v3.26.3
REVENUE RECOGNITION
 9 Months Ended
Oct. 03, 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 its 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 consumers (“wholesale”). The Company also earns royalties from certain of its licensees that sell products under the Company’s brands.
Revenues disaggregated by segment and channel were as follows:
Fiscal quarter ended October 3, 2026
(dollars in thousands)U.S. RetailU.S. WholesaleInternationalTotal
Direct-to-consumer$362,624 $— $74,641 $437,265 
Wholesale— 273,110 42,081 315,191 
$362,624 $273,110 $116,722 $752,456 
Royalty income, net$1,883 $2,453 $840 $5,176 
Three fiscal quarters ended October 3, 2026
(dollars in thousands)U.S. RetailU.S. WholesaleInternationalTotal
Direct-to-consumer$999,549 $— $201,806 $1,201,355 
Wholesale— 740,069 107,636 847,705 
$999,549 $740,069 $309,442 $2,049,060 
Royalty income, net$4,077 $7,135 $1,946 $13,158 
Fiscal quarter ended September 27, 2025
(dollars in thousands)U.S. RetailU.S. WholesaleInternationalTotal
Direct-to-consumer$362,307 $— $70,209 $432,516 
Wholesale— 283,805 41,515 325,320 
$362,307 $283,805 $111,724 $757,836 
Royalty income, net$2,434 $2,239 $755 $5,428 
Three fiscal quarters ended September 27, 2025
(dollars in thousands)U.S. RetailU.S. WholesaleInternationalTotal
Direct-to-consumer$956,288 $— $184,651 $1,140,939 
Wholesale— 726,899 105,137 832,036 
$956,288 $726,899 $289,788 $1,972,975 
Royalty income, net$4,359 $7,680 $1,969 $14,008 
Accounts Receivable from Customers and Licensees
The components of Accounts receivable, net were as follows:
(dollars in thousands)October 3, 2026January 3, 2026September 27, 2025
Trade receivables from wholesale customers, net$228,370 $174,566 $239,417 
Royalties receivable4,729 4,011 4,960 
Other receivables(1)
10,643 11,705 8,957 
Total gross receivables$243,742 $190,282 $253,334 
Less: Wholesale accounts receivable reserves(2)(3)
(14,884)(11,716)(15,468)
Accounts receivable, net$228,858 $178,566 $237,866 
(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 $3.7 million, $4.1 million, and $3.4 million for the periods ended October 3, 2026, January 3, 2026, and September 27, 2025, respectively.
(3)Includes allowance for credit losses of $11.2 million, $7.6 million, and $12.0 million for the periods ended October 3, 2026, January 3, 2026, and September 27, 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 condensed consolidated balance sheets.
Contract Liabilities
Total contract liabilities were as follows:    
(dollars in thousands)October 3, 2026January 3, 2026September 27, 2025
Contract liabilities - current:
Unredeemed gift cards$25,897 $25,994 $25,318 
Unredeemed customer loyalty rewards2,420 2,372 2,232 
Carter’s credit card upfront bonus— — 179 
Total contract liabilities - current$28,317 $28,366 $27,729 
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 third quarters of fiscal 2026 and fiscal 2025, the Company recognized revenue of $1.3 million and $1.3 million related to the gift card liability balance that existed at July 4, 2026 and June 28, 2025, respectively. Additionally, during the first three quarters of fiscal 2026 and fiscal 2025, the Company recognized revenue of $7.3 million and $6.8 million related to the gift card liability balance that existed at January 3, 2026 and December 28, 2024, respectively.
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.