723
|
)
|
|
$
|
302,764
|
|
Post-retirement benefit plans
|
|
(692
|
)
|
|
(692
|
)
|
|
(430
|
)
|
|
—
|
|
|
1,122
|
|
|
(692
|
)
|
||||||
Foreign currency translation adjustments
|
|
6,339
|
|
|
6,339
|
|
|
6,339
|
|
|
6,339
|
|
|
(19,017
|
)
|
|
6,339
|
|
||||||
Comprehensive income
|
|
$
|
308,411
|
|
|
$
|
303,079
|
|
|
$
|
31,250
|
|
|
$
|
45,289
|
|
|
$
|
(379,618
|
)
|
|
$
|
308,411
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income (loss)
|
|
$
|
258,106
|
|
|
$
|
249,114
|
|
|
$
|
(4,413
|
)
|
|
$
|
29,306
|
|
|
$
|
(274,007
|
)
|
|
$
|
258,106
|
|
Post-retirement benefit plans
|
|
(335
|
)
|
|
(335
|
)
|
|
(666
|
)
|
|
—
|
|
|
1,001
|
|
|
(335
|
)
|
||||||
Foreign currency translation adjustments
|
|
1,962
|
|
|
1,962
|
|
|
1,962
|
|
|
1,962
|
|
|
(5,886
|
)
|
|
1,962
|
|
||||||
Comprehensive income (loss)
|
|
$
|
259,733
|
|
|
$
|
250,741
|
|
|
$
|
(3,117
|
)
|
|
$
|
31,268
|
|
|
$
|
(278,892
|
)
|
|
$
|
259,733
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Net income (loss)
|
|
$
|
237,822
|
|
|
$
|
236,340
|
|
|
$
|
(25,695
|
)
|
|
$
|
15,662
|
|
|
$
|
(226,307
|
)
|
|
$
|
237,822
|
|
Post-retirement benefit plans
|
|
859
|
|
|
859
|
|
|
803
|
|
|
—
|
|
|
(1,662
|
)
|
|
859
|
|
||||||
Foreign currency translation adjustments
|
|
(14,189
|
)
|
|
(14,189
|
)
|
|
(29,574
|
)
|
|
(14,189
|
)
|
|
57,952
|
|
|
(14,189
|
)
|
||||||
Comprehensive income (loss)
|
|
$
|
224,492
|
|
|
$
|
223,010
|
|
|
$
|
(54,466
|
)
|
|
$
|
1,473
|
|
|
$
|
(170,017
|
)
|
|
$
|
224,492
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Cash flows provided by operating activities:
|
|
$
|
—
|
|
|
$
|
166,999
|
|
|
$
|
118,813
|
|
|
$
|
43,809
|
|
|
$
|
—
|
|
|
$
|
329,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
—
|
|
|
(21,690
|
)
|
|
(38,899
|
)
|
|
(8,884
|
)
|
|
—
|
|
|
(69,473
|
)
|
||||||
Acquisitions of businesses, net of cash acquired
|
|
—
|
|
|
(143,270
|
)
|
|
746
|
|
|
(15,933
|
)
|
|
|
|
(158,457
|
)
|
|||||||
Intercompany investing activity
|
|
256,991
|
|
|
(25,607
|
)
|
|
894
|
|
|
27,397
|
|
|
(259,675
|
)
|
|
—
|
|
||||||
Disposals of property, plant and equipment
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||
Net cash provided by (used in) investing activities
|
|
$
|
256,991
|
|
|
$
|
(190,567
|
)
|
|
$
|
(37,244
|
)
|
|
$
|
2,580
|
|
|
$
|
(259,675
|
)
|
|
$
|
(227,915
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany financing activity
|
|
—
|
|
|
(128,906
|
)
|
|
(83,356
|
)
|
|
(47,413
|
)
|
|
259,675
|
|
|
—
|
|
||||||
Borrowings under secured revolving credit facility
|
|
—
|
|
|
200,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200,000
|
|
||||||
Payments on secured revolving credit facility
|
|
—
|
|
|
(145,000
|
)
|
|
—
|
|
|
(18,965
|
)
|
|
—
|
|
|
(163,965
|
)
|
||||||
Payment of debt issuance costs
|
|
—
|
|
|
(2,119
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,119
|
)
|
||||||
Dividends paid
|
|
(70,914
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,914
|
)
|
||||||
Repurchases of common stock
|
|
(188,762
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(188,762
|
)
|
||||||
Withholdings from vesting of restricted stock
|
|
(5,753
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,753
|
)
|
||||||
