Carter's Inc (CRI) 2022 Q1 法說會逐字稿

Welcome to Carter's First Quarter Fiscal 2022 Earnings Conference Call. On the call today are Michael Casey, Chairman and Chief Executive Officer; Richard Westenberger, Executive Vice President and Chief Financial Officer; Brian Lynch, President; and Sean McHugh, Vice President and Treasurer.

歡迎參加卡特 2022 財年第一季財報電話會議。今天參加電話會議的是董事長兼執行長 Michael Casey；理查德·韋斯特伯格（Richard Westenberger），執行副總裁兼財務長；布萊恩·林奇，總裁；副總裁兼財務主管 Sean McHugh。

After today's prepared remarks, we will take questions as time allows. Carter issued its first quarter fiscal 2022 earnings press release earlier this morning. A copy of the release and presentation material for today's call have been posted on the Investor Relations section of the company's website at ir.carters.com.

在今天準備好的發言之後，我們將在時間允許的情況下回答問題。今天早些時候，卡特發布了 2022 財年第一季財報新聞稿。今天電話會議的新聞稿和簡報資料的副本已發佈在該公司網站 ir.carters.com 的投資者關係部分。

Before we begin, let me remind you that statements made on this conference call and in the company's presentation materials about the company's outlook, plans and future performance are forward-looking statements. Actual results may differ materially from those projected. For a discussion of factors that could cause actual results to vary from those contained in the forward-looking, please refer to the company's most recent annual and quarterly reports filed with the Securities and Exchange Commission and the presentation materials posted on the company's website.

在開始之前，請允許我提醒您，本次電話會議以及公司簡報資料中有關公司前景、計劃和未來業績的陳述均為前瞻性陳述。實際結果可能與預測結果有重大差異。有關可能導致實際結果與前瞻性陳述中包含的結果不同的因素的討論，請參閱該公司向美國證券交易委員會提交的最新年度和季度報告以及該公司網站上發布的演示材料。

On this call, the company will reference various non-GAAP financial measurements. A reconciliation of these non-GAAP financial measurements to the company's GAAP financial measurements is provided in the company's earnings release and presentation materials. Also, today's call is being recorded.

在這次電話會議上，該公司將參考各種非公認會計準則財務衡量標準。本公司的收益發布和簡報資料中提供了這些非公認會計原則財務衡量標準與公司公認會計原則財務衡量標準的調節表。此外，今天的通話正在錄音。

And now I would like to turn the call over to Mr. Casey.

現在我想把電話轉給凱西先生。

Thanks very much. Good morning, everyone. Thank you for joining us on the call. Before we walk you through the presentation on our website, I'd like to share some thoughts on our business with you. First quarter sales and earnings exceeded the plans we shared with you in February. Our supply chain performance continued to improve, inventory arrived earlier from Asia and enabled us to support higher demand from our largest wholesale customers. We also had stronger than planned growth in our international sales, driven by our operations in Canada and Mexico, and saw a higher demand than expected from our multinational wholesale customers. We had planned retail sales lower in the first quarter to reflect the impact of closing low-margin stores last year, the shift in the timing of the Easter holiday and the significant impact of the nearly $3 trillion in government stimulus that drove higher consumer spending in the first quarter last year. Recall that in late December 2020, President Trump approved a nearly $1 trillion stimulus package. Just 10 weeks later, President Biden approved a nearly $2 trillion stimulus package. A good portion of the stimulus was focused on helping families with young children. Following each of those stimulus payments, we saw a meaningful lift in our retail sales in the first quarter last year, including an over 30% increase in eCommerce sales.

非常感謝。大家早安。感謝您加入我們的通話。在向您介紹我們網站上的簡報之前，我想與您分享一些關於我們業務的想法。第一季的銷售額和收益超出了我們二月與您分享的計劃。我們的供應鏈績效持續改善，庫存從亞洲提前到達，使我們能夠滿足最大批次客戶的更高需求。在加拿大和墨西哥業務的推動下，我們的國際銷售成長也強於計劃，跨國批發客戶的需求高於預期。我們原計劃降低第一季的零售額，以反映去年關閉低利潤商店的影響、復活節假期時間的變化以及近3 兆美元的政府刺激措施的重大影響，這些刺激措施推動了消費者支出的增加去年第一季。回想一下，2020 年 12 月下旬，川普總統批准了近 1 兆美元的刺激方案。僅僅10週後，拜登總統就批准了近2兆美元的經濟刺激計畫。刺激計劃的很大一部分集中在幫助有小孩的家庭。在每次刺激付款之後，我們看到去年第一季的零售額大幅成長，其中電子商務銷售額增加了 30% 以上。

A year ago, many of us were still working from home. We believe the combination of the significant stimulus benefits and ease of shopping from home drove record online sales force in the first quarter last year. Thankfully, store sales in the first quarter were better than expected. We saw that positive trend begin last year with greater access to the vaccine and confidence in its protection, people are returning to shop in stores. We saw good growth in store sales in April, up over 8% as consumers got out to shop for spring outfits. Year-to-date, eCommerce sales are lower than we expected. Our year-over-year comparisons are expected to be less challenging in the months ahead. The final round of stimulus payments in the form of prepaid child tax credits began in the second half of last year. Those payments were smaller in amount and less impactful to our sales. Suffice it to say, the last 2 years have been unlike any other time in our lives and year-over-year comparisons are distorted by global events. A more meaningful comparison of our performance this year may be to the pre-pandemic period in 2019.

一年前，我們中的許多人仍然在家工作。我們認為，顯著的刺激效益和在家購物的便利性相結合，推動了去年第一季創紀錄的線上銷售團隊。值得慶幸的是，第一季的門市銷售優於預期。我們看到去年開始出現積極的趨勢，人們越來越多地獲得疫苗並對其保護充滿信心，人們正在回到商店購物。隨著消費者外出購買春季服裝，我們看到 4 月份商店銷售額出現了良好增長，增長了 8% 以上。今年迄今為止，電子商務銷售額低於我們的預期。預計未來幾個月我們的年比比較將不再那麼具有挑戰性。最後一輪以預付兒童稅收抵免形式的刺激付款於去年下半年開始。這些付款金額較小，對我們的銷售影響較小。可以這麼說，過去兩年與我們生活中的任何其他時期都不一樣，全球事件扭曲了逐年比較。對我們今年的表現進行更有意義的比較可能是與 2019 年大流行前時期的比較。

Through that lens, our first quarter sales grew 5% despite the closure of 115 low-margin stores that generated over $30 million in sales in the first quarter of 2019. Our operating income in the first quarter this year was 70% higher than the same period in 2019. Our significant improvement in profitability compared to 2019 reflects structural changes to our business made during the pandemic by focusing on fewer, better and higher-margin product choices, closing lower-margin stores, running leaner on inventories, focusing our marketing on brand building versus promotions and improving price realization. We believe the record operating margin achieved last year is sustainable. Given our current outlook for the year, we are reaffirming the annual sales and earnings guidance we shared with you in February. For the year, we're forecasting growth in sales in each of our retail, wholesale and international segments. The largest growth is expected to come from our Wholesale business. We're projecting growth with 5 of our top 6 wholesale customers this year. We continue to see good demand for our exclusive brands sold through the world's largest retailers, Walmart, Target and Amazon. These retailers disproportionately benefited from the pandemic. They provide one-stop shopping for the essential core products that families with young children replenish on a frequent basis, including diapers, formula and groceries. Carter's benefits from those frequent visits. We're also forecasting good growth with our flagship Carter's brand wholesale customers. Our more department store like customers were most affected by pandemic-related store closures in 2020 and consumer shifting to the essential retailers that remained open. Though our sales to these customers are not yet back to the 2019 level of sales, our flagship Carter's brand wholesale sales are projected up low single digit this year and at a margin rate higher than we realized in 2019.

從這個角度來看，儘管關閉了115 家低利潤商店，但2019 年第一季的銷售額超過3,000 萬美元，但我們第一季的銷售額仍成長了5%。比去年同期高出70% 2019 年期間。率較高的產品選擇，關閉利潤率較低的商店，減少庫存，將行銷重點放在品牌建立與促銷和提高價格實現上。我們相信去年創下的營業利潤率紀錄是可持續的。鑑於我們目前對今年的展望，我們重申我們在二月與您分享的年度銷售和盈利指引。今年，我們預計零售、批發和國際各部門的銷售額都會成長。預計最大的成長將來自我們的批發業務。我們預計今年 6 名批發客戶中的 5 家將實現成長。我們繼續看到，透過全球最大的零售商沃爾瑪、塔吉特和亞馬遜銷售的我們的獨家品牌需求旺盛。這些零售商從這場流行病中受益匪淺。他們為有幼兒的家庭經常補充的必需核心產品提供一站式購物，包括尿布、配方奶粉和雜貨。卡特從這些頻繁的拜訪中受益匪淺。我們也預測我們的旗艦卡特品牌批發客戶將出現良好成長。 2020 年，與大流行相關的商店關閉以及消費者轉向仍在營業的重要零售商，對我們的百貨公司消費者的影響最大。儘管我們對這些客戶的銷售額尚未恢復到 2019 年的銷售水平，但我們的旗艦產品 Carter's 品牌批發銷售額今年預計將增長低個位數，且利潤率高於我們在 2019 年實現的水平。

Our growth in wholesale sales this year will reflect the rollout of our eco-friendly Little Planet brand to more stores and online at Target, Kohl's, Buy Buy Baby and Amazon. We've gained more floor space for our toddler swimwear, sleepwear and holiday product offerings for our flagship Carter's brand and exclusive brands. Skip Hop is launching a durables product offering under our Simple Joys brand with Amazon this year, focused on diaper bags, bath-time and playtime activities. And together with Target and Walmart, we are relaunching our brand marketing for our Just One You and Child of Mine brands to more prominently present in-store and online our Carter's brand, which is the best-selling brand in young children's apparel. That brand relaunch will be executed in time for the back-to-school shopping season. Carter's is the largest supplier of young children's apparel to the largest retailers in North America. These retailers view our brands as traffic drivers. We focus on essential core products like bodysuits, wash clothes, towels, bibs, blankets and pajamas. These consumer staples are purchased in multiple quantities in those early years of life. We sold over 25 bodysuits for every child born in the United States last year. Our average price points to the consumer are planned to be less than $11 per unit this year, up less than $0.80 per unit. It's a very affordable purchase and a great value given the beauty, quality and end use of our product offerings.

