v3.26.1
REVENUE RECOGNITION
 3 Months Ended
Apr. 04, 2026
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
The Company generates revenue primarily from the sale of products to retail and wholesale customers and from royalties earned under licensing arrangements. Contracts with customers include written agreements as well as arrangements that are implied by customary business practices or law.
Disaggregation of Revenue
The Company sells products directly to consumers (“direct-to-consumer”) through its retail stores, eCommerce websites, and mobile app, and to other retailers and partners that in turn sell the products to their own customers (“wholesale channel”). The Company also earns royalties from certain of its licensees that sell products under the Company’s brands.
Disaggregated revenues from these sources were as follows:
Fiscal quarter ended April 4, 2026
(dollars in thousands)
U.S. Retail
U.S. Wholesale
International
Total
Direct-to-consumer
$
332,248 
$
— 
$
63,877 
$
396,125 
Wholesale channel
— 
251,406 
33,582 
284,988 
$
332,248 
$
251,406 
$
97,459 
$
681,113 
Royalty income, net
$
1,441 
$
2,890 
$
288 
$
4,619 
Fiscal quarter ended March 29, 2025
(dollars in thousands)
U.S. Retail
U.S. Wholesale
International
Total
Direct-to-consumer
$
294,432 
$
— 
$
53,823 
$
348,255 
Wholesale channel
— 
250,096 
31,476 
281,572 
$
294,432 
$
250,096 
$
85,299 
$
629,827 
Royalty income, net
$
1,518 
$
3,322 
$
492 
$
5,332 
Accounts Receivable from Customers and Licensees
Accounts receivable primarily represent amounts due from wholesale customers and licensees and are recorded net of allowances for chargebacks and expected credit losses.
The components of Accounts receivable, net, were as follows:
(dollars in thousands)
April 4, 2026
January 3, 2026
March 29, 2025
Trade receivables from wholesale customers, net
$
192,394 
$
174,566 
$
196,109 
Royalties receivable, net
4,488 
4,011 
4,830 
Other receivables(1)
9,713 
11,705 
11,241 
Total receivables
$
206,595 
$
190,282 
$
212,180 
Less: Wholesale accounts receivable reserves(2)(3)
(9,999)
(11,716)
(8,307)
Accounts receivable, net
$
196,596 
$
178,566 
$
203,873 
(1)Includes receivables related to shipping volume rebates, healthcare-related rebates, amounts due from third-party gift card program partners, recoveries related to provisional anti-dumping duties in Mexico, and tax recoveries.
(2)Includes allowance for chargebacks of $4.0 million, $4.1 million, and $3.1 million for the periods ended April 4, 2026, January 3, 2026, and March 29, 2025, respectively.
(3)Includes allowance for credit losses of $6.0 million, $7.6 million, and $5.2 million for the periods ended April 4, 2026, January 3, 2026, and March 29, 2025, respectively.
Contract Assets and Liabilities
The Company’s contract assets are not material to the Company’s condensed consolidated financial statements.
The Company recognizes a contract liability when it has received consideration before transferring the related goods to the customer. The Company’s contract liabilities primarily consist of (1) obligations related to unredeemed gift cards, (2) unredeemed customer loyalty rewards, and (3) the unamortized upfront bonus received from a third-party financial institution under the Company’s private label credit card program. Contract liabilities are classified as current and are included in Other current liabilities on the Company’s consolidated balance sheets.
Contract Liabilities
Total contract liabilities were as follows:
(dollars in thousands)
April 4, 2026
January 3, 2026
March 29, 2025
Contract liabilities - current:
Unredeemed gift cards
$
25,337 
$
25,994 
$
24,275 
Unredeemed customer loyalty rewards
2,609 
2,372 
2,098 
Carter’s credit card - upfront bonus
— 
— 
536 
Total contract liabilities - current
$
27,946 
$
28,366 
$
26,909 
Composition of Contract Liabilities
Unredeemed gift cards - represent obligations to transfer goods in the future to customers that have purchased gift cards. Gift card contract liabilities change due to the issuance and redemption of gift cards and the recognition of breakage on balances that are not expected to be redeemed. Although gift cards do not expire, all outstanding gift card balances are classified as current liabilities, as they are redeemable on demand by the cardholder. The majority of gift cards are redeemed within one year of issuance. During the first quarters of fiscal 2026 and fiscal 2025, the Company recognized revenue of $4.1 million and $3.6 million related to the gift card liability balance that existed at the beginning of each respective period.
Unredeemed loyalty rewards - represent obligations under the Company’s loyalty program to transfer goods in the future to customers when the reward certificates are redeemed. Changes in the loyalty program contract liability result from new rewards earned, and reward certificate redemptions and expirations. The earning and redemption cycles are under one year in duration.
Carter’s credit card - upfront bonus - represents the unamortized portion of the upfront signing bonus received from a third-party financial institution under the Company’s private label credit card program. This bonus was recognized as revenue over the term of the agreement.