Proceeds from exercises of stock options
|
|
8,438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,438
|
|
||||||
Net cash (used in) provided by financing activities
|
|
(256,991
|
)
|
|
(76,025
|
)
|
|
(83,356
|
)
|
|
(66,378
|
)
|
|
259,675
|
|
|
(223,075
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
505
|
|
|
—
|
|
|
505
|
|
||||||
Decrease in cash and cash equivalents
|
|
—
|
|
|
(99,593
|
)
|
|
(1,787
|
)
|
|
(19,484
|
)
|
|
—
|
|
|
(120,864
|
)
|
||||||
Cash and cash equivalents, beginning of fiscal year
|
|
—
|
|
|
229,056
|
|
|
11,817
|
|
|
58,485
|
|
|
—
|
|
|
299,358
|
|
||||||
Cash and cash equivalents, end of fiscal year
|
|
$
|
—
|
|
|
$
|
129,463
|
|
|
$
|
10,030
|
|
|
$
|
39,001
|
|
|
$
|
—
|
|
|
$
|
178,494
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Cash flows provided by operating activities:
|
|
$
|
—
|
|
|
$
|
206,843
|
|
|
$
|
127,018
|
|
|
$
|
35,368
|
|
|
$
|
—
|
|
|
$
|
369,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
—
|
|
|
(22,934
|
)
|
|
(55,072
|
)
|
|
(10,550
|
)
|
|
—
|
|
|
(88,556
|
)
|
||||||
Intercompany investing activity
|
|
368,307
|
|
|
480
|
|
|
(2,118
|
)
|
|
131
|
|
|
(366,800
|
)
|
|
—
|
|
||||||
Disposals of property, plant and equipment
|
|
—
|
|
|
23
|
|
|
—
|
|
|
193
|
|
|
—
|
|
|
216
|
|
||||||
Net cash provided by (used in) investing activities
|
|
$
|
368,307
|
|
|
$
|
(22,431
|
)
|
|
$
|
(57,190
|
)
|
|
$
|
(10,226
|
)
|
|
$
|
(366,800
|
)
|
|
$
|
(88,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany financing activity
|
|
—
|
|
|
(283,909
|
)
|
|
(74,681
|
)
|
|
(8,210
|
)
|
|
366,800
|
|
|
—
|
|
||||||
Dividends paid
|
|
(66,355
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,355
|
)
|
||||||
Repurchases of common stock
|
|
(300,445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300,445
|
)
|
||||||
Income tax benefit from stock-based compensation
|
|
—
|
|
|
2,782
|
|
|
2,018
|
|
|
—
|
|
|
—
|
|
|
4,800
|
|
||||||
Withholdings from vesting of restricted stock
|
|
(8,673
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,673
|
)
|
||||||
Proceeds from exercises of stock options
|
|
7,166
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,166
|
|
||||||
Net cash (used in) provided by financing activities
|
|
(368,307
|
)
|
|
(281,127
|
)
|
|
(72,663
|
)
|
|
(8,210
|
)
|
|
366,800
|
|
|
(363,507
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
767
|
|
|
—
|
|
|
767
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
|
—
|
|
|
(96,715
|
)
|
|
(2,835
|
)
|
|
17,699
|
|
|
—
|
|
|
(81,851
|
)
|
||||||
Cash and cash equivalents, beginning of fiscal year
|
|
—
|
|
|
325,771
|
|
|
14,652
|
|
|
40,786
|
|
|
—
|
|
|
381,209
|
|
||||||
Cash and cash equivalents, end of fiscal year
|
|
$
|
—
|
|
|
$
|
229,056
|
|
|
$
|
11,817
|
|
|
$
|
58,485
|
|
|
$
|
—
|
|
|
$
|
299,358
|
|
|
|
Parent
|
|
Subsidiary Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||||
Cash flows provided by operating activities:
|
|
$
|
—
|
|
|
$
|
148,656
|
|
|
$
|
115,589
|
|
|
$
|
43,742
|
|
|
$
|
—
|
|
|
$
|
307,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
—
|
|
|
(27,813
|
)
|
|
(64,707
|
)
|
|
(10,977
|
)
|
|
—
|
|
|
(103,497
|
)
|
||||||
Intercompany investing activity
|
|
161,993
|
|
|
5,642
|
|
|
(2,735