我們今年批發銷售的成長將反映我們的環保 Little Planet 品牌在 Target、Kohl's、Buy Buy Baby 和 Amazon 的更多商店和網路上的推出。我們為我們的旗艦卡特品牌和獨家品牌的幼兒泳裝、睡衣和假日產品系列贏得了更多的佔地面積。 Skip Hop 今年將與亞馬遜合作推出 Simple Joys 品牌的耐用品產品，重點介紹尿布袋、沐浴時間和遊戲活動。我們與塔吉特和沃爾瑪一起，重新啟動了 Just One You 和 Child of Mine 品牌的品牌行銷，以便在店內和網上更顯著地展示我們的 Carter's 品牌，該品牌是幼兒服裝領域最暢銷的品牌。該品牌的重新推出將在返校購物季及時進行。 Carter's 是北美最大零售商的最大幼兒服裝供應商。這些零售商將我們的品牌視為流量驅動因素。我們專注於基本的核心產品，如連身衣、洗衣服、毛巾、圍兜、毛毯和睡衣。這些消費必需品在生命早期會被多次購買。去年，我們為每個在美國出生的孩子售出了超過 25 件連身衣。今年我們向消費者提供的平均價格計劃為每件不到 11 美元，上漲幅度不到每件 0.80 美元。考慮到我們產品的美觀、品質和最終用途，這是一次非常實惠的購買，而且物超所值。

Our International segment is expected to be the second largest contributor to our growth this year. We're planning mid-single-digit growth in our international sales, driven by our operations in Canada and Mexico. We are the largest branded marketer of young children's apparel in these countries. These are multichannel operations with wholesale, retail store and digital businesses. Canada is the largest and most profitable component of our international business. We have more than twice the share of our nearest competitor. Canada is rolling out our new Little Planet brand to more stores given stronger than planned demand since the launch last year. During the pandemic, we invested in omni-channel capabilities in Canada, including same-day pickup of online purchases at our stores and ship from store capabilities. In the first quarter, over 26% of the online orders in Canada were fulfilled by our stores. These are margin-accretive transactions relative to shipping from our warehouse in Canada. With stronger digital capabilities, eCommerce penetration has grown to over 30% of our total retail sales in Canada, double the pre-pandemic penetration in 2019. We're planning double-digit sales growth in Mexico this year. We plan to replicate the success we achieved in the United States and Canada with our co-branded store model. We are converting our smaller standalone Carter's and OshKosh stores in Mexico to the larger, more productive store model. Over time, we see an opportunity to more than triple our store square footage in Mexico through store growth and our co-branded store model strategy. There are over 2 million children born each year in Mexico compared to less than 400,000 children born each year in Canada. As the leader in young children's apparel, we see both markets as good sources of growth in the years ahead. Our international wholesale sales are planned comparable year-over-year and more profitable than each of the previous 3 years. With good international wholesale partners, including Walmart, Costco, Amazon and other retailers representing our brands in over 90 countries, we believe these profitable relationships should contribute meaningfully to our growth objectives.

我們的國際業務預計將成為今年成長的第二大貢獻者。在加拿大和墨西哥業務的推動下，我們計劃國際銷售額實現中個位數成長。我們是這些國家最大的幼兒服裝品牌行銷者。這些是批發、零售店和數位業務的多通路業務。加拿大是我們國際業務中規模最大、利潤最高的部分。我們的市佔率是最接近的競爭對手的兩倍多。由於自去年推出以來需求強勁，加拿大正在向更多商店推出我們的新「小星球」品牌。在疫情期間，我們投資了加拿大的全通路能力，包括在我們的商店當天提貨和從商店發貨的能力。第一季度，加拿大超過 26% 的線上訂單是由我們的商店完成的。相對於從我們加拿大倉庫出貨而言，這些是保證金增值的交易。憑藉更強大的數位能力，電子商務滲透率已增長至加拿大零售總額的 30% 以上，是 2019 年疫情前滲透率的兩倍。我們計劃透過聯名店模式複製我們在美國和加拿大的成功。我們正在將墨西哥規模較小的 Carter's 和 OshKosh 獨立商店轉變為規模更大、生產力更高的商店模式。隨著時間的推移，我們看到了透過商店成長和我們的聯合品牌商店模式策略將我們在墨西哥的商店面積增加兩倍以上的機會。墨西哥每年出生的兒童超過 200 萬，而加拿大每年出生的兒童不到 40 萬。作為幼兒服裝領域的領導者，我們認為這兩個市場都是未來幾年良好的成長來源。我們的國際批發銷售計劃與去年同期相當，並且比前三年每年都有更多利潤。我們擁有良好的國際批發合作夥伴，包括沃爾瑪、好市多、亞馬遜以及在90 多個國家代表我們品牌的其他零售商，我們相信這些有利可圖的關係應該對我們的成長目標做出有意義的貢獻。

We're projecting low single-digit growth in sales and earnings in our retail segment this year. Our focus will continue to be on reducing the mix of lower-margin stores, opening stores and higher traffic centers that provide good returns on investment, staying lean on inventories and investing in omni-channel capabilities that drive traffic and margins. We are the largest specialty retailer in the United States focused on young children's apparel with beautiful co-branded stores from Maine to Hawaii. Our best performing stores so far this year are in the south and west, where weather was more spring like and tourism seems to be returning to the United States. Our toughest comps were in the Midwest and Northeast, where weather has not yet prompted consumers to shop for warmer weather apparel. Year-to-date, our best comps are in Florida and California, our lowest comps in New York and New Jersey. We saw the best traffic to our indoor mall stores, lowest traffic to our outlet stores. In years past, as gas prices rose, we temporarily see declines in traffic to our outlet stores. About 30% of our stores are in outlet centers. Given our progress with SKU rationalization, inventory management and price realization over the past 2 years, our store unit economics have improved and more attractive store opportunities are now available to us. Over the next 5 years, we plan to open more than 100 stores in the United States net of closures. This year, we plan to open 30 stores and close 20. We expect the impact to sales this year from store closures will be about $30 million compared to last year.

我們預計今年零售部門的銷售額和收益將出現低個位數成長。我們的重點將繼續是減少利潤率較低的商店的組合，開設能夠提供良好投資回報的商店和較高客流量的中心，保持庫存精益，並投資於可提高客流量和利潤的全通路能力。我們是美國最大的專業零售商，專注於幼兒服裝，在緬因州和夏威夷擁有漂亮的聯名店。今年迄今為止，我們業績最好的商店位於南部和西部，那裡的天氣更像春天，旅遊業似乎正在重返美國。我們最艱難的比較是在中西部和東北部，那裡的天氣尚未促使消費者購買溫暖的天氣服裝。今年迄今為止，我們最好的比較是在佛羅裡達州和加利福尼亞州，最低的比較是在紐約和新澤西州。我們發現室內購物中心的客流量最大，直營店的客流量最低。過去幾年，隨著汽油價格上漲，我們的直銷店客流量暫時下降。我們大約 30% 的商店位於直銷中心。鑑於過去兩年我們在 SKU 合理化、庫存管理和價格實現方面取得的進展，我們的商店單位經濟效益有所改善，現在我們可以獲得更有吸引力的商店機會。未來 5 年，我們計劃在美國開設 100 多家門市（扣除關閉門市）。今年，我們計劃新開 30 家門市，關閉 20 家。

Our focus is on high-traffic open air centers that provide convenience for online shoppers, including curbside pickup, which became popular during the pandemic. Stores planned for closure had a low single-digit operating margin last year. Stores we plan to open are forecasted to earn more than a 20% 4-wall operating margin. That's been our experience with store openings in recent years. Nearly 70% of children's apparel is purchased in stores and stores continue to be the largest source of new customer acquisition. We're leveraging our stores to provide a convenient shopping experience for our online customers. Nearly 30% of our online orders in the first quarter were fulfilled by our stores. We expect that nearly 40% or more of our online orders will be fulfilled by our stores within the next 5 years. These transactions enable quicker delivery of the order at higher margins relative to shipping from our distribution center. Our marketing team did a good job in recent years linking the credit card transactions to our Rewarding Moments Loyalty Program, which incentivizes repeat purchases. Over 90% of our transactions last year were from customers in our loyalty program, which enables us to analyze shopping behaviors and provide a better experience for our best customers. Our supply chain continues to work through the challenges of transportation delays caused by the lingering effects of the pandemic. On-time deliveries to our wholesale customers and our stores improved in the first quarter. We're now routing over 60% of our imports through the East Coast with good results. Our East Coast ports are less congested than the West Coast and processing receipts quicker for us.

我們的重點是為線上購物者提供便利的高人流量露天中心，包括在大流行期間流行的路邊取貨。去年計劃關閉的商店營業利潤率較低，僅個位數。我們計劃開設的商店預計將獲得超過 20% 的 4 牆營業利潤。這是我們近年來開店的經驗。近70%的童裝是在商店購買的，商店仍然是新客戶獲取的最大來源。我們正在利用我們的商店為線上客戶提供便利的購物體驗。第一季我們近 30% 的線上訂單是由我們的商店完成的。我們預計，未來 5 年內，近 40% 或更多的線上訂單將由我們的商店完成。與從我們的配送中心出貨相比，這些交易能夠以更高的利潤更快地交付訂單。近年來，我們的行銷團隊做得很好，將信用卡交易與我們的獎勵時刻忠誠計畫聯繫起來，從而激勵重複購買。去年我們超過 90% 的交易來自忠誠度計劃中的客戶，這使我們能夠分析購物行為並為我們的最佳客戶提供更好的體驗。我們的供應鏈繼續應對因大流行的揮之不去的影響造成的運輸延誤的挑戰。第一季向我們的批發客戶和商店的準時交貨有所改善。目前，我們 60% 以上的進口貨物都透過東海岸運輸，效果良好。我們的東海岸港口不像西海岸那麼擁擠，並且處理收據的速度更快。

To date, we have not been materially affected by China's recent COVID restrictions. We source less than 10% of our total unit volume from China. Our suppliers source a large portion of our fabric and other component parts from the southern regions of China, far from the major cities being locked down further north. Shanghai ports have remained open, but are congested. Alternative ports are being used to mitigate congestion related delays. To mitigate the risk of further delays, we have placed factory orders 3 to 6 weeks earlier this year. This strategy should enable our product offerings to get here earlier. Late deliveries and inflation will weigh on the growth that would have otherwise been possible this year. We reflected higher product and transportation costs in our forecasts. For the year, we've estimated product costs up about 7%. We expect our freight costs will be up over 10% this year. Ocean freight rates have more than doubled versus last year. We have ocean freight rate contracts for about 90% of our unit volume through the first half of next year. The rates under those contracts are less than half the current spot market rates. Lower spending on air freight planned this year and next will help mitigate the higher ocean freight rates. The best information we have suggests that freight rates may decrease by the second half of 2023 as capacity improves and global demand moderates in the months ahead.

迄今為止，我們尚未受到中國最近的新冠限制措施的重大影響。我們的採購量不到總產量的 10% 來自中國。我們的供應商從中國南方地區採購大部分佈料和其他零件，遠離北方被封鎖的主要城市。上海港口仍保持開放，但出現擁擠。正在使用替代連接埠來緩解與擁塞相關的延遲。為了降低進一步延誤的風險，我們今年提前了 3 至 6 週下了工廠訂單。這項策略應該能夠讓我們的產品更早上市。延遲交付和通貨膨脹將影響今年原本可能實現的成長。我們在預測中反映了更高的產品和運輸成本。我們預計今年的產品成本將上漲約 7%。我們預計今年貨運成本將上漲 10% 以上。海運價格比去年增加了一倍以上。到明年上半年，我們約 90% 的單位數量都有海運費率合約。這些合約下的費率低於當前現貨市場費率的一半。今年和明年計劃減少的空運支出將有助於緩解海運運費上漲的影響。我們掌握的最佳資訊表明，隨著未來幾個月運力的改善和全球需求的放緩，運費可能會在 2023 年下半年下降。

In summary, 2022 got off to a better start than we expected. We're forecasting good demand for our brands this year. Thankfully, the favorable trend in versed in the United States that began last summer continued through the balance of last year. Our Baby apparel product offerings represent over 50% of our annual apparel sales, and our Carter's brand has nearly 4x the share of our nearest competitor. In the first quarter, our baby apparel sales were up about 6%. It continues to be one of the strongest components of our product offerings. We've raised prices thoughtfully this year to help mitigate the effects of inflation. To date, we've seen no noteworthy resistance to pricing from our wholesale customers or consumers. Interestingly, some of our best-performing products year-to-date are the higher ticket special occasion collections. Consumers appear to be refreshing their children's outfits in anticipation of a summer vacation, getting back out on the road, reconnecting with families and friends. Carter's is the market leader in children's apparel. No other company in the kids apparel market has the scope of product offerings, depth of relationships with the winning retailers and long track record of success for many years serving the needs of multiple generations of consumers. We believe we've weathered the most challenging days of the pandemic. We'll continue to focus on the things we can control and mitigate the effects of what we can't.

總而言之，2022 年開局好於我們的預期。我們預計今年我們品牌的需求將會良好。值得慶幸的是，美國自去年夏天開始的良好趨勢一直持續到去年。我們的嬰兒服裝產品占我們年度服裝銷售額的 50% 以上，而我們的 Carter's 品牌的份額是我們最接近的競爭對手的近 4 倍。第一季度，我們的嬰兒服裝銷售額成長了約 6%。它仍然是我們產品中最強大的組成部分之一。今年我們深思熟慮地提高了價格，以幫助減輕通貨膨脹的影響。到目前為止，我們還沒有看到批發客戶或消費者對定價有明顯的抗拒。有趣的是，我們今年迄今為止表現最好的一些產品是票價較高的特殊場合系列。消費者似乎正在為孩子們更換服裝，期待暑假的到來，重新上路，與家人和朋友重新聯繫。 Carter's 是兒童服裝市場的領導者。童裝市場上沒有其他公司擁有如此豐富的產品供應範圍、與獲勝零售商的深厚關係以及多年來滿足多代消費者需求的長期成功記錄。我們相信我們已經度過了大流行中最具挑戰性的日子。我們將繼續關注我們可以控制的事情，並減輕我們無法控制的事情的影響。

I want to thank our employees throughout the world who enabled a stronger-than-planned start to the year and for their commitment to help Carter's achieve its growth objectives this year. Richard will now walk you through the presentation on our website.

我要感謝我們世界各地的員工，他們為今年帶來了比計劃更強勁的開局，並致力於幫助卡特公司實現今年的成長目標。理查德現在將引導您完成我們網站上的演示。

Thanks, Mike. Good morning, everyone. I'll begin on Page 2 of our materials with our GAAP P&L. Net sales were $781 million and reported operating income was $103 million in the first quarter. We had no non-GAAP adjustments in this year's first quarter and only minimal net adjustments related to COVID in the prior year. These adjustments are detailed on Page 3.

謝謝，麥克。大家早安。我將從材料的第 2 頁開始介紹我們的 GAAP 損益表。第一季淨銷售額為 7.81 億美元，報告營業收入為 1.03 億美元。今年第一季度，我們沒有進行非公認會計準則調整，僅對上一年與新冠疫情相關的淨調整進行了極少的調整。這些調整詳見第 3 頁。

So turning to Page 4 with some highlights of our first quarter performance. Overall, we delivered good results for the first quarter. We had planned sales and profitability down versus last year due to the noncomp of the significant government stimulus last year, the later Easter holiday this year and meaningfully higher transportation costs. Our results, though, were stronger than we had planned. Our inventory position was better than expected, which enabled higher shipments to our wholesale customers and spending was also lower than forecasted. As Mike pointed out, while our results were below last year's record first quarter performance, they were meaningfully above 2019's pre-pandemic level, reflecting the many benefits of the improvements we've made across the business.

因此，請轉到第 4 頁，其中介紹了我們第一季業績的一些亮點。總體而言，我們第一季取得了良好的業績。由於去年政府的重大刺激措施、今年較晚的復活節假期以及運輸成本的大幅上漲，我們原計劃的銷售額和盈利能力將低於去年。不過，我們的結果比我們計劃的還要好。我們的庫存狀況優於預期，這使得我們向批發客戶的出貨量增加，支出也低於預期。正如麥克指出的那樣，雖然我們的業績低於去年創紀錄的第一季業績，但明顯高於2019 年大流行前的水平，反映出我們在整個業務中所做的改進所帶來的諸多好處。

Our adjusted P&L for the first quarter is on Page 5. Sales were down 1% versus last year to $781 million. We posted over 8% sales growth in Wholesale and 11% growth in our International segment. Sales in our U.S. Retail business were down 10% versus a year ago, reflecting the tougher comparison to last year's stimulus and the later Easter holiday this year. Gross margin was 45.4%, which was down 440 basis points from last year. More than half of this decrease was due to the higher inbound transportation costs, which increased over $20 million or nearly 60% over last year. We expect transportation costs to be elevated well into next year, and they will be higher than we had originally planned for the full year in 2022. The vast majority of our ocean container volume is under contracts, which extend into the middle of next year. Our contracted rates are well below current spot market prices, but still represent a meaningful increase over what we were paying last year. We've taken steps to raise pricing and reduce other spending across the business to cover these higher-than-expected transportation costs.

我們調整後的第一季損益表請見第 5 頁。我們的批發銷售額成長了 8% 以上，國際部門的銷售額成長了 11%。我們美國零售業務的銷售額與去年同期相比下降了 10%，反映出與去年的刺激措施和今年較晚的復活節假期相比更加嚴峻。毛利率為45.4%，較去年下降440個基點。其中一半以上的下降是由於入境運輸成本增加所致，比去年增加了 2,000 萬美元以上，即近 60%。我們預計明年運輸成本將會上升，並且將高於我們最初計劃的 2022 年全年運輸成本。我們的合約價格遠低於目前的現貨市場價格，但仍比我們去年支付的價格有顯著的成長。我們已採取措施提高定價並減少整個業務的其他支出，以彌補這些高於預期的運輸成本。

Gross margin was also pressured by a higher mix of wholesale sales and less retail sales. Our wholesale volume in the quarter included more off-price channel sales related to clearing out late arriving fall and holiday product. We're expecting that off-price channel sales will be lower over the balance of the year and meaningfully lower on a full year basis than in 2019. First quarter spending was lower than last year by $11 million. Store expenses were lower as a result of our permanent store closures, and compensation costs were also lower than last year. Distribution and outbound freight costs were higher as was our spending on marketing in the first quarter. Adjusted operating income was $103 million, down about 20%, which, as I said, was a smaller decline than we had planned. On the bottom line, adjusted earn earnings per share were $1.66 compared to $1.98 last year.