|
)
|
|
(8,582
|
)
|
|
(156,318
|
)
|
|
—
|
|
||||||
Proceeds from repayment of intercompany loan
|
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
(35,000
|
)
|
|
—
|
|
||||||
Issuance of intercompany loan
|
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
||||||
Disposals of property, plant and equipment
|
|
—
|
|
|
65
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
72
|
|
||||||
Net cash provided by (used in) investing activities
|
|
$
|
161,993
|
|
|
$
|
(2,106
|
)
|
|
$
|
(67,442
|
)
|
|
$
|
(19,552
|
)
|
|
$
|
(176,318
|
)
|
|
(103,425
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intercompany financing activity
|
|
—
|
|
|
(108,761
|
)
|
|
(46,672
|
)
|
|
(885
|
)
|
|
156,318
|
|
|
—
|
|
||||||
Proceeds from intercompany loan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
|
(15,000
|
)
|
|
—
|
|
||||||
Repayment of intercompany loan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,000
|
)
|
|
35,000
|
|
|
—
|
|
||||||
Borrowings under secured revolving credit facility
|
|
—
|
|
|
166,000
|
|
|
—
|
|
|
39,586
|
|
|
|
|
|
205,586
|
|
||||||
Payments on secured revolving credit facility
|
|
—
|
|
|
(186,000
|
)
|
|
—
|
|
|
(19,237
|
)
|
|
—
|
|
|
(205,237
|
)
|
||||||
Payment of debt issuance costs
|
|
—
|
|
|
(1,628
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,628
|
)
|
||||||
Payment of contingent consideration
|
|
—
|
|
|
(7,572
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,572
|
)
|
||||||
Dividends paid
|
|
(46,028
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,028
|
)
|
||||||
Repurchases of common stock
|
|
(110,290
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110,290
|
)
|
||||||
Income tax benefit from stock-based compensation
|
|
—
|
|
|
6,104
|
|
|
2,735
|
|
|
—
|
|
|
—
|
|
|
8,839
|
|
||||||
Withholdings from vesting of restricted stock
|
|
(12,651
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,651
|
)
|
||||||
Proceeds from exercises of stock options
|
|
6,976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,976
|
|
||||||
Net cash (used in) provided by financing activities
|
|
(161,993
|
)
|
|
(131,857
|
)
|
|
(43,937
|
)
|
|
(536
|
)
|
|
176,318
|
|
|
(162,005
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,986
|
)
|
|
—
|
|
|
(1,986
|
)
|
||||||
Net increase in cash and cash equivalents
|
|
—
|
|
|
14,693
|
|
|
4,210
|
|
|
21,668
|
|
|
—
|
|
|
40,571
|
|
||||||
Cash and cash equivalents, beginning of fiscal year
|
|
—
|
|
|
311,078
|
|
|
10,442
|
|
|
19,118
|
|
|
—
|
|
|
340,638
|
|
||||||
Cash and cash equivalents, end of fiscal year
|
|
$
|
—
|
|
|
$
|
325,771
|
|
|
$
|
14,652
|
|
|
$
|
40,786
|
|
|
$
|
—
|
|
|
$
|
381,209
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants, and rights
|
|
Weighted-average exercise price of outstanding options, warrants, and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)
|
||||
Equity compensation plans approved by security holders (1)
|
1,494,223
|
|
|
$
|
61.76
|
|
|
1,100,157
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
1,494,223
|
|
|
$
|
61.76
|
|
|
1,100,157
|
|
(1)
|
Represents stock options that are outstanding or that are available for future issuance pursuant to the Carter's, Inc. Amended and Restated Equity Incentive Plan.