批發銷售增加和零售銷售減少也給毛利率帶來壓力。我們本季的批發量包括更多與清理遲到的秋季和假日產品相關的折扣通路銷售。我們預計今年餘下的折扣通路銷售額將低於 2019 年，全年的銷售額將顯著低於 2019 年。由於我們永久關閉商店，商店費用有所下降，補償費用也低於去年。分銷和出境貨運成本較高，我們第一季的行銷支出也較高。調整後營業收入為 1.03 億美元，下降約 20%，正如我所說，降幅比我們計劃的要小。從底線來看，調整後每股收益為 1.66 美元，而去年為 1.98 美元。

Turning to Page 6 and some highlights of our balance sheet and cash flow. Our balance sheet remains in great shape. We ended the quarter with substantial liquidity. Receivables were higher as a result of the strong growth in wholesale sales in the quarter. Inventory was up 21%. The quality of our inventory is very good. As I said, we've moved through the majority of late arriving product from prior seasons. A few things drove the year-over-year increase in our inventory. Units were up 9% and as planned, product costs were up over last year. In-transit inventory remains elevated, although less so than at the end of last quarter. As Mike mentioned, we are taking ownership of inventory 3 to 6 weeks earlier than typical given the higher transit times from Asia. Our inventory levels are expected to be higher year-over-year throughout the balance of the year with Q2 ending inventory projected up over 30% versus 2021. We're expecting year-end inventory will be up high single digits with most of the increase representing product cost inflation and units more or less even with last year. We see good demand for our products in the second half of the year, given the myriad of supply chain issues over the past couple of years. We are fortunate to have the resources and wherewithal to be able to bring in inventory early and hopefully better meet projected demand. Long-term debt, as presented on our quarter end balance sheet, was lower by about $500 million, which reflects reclassification of our pandemic-related senior notes as a current liability. We redeemed these notes in early April. This financing has been put in place to provide additional liquidity in the very early days of the pandemic. Fortunately, given the resilience of our business over the past 2 years, we didn't need this financing. By redeeming these notes early, we will lower our annual cash interest costs by $28 million. Our cash used in operations was greater in this year's first quarter than last year, which largely reflects the higher inventory level and higher performance-based compensation payments in the first quarter, which relate to the record performance achieved in the business last year. We're expecting to generate good operating cash flow for the full year in the range of $275 million to $300 million. We continue to return capital to our shareholders in the first quarter. We paid dividends of $31 million and repurchased $74 million of our shares.

轉到第 6 頁，我們的資產負債表和現金流量的一些要點。我們的資產負債表仍然保持良好狀態。本季結束時，我們擁有大量流動資金。由於本季批發銷售強勁成長，應收帳款較高。庫存增加了 21%。我們的庫存品質非常好。正如我所說，我們已經處理了前幾季中大部分遲到的產品。有幾件事推動了我們庫存的年增長。單位數量增加了 9%，按照計劃，產品成本比去年增加了。在途庫存仍然較高，但低於上季末。正如麥克所提到的，鑑於亞洲的運輸時間較長，我們比平常提前 3 至 6 週獲得庫存。我們的庫存水準預計將在今年餘下時間中同比上升，其中第二季度期末庫存預計將比 2021 年增加 30% 以上。和單位數量或多或少與去年持平。鑑於過去幾年出現的無數供應鏈問題，我們認為下半年對我們產品的需求良好。我們很幸運擁有資源和資金，能夠儘早引入庫存，並希望更好地滿足預期的需求。我們季末資產負債表上的長期債務減少了約 5 億美元，這反映出我們將與疫情相關的優先票據重新分類為流動負債。我們在四月初贖回了這些票據。這筆融資的目的是在疫情初期提供額外的流動性。幸運的是，考慮到過去兩年我們業務的彈性，我們不需要這筆融資。透過提前贖回這些票據，我們的年度現金利息成本將降低 2,800 萬美元。今年第一季我們在營運中使用的現金比去年更多，這在很大程度上反映了第一季較高的庫存水準和較高的基於績效的薪酬支付，這與去年業務取得的創紀錄業績有關。我們預計全年將產生 2.75 億至 3 億美元的良好營運現金流。我們在第一季繼續向股東返還資本。我們支付了 3,100 萬美元的股息，並回購了 7,400 萬美元的股票。

On Page 8, we've summarized our business segment performance in the first quarter. At a high level, our consolidated sales decreased slightly by $6 million or 1% versus a year ago. Sales were lower in Retail, while we had good growth in both Wholesale and International. Our operating margin declined versus last year's record level, virtually all of which is attributable to the over $20 million increase in transportation costs. Corporate expenses were lower by $10 million due to lower consulting and performance-based compensation expenses.

在第 8 頁，我們總結了第一季的業務部門表現。在較高水準上，我們的綜合銷售額與去年同期相比略有下降 600 萬美元，即 1%。零售業的銷售額較低，而批發業和國際業的銷售額都有良好的成長。與去年創紀錄的水平相比，我們的營業利潤率有所下降，這幾乎全部歸因於運輸成本增加了超過 2,000 萬美元。由於諮詢和基於績效的薪酬費用減少，公司費用減少了 1000 萬美元。

Turning to some additional detail on our business segment performance in the first quarter on Page 9. In Retail, sales were down, as I mentioned, and our total retail comp declined by 7%. A year ago, our government made a record level of direct payments to American consumers as part of its response to the pandemic. These payments benefited our retail business last year and were not repeated this year. Additionally, sales were lower because last year, we closed over 100 low-margin stores to better focus our store portfolio on higher opportunity and more profitable locations. Finally, Easter is an important holiday in our business, and it fell later in 2022 versus 2021, likely shifting sales volume out of late March into the second quarter. As a result of these factors, traffic in our retail channels, both stores and eCommerce, was lower than last year. We believe some other factors likely also weighed on our direct-to-consumer business in the first quarter, most notably the surge in inflation and lower consumer confidence. Profitability in retail was affected by the lower sales and the higher transportation costs that I've mentioned. While business so far in April has been slower than expected, we are planning for low single-digit growth in retail comps for the second quarter and full year. In Wholesale, we had 8% growth in sales, which was above our forecast. As I said, our on-hand inventory position was better than we had anticipated and to a lesser extent, some customer demand came earlier, allowing us to ship more in the first quarter. These sales, about $14 million in total, had been planned previously to occur in the second quarter. We saw good growth across our wholesale customer base in the quarter, including with our exclusive brands. Profitability in wholesale was affected by a higher mix of off-price channel sales and higher transportation costs, including some residual spending on air freight.

轉向第 9 頁有關我們第一季業務部門業績的一些其他詳細資訊。一年前，作為應對這場流行病的一部分，我國政府向美國消費者提供了創紀錄水平的直接付款。這些付款去年使我們的零售業務受益，今年不再重複。此外，銷售額較低是因為去年我們關閉了 100 多家低利潤商店，以便更好地將我們的商店組合集中在機會更大、利潤更高的地點。最後，復活節是我們業務中的重要節日，與 2021 年相比，復活節在 2022 年晚些時候有所下降，可能會將銷售量從 3 月底轉移到第二季。由於這些因素，我們的零售通路（包括商店和電子商務）的流量低於去年。我們認為，其他一些因素可能也影響了我們第一季的直接面向消費者業務，最明顯的是通膨飆升和消費者信心下降。零售業的獲利能力受到我提到的銷售額下降和運輸成本上升的影響。儘管 4 月迄今的業務成長低於預期，但我們計劃第二季和全年零售業績實現低個位數成長。在批發方面，我們的銷售額成長了 8%，高於我們的預期。正如我所說，我們的現有庫存狀況比我們預期的要好，並且在較小程度上，一些客戶需求提前到來，使我們能夠在第一季出貨更多。這些銷售總額約為 1,400 萬美元，此前原計劃在第二季進行。本季我們的批發客戶群（包括我們的獨家品牌）出現了良好的成長。批發的獲利能力受到更多的折扣通路銷售和更高的運輸成本（包括空運的一些剩餘支出）的影響。

We had a very strong quarter in our International business. We had strong growth in Canada, in Mexico and in our international Wholesale business, particularly with our Brazilian partner. In Canada, we saw strong growth in stores. A year ago, stores were largely still closed in Canada and sales rebounded strongly in this channel. Profitability was down about 50 basis points in International. Margins benefited from the strong recovery in Canadian store sales and higher sales in our high-margin international Wholesale business, offset by higher transportation costs, which are affecting all parts of our business right now.

我們的國際業務季度表現非常強勁。我們在加拿大、墨西哥和國際批發業務（特別是與我們的巴西合作夥伴）都實現了強勁成長。在加拿大，我們看到商店的強勁成長。一年前，加拿大的商店基本上仍處於關閉狀態，但該管道的銷售額強勁反彈。國際業務獲利能力下降約 50 個基點。利潤率受益於加拿大商店銷售的強勁復甦以及我們高利潤的國際批發業務銷售額的增加，但被運輸成本上升所抵消，運輸成本目前正在影響我們業務的所有部分。

On the next page, while our profitability in the first quarter was lower than last year, we've summarized the profitability that each of our businesses was generating before the pandemic in 2019. As you can see, each of our business segments was meaningfully more profitable in this year's first quarter than back in 2019. As Mike mentioned in his remarks, the changes we've made across the business, including focusing our product offerings to fewer longer life cycle choices, operating with leaner inventories, having a higher-quality store portfolio and a more effective approach to pricing and promotion has led to a stronger and higher-margin business. These improvements are helping us to manage through the current challenges of inflation in product and transportation costs among other areas.

在下一頁中，雖然我們第一季的獲利能力低於去年，但我們總結了2019 年疫情爆發之前我們每個業務的獲利能力。了與2019 年相比，今年第一季實現了盈利。 、以更精簡的庫存運營、擁有更高的品質商店組合以及更有效的定價和促銷方法帶來了更強大和更高利潤的業務。這些改進正在幫助我們應對當前產品和運輸成本等領域通膨的挑戰。

On Page 11, one of our traditional product strength is around holidays and special events. These products are staples of our assortments, both at wholesale and in our direct channels. Now that we're hopefully on the other side of the pandemic, families are eager to celebrate, whether it's baby's first Valentine's Day, Easter or the Fourth of July. These products help us to deepen our relationships with consumers, and they drive brand loyalty and traffic. The nature of these products which are oriented around distinct and different events and holidays throughout the year drives visit frequency to our stores, our website and to our wholesale partners. On the next page, earlier this week, we launched a collaboration with Dunkin' Donuts. Everyone knows Dunkin', especially sleep deprived parents in search of caffeine. This limited capsule of Dunkin' themes products has largely sold out in only a matter of days since its introduction. Our friends at Dunkin' are fond of saying that America runs on Dunkin', and we would expand the stop to say that parenting runs on Carter's.

在第 11 頁，我們的傳統產品優勢之一是假期和特殊活動。這些產品是我們批發和直接通路產品中的主要產品。現在，我們希望已經度過了大流行的另一邊，家庭都渴望慶祝，無論是嬰兒的第一個情人節、復活節還是七月四日。這些產品幫助我們加深與消費者的關係，並提高品牌忠誠度和流量。這些產品的性質是針對全年不同的活動和假期，從而提高了我們商店、網站和批發合作夥伴的訪問頻率。在下一頁，本週早些時候，我們啟動了與 Dunkin' Donuts 的合作。每個人都知道 Dunkin'，尤其是那些睡眠不足、尋找咖啡因的父母。這款限量版 Dunkin' 主題產品自推出後短短幾天內就已基本售空。我們在鄧肯的朋友喜歡說，美國是靠鄧肯經營的，而我們可以擴大範圍說，育兒是靠卡特來經營的。

Moving to Page 13. I'm told millennials check their phones nearly 150 times a day, and they're incredibly active every day on social media. Our brands continue to lead in social media engagement, and we're building out our capabilities with newer and rapidly growing social media platforms like TikTok.

轉到第 13 頁 我聽說千禧世代每天查看手機近 150 次，而且他們每天在社群媒體上非常活躍。我們的品牌在社群媒體參與度方面繼續處於領先地位，我們正在透過 TikTok 等更新且快速成長的社群媒體平台來增強我們的能力。

On Page 14. In addition to social media, it's important to offer consumers easy, efficient and fun ways to transact digitally. We've talked a lot over the years about our leading e-commerce website. As Mike said, our mobile app has quickly become very popular with our customers and now represents a meaningful proportion of our online sales. Our Carter's credit card and loyalty programs are also important elements of how we engage with our customers. Both of these programs have proven very successful. Our credit card and loyalty programs are used in the vast majority of our retail sales.

第 14 頁。多年來，我們多次談論過我們領先的電子商務網站。正如麥克所說，我們的行動應用程式很快就受到客戶的歡迎，現在在我們的線上銷售中佔據了很大的比例。我們的卡特信用卡和忠誠度計劃也是我們與客戶互動的重要因素。事實證明，這兩個計劃都非常成功。我們的信用卡和忠誠度計劃用於絕大多數零售銷售。

On Page 15, we have some great Little Planet imagery. We expect to see meaningful growth in Little Planet this year. The brand is expanding to 270 retail stores in the U.S. and Canada with new points of wholesale distribution, including Amazon, Target, Kohl's and Buy Buy Baby. We recently expanded our Little Planet product assortment to toddler sizes, and we're adding new categories such as swimwear and shoes.

第 15 頁上有一些很棒的小星球圖片。我們預計今年小星球將實現有意義的成長。該品牌正在美國和加拿大開設 270 家零售店，並設立新的批發分銷點，包括亞馬遜、Target、Kohl's 和 Buy Buy Baby。最近，我們將 Little Planet 產品種類擴展到幼兒尺碼，並增加了泳裝和鞋子等新類別。

On Page 16, last week, we marked Earth Day with the launch of our new ESG consumer-facing platform. Theme to raise the future one important element in addition to our social and governance priorities is communicating our commitment to creating a sustainable world, one which we and families raising young children can pass along to future generations. Our product hangtags and in-store messaging have been redesigned to emphasize our sustainability initiatives including the use of certified organic fabrics and recyclable materials in our products. These games will also have a prominent place in our messaging across our various social media platforms.

上週，在第 16 頁，我們推出了消費者的新 ESG 平台，以紀念世界地球日。提升未來的主題除了我們的社會和治理優先事項之外，另一個重要因素是傳達我們對創造一個永續發展世界的承諾，我們和撫養幼兒的家庭可以將這個世界傳遞給子孫後代。我們的產品吊牌和店內資訊經過重新設計，以強調我們的永續發展舉措，包括在我們的產品中使用經過認證的有機面料和可回收材料。這些遊戲也將在我們各個社群媒體平台的訊息傳遞中佔據重要地位。

On the next few pages, we have some imagery and brand messaging related to several of our wholesale customers. Target, Walmart, Amazon and Kohl's are among the largest retailers of young children's apparel in North America, and they happen to be our largest wholesale customers. On Page 17, we have a terrific photo of the Just One You brand wall at Target in addition to photos of a couple of our highly productive floor fixtures. The brand wall is the high-margin replenishment component of our business at Target and is where consumers can easily find the must-have essentials for babies. We continue to expand our product offerings to target with the addition of swim and older age sleepwear. Four of our brands are sold to Target. In addition to Just One You, Target also carries OshKosh, Skip Hop and Little Planet.

在接下來的幾頁中，我們有一些與我們的幾個批發客戶相關的圖像和品牌資訊。 Target、沃爾瑪、亞馬遜和 Kohl's 是北美最大的幼兒服裝零售商，他們恰好是我們最大的批發客戶。在第 17 頁，我們有一張 Target 的 Just One You 品牌牆的精彩照片，以及一些我們高效的地板固定裝置的照片。品牌牆是塔吉特業務中高利潤的補貨組成部分，消費者可以輕鬆找到嬰兒必備的必需品。我們繼續擴大我們的產品範圍，增加游泳和老年睡衣。我們的四個品牌出售給 Target。除了 Just One You 之外，Target 還銷售 OshKosh、Skip Hop 和 Little Planet。

On Page 18, our Child of Mine brand exclusively available at Walmart also continues to grow through new product introductions and expansion of existing categories. I mentioned our expertise earlier in events and holiday-oriented products, and we've launched events this spring at Walmart with an Americana named Red White & Blue Collection, targeting the Fourth of July. We're planning to expand our event offerings at Walmart in 2023. And at the bottom of the page, we've included some new branding for Child of Mine, which we will roll out this fall. This new branding more strongly emphasizes Child of Mine Carter's DNA.

在第 18 頁，我們在沃爾瑪獨家銷售的 Child of Mine 品牌也透過新產品的推出和現有類別的擴展而不斷發展。我之前提到過我們在活動和節日產品方面的專業知識，今年春天我們在沃爾瑪推出了名為「紅白藍系列」的美國活動，目標是 7 月 4 日。我們計劃在 2023 年擴大沃爾瑪的活動範圍。這個新品牌更加強調了《我的孩子卡特》的 DNA。

Page 19 is a photo of some beautiful summer essential products from Simple Joys on Amazon. Consumers continue to make our Simple Joys brand the best-selling children's apparel brand on Amazon. In addition to the expanded assortment of playwear in sizes 4 to 8, we're planning on launching some new Skip Hop designed bath and playtime products and also diaper bags under the Simple Joys brand later this year.

第 19 頁是亞馬遜上 Simple Joys 的一些美麗夏季必需品的照片。消費者繼續使我們的 Simple Joys 品牌成為亞馬遜上最暢銷的兒童服裝品牌。除了增加 4 至 8 號的運動服品種之外，我們還計劃在今年稍後推出一些新的 Skip Hop 設計的沐浴和遊戲產品以及 Simple Joys 品牌的尿布袋。

On Page 20, Kohl's is our largest wholesale customer for the flagship Carter's brand. Kohl's has been a great partner in the breadth and depth of the Carter's assortment, which it carries. The branding and product presentation of the Carter's brand in-store and online at Kohl's are among the most effective in the wholesale channel. In Q2, we will refresh our core baby assortment at Kohl's and are planning good sales growth.

在第 20 頁上，Kohl's 是我們旗艦 Carter's 品牌的最大批發客戶。科爾士 (Kohl's) 一直是卡特 (Carter's) 商品種類廣度和深度方面的重要合作夥伴。卡特品牌在 Kohl's 店內和網路上的品牌推廣和產品展示是批發通路中最有效的。在第二季度，我們將更新 Kohl's 的核心嬰兒品種，並計劃實現良好的銷售成長。

Turning to the next page. We've spoken on recent calls about our growing presence in Brazil with our partner, Riachuelo. Brazil is a large and attractive market with 2.7 million new babies born each year. Today, Riachuelo has opened nearly 30 Carter's branded stores in Brazil. Shown here are the newest stores in Brazilia and Sao Paulo. The Carter's branded stores add to over 260 Carter's shop-in-shops within Riachuelo department stores across Brazil. We're looking forward to the continued build-out of this high opportunity market.

翻到下一頁。我們在最近的電話中談到了我們與合作夥伴 Riachuelo 在巴西不斷成長的業務。巴西是一個龐大且有吸引力的市場，每年有 270 萬新生兒出生。如今，Riachuelo 已在巴西開設了近 30 家 Carter's 品牌專賣店。這裡展示的是巴西利亞和聖保羅的最新商店。 Carter's 品牌店是巴西 Riachuelo 百貨公司內 260 多家 Carter's 店中店的另一員。我們期待著這個充滿機會的市場的持續發展。

On Page 22, we continue to expand globally into new markets, shown here as a new Carter's store in Uruguay. This is a smaller market in South America, but the Carter's brand has strong brand awareness in this country. Our partner here has now opened 5 Carter's branded stores in addition to managing the eCommerce channel in this market.

在第 22 頁，我們繼續在全球擴展新市場，此處顯示的是烏拉圭的一家新 Carter's 商店。這是南美洲一個較小的市場，但卡特品牌在這個國家有很強的品牌知名度。除了管理市場的電子商務管道外，我們的合作夥伴現已開設了 5 家 Carter's 品牌商店。

Turning now to our outlook, beginning with second quarter on Page 24. Net sales are projected to be in the range of $750 million to $775 million, which would represent growth of just under 1%, up to about 4%. We're forecasting operating income between $95 million and $105 million and adjusted diluted EPS of $1.60 to $1.80. We're expecting lower wholesale sales given the move of some demand previously planned for second quarter into first quarter. We're forecasting continued improvement in price realization, and we will have increased costs for freight and transportation. Earnings per share is expected to benefit from lower interest expense and our share repurchase activity. Relative to our previous first half guidance, we've adjusted the lower end of our previous outlook for sales by about $20 million or about 1% to reflect the slower start to the second quarter. First half earnings are in line, if not somewhat better than what we had planned previously.