|
|
|
|
Page
|
(A)
|
1.
|
||
|
|
||
|
|
Consolidated Balance Sheets at December 30, 2017 and December 31, 2016
|
|
|
|
Consolidated Statements of Operations for the fiscal years ended December 30, 2017, December 31, 2016, and January 2, 2016
|
|
|
|
Consolidated Statements of Comprehensive Income for the fiscal years ended December 30, 2017, December 31, 2016, and January 2, 2016
|
|
|
|
Consolidated Statements of Cash Flows for the fiscal years ended December 30, 2017, December 31, 2016, and January 2, 2016
|
|
|
|
Consolidated Statements of Changes in Stockholders' Equity for the fiscal years ended December 30, 2017, December 31, 2016, and January 2, 2016
|
|
|
|
||
|
2.
|
Financial Statement Schedules: None
|
|
|
|
|
|
(B)
|
|
Exhibits:
|
|
Exhibit Number
|
Description of Exhibits
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
10.1
|
|
10.2
|
|
10.3 *
|
|
10.4 *
|
|
10.5 *
|
|
10.6 *
|
|
10.7 *
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
21
|
|
23
|
|
31.1
|
|
31.2
|
|
32
|
|
101
|
Interactive Data File
|
CARTER'S, INC.
|
|
/s/ MICHAEL D. CASEY
|
Michael D. Casey
|
Chief Executive Officer
|
Name
|
Title
|
Date
|
|
|
|
/s/ MICHAEL D. CASEY
|
Chairman and Chief Executive Officer
|
February 27, 2018
|
Michael D. Casey
|
(Principal Executive Officer)
|
|
|
|
|
/s/ RICHARD F. WESTENBERGER
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Executive Vice President and Chief Financial Officer
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February 27, 2018
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Richard F. Westenberger
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(Principal Financial and Accounting Officer)
|
|
|
|
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/s/ AMY WOODS BRINKLEY
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Director
|
February 27, 2018
|
Amy Woods Brinkley
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|
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/s/ GIUSEPPINA BUONFANTINO
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Director
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February 27, 2018
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Giuseppina Buonfantino
|
|
|
|
|
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/s/ VANESSA J. CASTAGNA
|
Director
|
February 27, 2018
|
Vanessa J. Castagna
|
|
|
|
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/s/ A. BRUCE CLEVERLY
|
Director
|
February 27, 2018
|
A. Bruce Cleverly
|
|
|
|
|
|
/s/ JEVIN S. EAGLE
|
Director
|
February 27, 2018
|
Jevin S. Eagle
|
|
|
|
|
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/s/ PAUL FULTON
|
Director
|
February 27, 2018
|
Paul Fulton
|
|
|
|
|
|
/s/ WILLIAM J. MONTGORIS
|
Director
|
February 27, 2018
|
William J. Montgoris
|
|
|
|
|
|
/s/ DAVID PULVER
|
Director
|
February 27, 2018
|
David Pulver
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|
|
|
|
|
/s/ THOMAS E. WHIDDON
|
Director
|
February 27, 2018
|
Thomas E. Whiddon
|
|
|
|
|
|
1 Year Carters Chart |
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