現在轉向我們的展望，從第 24 頁的第二季開始。我們預計營業收入在 9,500 萬美元至 1.05 億美元之間，調整後攤薄每股收益為 1.60 美元至 1.80 美元。鑑於先前計劃的第​​二季度的部分需求轉移到第一季度，我們預計批發銷售將會下降。我們預計價格實現將持續改善，並且貨運和運輸成本將增加。每股盈餘預計將受益於較低的利息支出和我們的股票回購活動。相對於我們先前的上半年指引，我們將先前銷售預期的下限調整了約 2,000 萬美元或約 1%，以反映第二季開局較慢的情況。上半年收益符合我們之前的計劃，甚至好一些。

For the full year, on Page 25, as we told you on our last call, we're expecting another good year both in sales and earnings. Our forecast is that we will build on last year's record performance. So today, we are reiterating our full year guidance. We're forecasting net sales growth of 2% to 3%, adjusted operating income growth of 4% to 6% and adjusted diluted EPS growth of 12% to 14%. There are many factors which we believe will contribute to this projected performance and some of the more significant ones are listed here. There's no shortage of challenges in the marketplace right now. We've spoken of several of them: inflation across many important costs of the business, including product input costs and transportation, the risk of slowdown in the economy and possible resurgence of COVID, including potential disruption to factories and ports in Asia. But the last couple of years have demonstrated the strength of our business and the resilience and creativity of our employees. Across Carter's, our teams are committed to delivering a very successful 2022.

正如我們在上次電話會議中告訴您的那樣，在第 25 頁上，我們預計全年銷售和收入將再創佳績。我們的預測是，我們將在去年創紀錄的業績基礎上再接再厲。因此，今天，我們重申全年指引。我們預期淨銷售額成長 2% 至 3%，調整後營業收入成長 4% 至 6%，調整後稀釋每股盈餘成長 12% 至 14%。我們認為有許多因素會影響這個預期績效，這裡列出了一些更重要的因素。目前市場上不乏挑戰。我們已經談到了其中的幾個問題：許多重要業務成本的通貨膨脹，包括產品投入成本和運輸、經濟放緩的風險以及新冠病毒可能捲土重來的風險，包括對亞洲工廠和港口的潛在幹擾。但過去幾年證明了我們業務的實力以及員工的韌性和創造力。在 Carter’s，我們的團隊致力於打造一個非常成功的 2022 年。

And with these remarks, we're ready to take your questions.

透過這些評論，我們準備好回答您的問題。

(Operator Instructions)

（操作員說明）

Our first question comes from Susan Anderson with B. Riley.

我們的第一個問題來自 Susan Anderson 和 B. Riley。

Nice job on the quarter. I'm wondering if maybe you can talk about the inflationary pressures going into the back half in 2023, and the kind of the puts and takes that you're thinking about there, particularly as cotton prices are up pretty significantly? And then maybe also if you could just give us an update on where you're at with the supply chain issues, if you've seen an improvement at all? And if you expect the same expense in the back half or is some of that air freight will go away in the quarter?

本季工作做得很好。我想知道您是否可以談談 2023 年下半年的通膨壓力，以及您正在考慮的看跌期權和選擇權，特別是在棉花價格大幅上漲的情況下？然後，也許您也可以向我們提供有關供應鏈問題的最新情況，您是否看到了任何改進？如果您預計下半年的費用相同，或部分空運費用將在本季消失？

So Susan, supply chain performance improved in the first quarter. So I'd say, it's gradual improvement. We got probably better part of 60% of the shipments to our wholesale customers are on time. The balance is running some portion of about 3 weeks late. I think that's generally what's going on in the market. In terms of inflation, the big chunks of inflationary pressures are in product costs and transportation, much more on the product cost side. So as we shared with you earlier, product costs will be up mid-single digit in the first half, high single digit in the second half. We've raised prices to make sure that we can achieve our margin objectives this year to have at least the same margins we had last year, if not have been better.

蘇珊，供應鏈績效在第一季有所改善。所以我想說，這是逐步改進的。我們向批發客戶發貨的 60% 中可能有更好的部分是準時的。餘額運行的部分時間晚了大約 3 週。我認為這就是市場上普遍發生的情況。就通膨而言，通膨壓力主要來自產品成本和運輸，尤其是產品成本。正如我們之前與您分享的那樣，上半年產品成本將上漲中個位數，下半年將上漲高個位數。我們提高了價格，以確保我們今年能夠實現利潤率目標，至少獲得與去年相同的利潤率，甚至更好。

The freight cost, since we chatted with you in February, are higher, probably about $15 million higher. And so we'll have to adjust our spending elsewhere in the business to overcome those higher ocean freight rates. So we've negotiated the other half of our ocean freight under contracts, which will -- now we've locked into through the first half of next year. Those negotiated freight rates under contract now are less than half the spot market rate. So we feel -- albeit higher, we feel as though we're in a good place through the first half of next year. What's going to help us in the second half is, we're comping up against significant and unusual air freight charges that we incurred in the second half of last year. So that will help mitigate some of the higher transportation costs that we'll now have in the second half. So transportation cost for us this year, even though ocean freight rates have more than doubled, our freight expenses this year will be up a little over 10%. So I think we reflected what we know in the forecast that we're sharing with you this morning. And we feel good. We feel good about the product offering. We feel good about our marketing strategies, and so we expect that we have the potential to have a very good year this year.

自從我們在 2 月與您交談以來，運費更高，可能高出約 1500 萬美元。因此，我們必須調整業務其他方面的支出，以克服海運費上漲的問題。因此，我們已經根據合約談判了另一半的海運，現在我們已經鎖定到明年上半年。目前合約協議運價還不到現貨市場運價的一半。所以我們覺得──儘管更高，但我們覺得明年上半年我們的處境很好。對我們下半年有幫助的是，我們正在應對去年下半年產生的大量且不尋常的空運費用。因此，這將有助於減輕下半年我們將面臨的一些較高的運輸成本。所以我們今年的運輸成本，即使海運費漲了一倍多，我們今年的運費也會上漲10%多一點。所以我認為我們在今天早上與大家分享的預測中反映了我們所知道的情況。我們感覺很好。我們對所提供的產品感覺良好。我們對我們的行銷策略感覺良好，因此我們預計今年有可能取得非常好的一年。

Great. That's very helpful. If I could just add one follow-up just on the AUR. I'm curious, in the quarter, were you able to realize all of the price increases that you were putting through? Or did you promote a little bit more than you were expecting at all? Or are the promotions still very rational out there?

偉大的。這非常有幫助。如果我可以在 AUR 上新增一項後續行動就好了。我很好奇，在本季度，您是否能夠實現所有的價格上漲？還是您的促銷力道是否超出了您的預期？或者說促銷活動仍然非常理性嗎？

I would say, we achieved the pricing objectives in our direct-to-consumer business. And what you saw in the first quarter, as we expected, off-price sales were higher because we cleared out -- as Richard shared with you, we cleared out the late-arriving fall and holiday product in the first -- that late arriving last year, cleared it out in the first quarter through the off-price channel. That's when you're going to get the highest and best value for that product by the weather. It's still cold, which it was. In the first quarter, we saw good demand for that product. So off-price as a percentage of our sales in the first quarter around 2% for the year, we expect it to be around 1%.

我想說，我們在直接面向消費者的業務中實現了定價目標。正如我們所預期的，您在第一季所看到的，折扣銷售量更高，因為我們清理了- 正如理查德與您分享的那樣，我們在第一季度清理了遲到的秋季和假日產品- 遲到的產品去年第一季透過低價管道清倉。那時您將根據天氣獲得該產品的最高和最佳價值。天氣還是很冷，確實如此。在第一季度，我們看到對該產品的良好需求。因此，折扣占我們第一季銷售額的百分比約為 2%，我們預計全年銷售額約為 1%。

And our next question comes from Paul Lejuez with Citi.

我們的下一個問題來自花旗銀行的 Paul Lejuez。

Just on the first quarter, how much did the sales to off-price impact your gross margin in 1Q? Also curious what's going on in the D&A line? Look like that was a bit lower by looking at the cash flow statement. So curious how to model that go forward. And then you mentioned April started off a little bit weaker than anticipated. Just curious which pieces of the business and what you think the drivers are? And why you have confidence in reiterating the full year?

就第一季而言，特價銷售對你們第一季的毛利率有多大影響？也很好奇 D&A 線上發生了什麼事？從現金流量表來看，這個數字似乎有點低。很好奇如何繼續建模。然後你提到四月的開局比預期的要弱一些。只是好奇業務的哪些部分以及您認為驅動因素是什麼？為什麼您有信心重申全年業績？

Yes. So Paul, of the 400 some basis points decrease in gross margin year-over-year in the first quarter, it's about 100 basis points that I would call mix. And I would say, the higher proportion of off-price channel sales is a good proportion of that. So call it 100 basis points of the 400 basis points was mix related, specifically related to off price. On your question on depreciation, it is down. It will be down kind of all year. From memory, depreciation is forecasted to be about $70 million, and I believe it was about $90 million for the full year last year. There's a couple of things that worked there. One, just the impact of having closed over 100 stores over the course of 2021. So expenses related to those stores are out of the base. And then I would say, in our technology spending, there's been a longer-term shift away from CapEx dollars more towards Software as a Service solutions for the various new technologies that we're putting in place. We had very low CapEx, I would say, in general in 2020 just during the pandemic year. So some of that's probably reflected and depreciation being a bit lower as well.

是的。所以保羅，第一季毛利率比去年同期下降了 400 個基點，其中大約有 100 個基點，我稱之為混合。我想說的是，較高比例的折扣通路銷售是其中很大一部分。因此，400 個基點中的 100 個基點與混合相關，特別是與折扣相關。關於你的折舊問題，它是下降的。全年都會有所下降。據我記憶，折舊預計約為 7000 萬美元，我相信去年全年折舊約為 9000 萬美元。有幾件事在那裡發揮了作用。一是 2021 年關閉 100 多家商店的影響。然後我想說，在我們的技術支出中，從長期來看，資本支出更多地轉向我們正在實施的各種新技術的軟體即服務解決方案。我想說的是，在 2020 年大流行期間，我們的資本支出總體來說非常低。因此，其中一些可能已被反映，折舊也稍低一些。

And then April?

然後四月？

For your question on April? Yes, Paul...

對於你四月的問題？是的，保羅...

What drove it? That's kind of what I was asking. And then why you have confidence to kind of reiterate the year, if April has started off a little bit weaker?

是什麼推動了它？這就是我想問的。如果四月開局有點疲軟，為什麼你有信心重申這一年呢？

April is a little soft. Our stores have been up, I think is about 8% in April. E-commerce has been lower. Easter was softer than we planned. That's really probably the key on that one. And we believe that we really haven't seen that warmer weather pop across the country yet. So it happens every season as the weather gets warmer in the spring and summer and cooler in the fall. We see a pop in our business we have not seen that yet. But April is a little bit below what we planned. We're comping at about a negative 1 right now in April based on by the slower start with Easter.

四月有點溫柔。我們的商店已經上漲了，我想四月大概上漲了8%。電子商務一直較低。復活節比我們計劃的要溫和。這確實可能是那個的關鍵。我們相信，我們確實還沒有看到全國各地出現溫暖的天氣。因此，隨著春季和夏季天氣變暖，秋季涼爽，每個季節都會發生這種情況。我們看到我們的業務出現了前所未有的成長。但四月的進度略低於我們的計畫。由於復活節開局較慢，4 月我們的比較結果約為負 1。

Got it. And then just if I kind of maybe one follow-up. What do your order books look like for the back half, if that's something you can talk about?

知道了。然後，如果我想跟進一下的話。如果您可以談談的話，您的後半部訂單簿是什麼樣的？

Well, wholesale, the business has been good. As you know, we beat Q1. We're up about 8%. We're planning the first half up mid-single digits and the second half up mid-single digits as well, I believe. So I think if we're successful with our plans in wholesale, our sales will be actually comparable to 2019 with the exclusion of off-price, planning good growth with the majority of the accounts. As Richard shared, we've got several new placements for some of our key strategies in Age Up and Little Planet and events with the wholesale partners. And I think one of the things I'm most interested to see how this develops is, we've had a change in the birth rate trends progressively better in Q2, Q3 and Q4. And as you know, the majority -- vast majority of the Wholesale business is actually baby related. So hopefully, that can be a tailwind for our business. And we had very strong selling in Q1 and year-to-date in our baby products, not only in our Retail business, but in our Wholesale business.

嗯，批發，生意一直不錯。如你所知，我們擊敗了第一季。我們上漲了約 8%。我相信，我們計劃上半年上漲中個位數，下半年也上漲中個位數。因此，我認為，如果我們的批發計劃取得成功，我們的銷售額實際上將與 2019 年相當（不包括折扣），並且大多數客戶計劃實現良好增長。正如理查德分享的那樣，我們在 Age Up 和 Little Planet 中的一些關鍵策略以及與批發合作夥伴的活動中獲得了幾個新的展示位置。我認為我最感興趣的事情之一是，我們的出生率趨勢在第二季、第三季和第四季逐漸好轉。如您所知，大多數——絕大多數批發業務實際上與嬰兒有關。希望這能夠成為我們業務的順風車。我們的嬰兒產品在第一季和今年迄今的銷售非常強勁，不僅在我們的零售業務中，而且在我們的批發業務中。

We have a question from Warren Cheng with Evercore.

我們有來自 Evercore 的 Warren Cheng 提出的問題。

I had a question on the retail profitability. The first quarter Retail segment margins were really impressive if you look at -- as you compare it to what you typically generate in the first quarter even with the higher freight. Can you just help us think about how to translate that on a full year basis? If you just look at your -- the changes to your footprint, we assume freight normalizes eventually. Just how to think about the kind of going forward retail profitability?

我對零售獲利能力有疑問。如果您將其與第一季通常產生的利潤進行比較（即使運費較高），那麼第一季零售部門的利潤率確實令人印象深刻。您能否幫助我們考慮如何將其轉化為全年的數據？如果你只看你的足跡的變化，我們假設貨運最終會正常化。只是如何思考未來零售業的獲利能力如何？

Well, the unlock in the business, Warren, continues to be improved price realization. So while we certainly have some inflationary pressure in product costs, I'd say, we're building back some compensation costs in that part of the business as well. Just returning store staffing levels to more appropriate models. The real unlock has been improving our price realization. Product costs are up. That price realization is expected to improve as we move through the back half of the year and certainly sort of move into second quarter and second half. So there'll be more of a contribution from that improved AUR even with product cost being up. So I would say, that's really the engine. That's really what's allowed us to drive a more profitable business, less brand erosive promotions, more focused on getting paid for our good work, buying inventory at a bit of a high fraction, but at some proportion of forecasted demand. So operating at a bit more of a scarcity model has reduced the amount of inventory that ultimately goes to clearance, which has become kind of a big issue in both the stores and the online channel. There's just less of that today.

沃倫，業務的解鎖繼續是提高價格實現。因此，雖然我們在產品成本方面確實面臨一些通膨壓力，但我想說，我們也在這部分業務中削減了一些補償成本。只是將商店人員配備水平恢復到更合適的模型。真正的解鎖是提高我們的價格實現。產品成本上漲。隨著下半年的到來，尤其是第二季和下半年，預計價格實現將會改善。因此，即使產品成本上升，改進的 AUR 也會帶來更多的貢獻。所以我想說，這確實是引擎。這確實使我們能夠推動業務利潤更高，減少品牌侵蝕性促銷，更專注於為我們的出色工作獲得報酬，以較高比例購買庫存，但按預測需求的一定比例購買庫存。因此，以更多的稀缺模式進行營運減少了最終清倉的庫存量，這已經成為商店和線上管道的一個大問題。只是今天這樣的事少了一些。

And what I'd add to that, Warren, is the mix of stores. We continue to close the low-margin stores and open up higher-margin stores. That's the game plan. Over the next 5 years, we'll open up probably more than 100 stores net of closures because the margins, the EBITDA margins we're seeing on new stores are in the high 20% range. So very good returns on investment.

華倫，我要補充的是商店的組合。我們繼續關閉利潤率低的商店並開設利潤率較高的商店。這就是比賽計劃。在接下來的 5 年裡，我們將新開 100 多家門市（扣除已關閉的門市），因為我們看到新店的 EBITDA 利潤率約為 20%。所以投資報酬率非常好。

Got it. And is there a way to quantify that lift from all those different drivers? They said, if I just think about the stores that were closed, that were low margin, some of the freight headwinds that are happening now. And if you strip those out, is there a way to just quantify kind of the overall lift to the retail profitability versus pre-pandemic levels?

知道了。有沒有辦法量化所有這些不同驅動因素所帶來的提升？他們說，如果我只考慮那些關閉的商店，它們的利潤率很低，現在正在發生一些貨運逆風。如果將這些因素剔除，是否有辦法量化零售獲利能力相對於疫情前水準的整體提升？

I'll give you a sense. We probably took out over $100 million of sales from store closures since 2019, and retail is more profitable having done that.

我給你一個感覺。自 2019 年以來，我們可能從關閉商店中​​獲得了超過 1 億美元的銷售額，這樣做後零售業的利潤會更高。

Got it. And then one quick follow-up. Just on the exclusives, can you give an update on what they represent as a percentage of wholesale today? And how the profitability of that business is involved during the pandemic?

知道了。然後是快速跟進。就獨家產品而言，您能否介紹一下它們在當今批發市場中所佔百分比的最新情況？疫情期間該業務的獲利能力如何？

Exclusive, they're just under half of the business in wholesale. I guess 48% exactly in the quarter, and profitability is good. It is -- profitability is slightly accretive to our overall Carter's CRI operating margins.

獨家，他們佔批發業務的一半以下。我估計本季正好是 48%，獲利能力很好。獲利能力略微增加了卡特 CRI 的整體營運利潤率。

Our next question comes from Jim Chartier with Monness, Crespi, Hardt.

我們的下一個問題來自 Jim Chartier 和 Monness、Crespi、Hardt。

You mentioned you're contracted on freight work for the first half '23. Just curious how the first half of next year contract rates compares to the first half of this year? Are they still up in that 10%-ish kind of range?

您提到您簽訂了 23 年上半年的貨運工作合約。只是好奇明年上半年的合約費率與今年上半年相比如何？它們仍然在 10% 左右的範圍內上漲嗎？

Yes, they'll be higher. First half to first half will be higher, yes, next year.

是的，他們會更高。上半年到上半年會更高，是的，明年。

Okay. And then you mentioned a rebound in tourist stores. What percentage of store sales historically come from tourism? And then when did you start to see those stores first rebound? And then where those stores performing relative to 2019?

好的。然後你提到旅遊商店的反彈。歷史上商店銷售額的百分之多少來自旅遊業？那麼您什麼時候開始看到這些商店首次出現反彈？那麼這些商店相對於 2019 年的表現如何呢？

I'd say, the tourists, they were talking about Orlando in Southern California and Central Valley up in New York. They're probably around 20% of the stores, but these are -- might be 20% of the stores, but these are mega stores. We probably do better part of $14 million in Orlando, where as a typical store, we'd open up does closer to $1 million. So these are -- so we're just encouraged. More people are getting -- if you've traveled like many of us have traveled in recent months, the planes are packed and more and more people are coming back into the United States, and we're starting to see that in the tourist location. So we're encouraged by that. So our best performing stores were in Florida, in California in the first quarter. And one, I think the weather was more spring like and two, more people are getting out and reconnecting with families and friends. So we'll see how that trend continues. We saw -- I would say, we saw it around the holidays. It started around the holidays, started to see it as we -- in the second half of last year, particularly over the holidays and it's continued into the first quarter.

我想說，遊客們正在談論南加州的奧蘭多和紐約的中央谷。它們可能佔商店的 20% 左右，但這些是——可能是商店的 20%，但這些是大型商店。我們在奧蘭多的銷售額可能會達到 1,400 萬美元，作為一家典型的商店，我們在那裡開設的銷售額接近 100 萬美元。所以這些都是——所以我們受到鼓勵。越來越多的人——如果你像我們許多人最近幾個月那樣旅行過，飛機上已經擠滿了人，越來越多的人回到美國，我們開始在旅遊勝地看到這一點。所以我們對此感到鼓舞。因此，第一季我們表現最好的商店位於佛羅裡達州和加利福尼亞州。一，我認為天氣更像春天了，二，越來越多的人走出去，與家人和朋友重新聯繫。所以我們將看看這種趨勢如何繼續。我們看到了——我想說，我們在假期期間看到了它。它是在假期前後開始的，我們從去年下半年開始看到這一點，特別是在假期期間，並且一直持續到第一季。

Great. And then just in terms of kind of future cost inflation, I mean what's your confidence in terms of your ability to continue to raise prices, if inflation continues to be a problem in the next year?

偉大的。然後就未來的成本通膨而言，我的意思是，如果明年通膨仍然是一個問題，您對繼續提高價格的能力有什麼信心？

I think there's more we can do on price. Again, our average price points are under $11 a unit. If you've seen the beauty of our product offerings, certainly extraordinary value. And we think -- we used to think about nickels and dimes and quarters, and through the pandemic, we realized that the consumer was -- we saw no resistance from raising the price to $1 or $2 since the pandemic began. So there's more -- if we need to do more, we can do more. And what we experienced back in 2011 when cotton prices went to over $2 a pound. The cotton prices -- at those prices more cotton was planted and within a year, the cotton prices dropped like a rock. So we'll see if that experience repeats itself going into next year, but the best information we have would suggest a combination of moderating demand and more capacity, more cotton being planted, that should be a benefit we should expect to start to see sometime next year.

我認為我們在價格方面還可以做更多的事情。同樣，我們的平均價格低於每件 11 美元。如果您見過我們提供的產品之美，肯定具有非凡的價值。我們認為——我們曾經考慮過五分錢、一毛錢和二十五分硬幣，透過這次大流行，我們意識到消費者——自大流行開始以來，我們沒有看到將價格提高到1美元或2 美元的阻力。所以還有更多——如果我們需要做更多，我們可以做更多。 2011 年棉花價格超過每磅 2 美元時我們就經歷了這樣的情況。棉花價格－在這個價格下，種植了更多的棉花，一年之內，棉花價格暴跌。因此，我們將看看這種經歷是否會在明年重演，但我們掌握的最佳資訊表明，需求放緩和產能增加、更多棉花種植相結合，這應該是我們應該期望在某個時候開始看到的好處明年。

Our next question comes from Jay Sole with UBS.

我們的下一個問題來自瑞銀集團的 Jay Sole。

I just want to make sure I understand the differences between the second quarter guide given today and what was implied for second quarter last time. It sounds like there's a wholesale shift, maybe a little bit of a slower start to the second quarter. But maybe you can just outline the other differences between where the second quarter guidance is today and where it was last quarter, that would be helpful.

我只是想確保我理解今天給出的第二季度指南與上次第二季度的暗示之間的差異。聽起來好像發生了巨大的轉變，第二季的開局可能會稍微慢一些。但也許您可以概述今天第二季度指導與上季度指導之間的其他差異，這會很有幫助。

I think it's primarily the -- what you just said, Jay, we had about $14 million of wholesale volume that we had planned for second quarter that actually took place in first quarter. So that's a bit of a hole relative to the previous plan. And then in our Retail business, as we've said, the month of April has been off to a slower start. So that's roughly a $20-ish million revision, I believe, to our first half guidance. We did outperform a bit in Q1. So the combination of those 2, I guess, (inaudible). Transportation costs perhaps a bit higher in the second quarter than we had planned, but on balance, the profit outlook very consistent with what we had told you before for first half.

我認為這主要是——傑伊，你剛才說的，我們原計劃第二季度的批發量約為 1400 萬美元，但實際上在第一季就實現了。所以這相對於之前的計畫來說有點漏洞。然後，在我們的零售業務中，正如我們所說，四月的開局較慢。我認為，這比我們上半年的指導方針大約有 2000 萬美元左右的修正。我們在第一季的表現確實略勝一籌。所以我猜這兩者的結合（聽不清楚）。第二季的運輸成本可能比我們計劃的要高一些，但總的來說，利潤前景與我們之前告訴您的上半年非常一致。

Okay. Got it. And then maybe it would be awesome to elaborate a little bit on the South America strategy that you talked about in the prepared comments. Maybe specifically within Brazil, there's a $3 billion total addressable market. What kind of market share do you think you can take in Brazil? And where are you now? And do you think you can apply this strategy to other countries?

好的。知道了。然後，如果您能詳細闡述您在準備好的評論中談到的南美戰略，也許會很棒。也許特別是在巴西，潛在市場總額達 30 億美元。您認為您能在巴西獲得多少市佔率？你現在在哪裡？您認為這個策略可以應用在其他國家嗎？

Jay, we've got -- we're doing business about 90 countries where we call our kind of partners business, international partners, where individually, a lot of these partners are small collectively, it's a good-sized business for us. Better part of $100 million business, high-margin business for us. Riachuelo is the partner that has gotten behind the brand. Just like the experience we had in the United States where a lot of the major retailers were carrying the brand and saw the strength of the product offering, but Riachuelo decided to take the brand outside of their department stores and open up standalone Carter's stores. So they probably have a couple of dozen of them now. There's a plan to open up more of them, but we have partners in Peru, Chile, Uruguay. We have partners all over Latin America. I think you know our history in China was not particularly good, and there was sales volume, but no profitability. And there wasn't really much of a path to profitability in China. So we set our sights on Latin America, which has been a very profitable business for us. So we'll do far more in Latin America than we ever would have done in China and much more profitably.

傑伊，我們在大約90 個國家/地區開展業務，我們將這些合作夥伴稱為國際合作夥伴，其中許多合作夥伴單獨而言規模較小，但對我們來說這是一項規模很大的業務。對我們來說，這對 1 億美元的業務來說是高利潤業務的一部分。 Riachuelo 是品牌背後的合作夥伴。就像我們在美國的經歷一樣，許多主要零售商都在銷售該品牌，並看到了產品供應的優勢，但 Riachuelo 決定將該品牌帶到百貨商店之外，並開設獨立的 Carter's 商店。所以他們現在可能有幾十個。我們計劃開設更多的工廠，但我們在秘魯、智利、烏拉圭都有合作夥伴。我們的合作夥伴遍佈拉丁美洲。我想你知道我們在中國的歷史並不是特別好，有銷量，但沒有獲利能力。而且在中國並沒有太多獲利途徑。因此，我們把目光投向了拉丁美洲，這對我們來說是一項非常有利可圖的業務。因此，我們在拉丁美洲所做的事情將遠遠多於我們在中國所做的事情，而且利潤也會更高。

Our next question comes from Brian McNamara with Berenberg Capital.

我們的下一個問題來自 Berenberg Capital 的 Brian McNamara。

I think a lot has been said and written about promotions kind of ramping in as it relates to you and your brand. Curious if you could kind of talk to those concerns. I know a peer of mine asked the question earlier, I know you mentioned off-price too, but off-price is not a typical promotional channel, per se. So any color there would be helpful.

我認為關於促銷活動已經有很多說法和文章，因為它與您和您的品牌有關。很好奇你是否能談談這些擔憂。我知道我的一個同行之前問過這個問題，我知道你也提到了折扣，但折扣本身並不是一個典型的促銷管道。所以任何顏色都會有幫助。

Sure. I think promotions are a function of the strength of your product offering, how you bought it, your forecast accuracy, the sell-throughs of the product offering. So during the pandemic, we kind of embrace the scarcity model. Good retailers like Target, we've learned that over the years by doing business with them. We've learned a lot from Target, Amazon, Walmart in terms of how to drive better businesses, the businesses we've had from them. We've learned from them, things that we could apply to our own business. So our stores -- I think in our stores right now, we're carrying less than 30,000 units per door. I think it's closer to 27,000 units per door. It used to be over 40,000. So there's very little in our back rooms, and so we've created a kind of an experience for the consumer, get it now while it's here. And so if we over buy, that's the risk in the balance of the year. And so our teams, our retail teams, our operations teams are mindful of being thoughtful on what we buy, focus on the things the consumer needs, edit the things that are perhaps not needed. And so it's -- promotions are all a function of are you being smart on the inventory buys. So that continues to be our focus here. We were less promotional in the first quarter. We plan to be less promotional in the balance of the year. To date, we're achieving our price objectives. Consumers not resisting the higher price at all given the strength and beauty of the product offering. What -- they had an update recently from our head merchant who said, some of the best-selling products we have are the highest ticket collections, which are the things parents would buy because their children are now traveling again, revisiting families going on, summer vacations. So we just have to be smart in terms of how we make those inventory commitments.

當然。我認為促銷取決於您的產品實力、購買方式、預測準確性以及產品銷售情況。因此，在大流行期間，我們有點接受稀缺模式。像塔吉特這樣的優秀零售商，多年來我們透過與他們開展業務了解到了這一點。我們從塔吉特、亞馬遜、沃爾瑪學到了很多關於如何推動更好的業務以及我們從他們那裡獲得的業務的知識。我們從他們身上學到了一些可以應用在我們自己的業務中的東西。所以我們的商店——我想現在我們的商店每門的銷量還不到 30,000 件。我認為每門接近 27,000 個單位。以前有4萬多。因此，我們的後室裡幾乎沒有任何東西，所以我們為消費者創造了一種體驗，現在就可以得到它。因此，如果我們過度購買，這就是今年剩餘時間的風險。因此，我們的團隊、我們的零售團隊、我們的營運團隊都注意對我們購買的東西進行深思熟慮，專注於消費者需要的東西，編輯可能不需要的東西。因此，促銷活動取決於您是否明智地購買庫存。所以這仍然是我們的重點。第一季我們的促銷活動較少。我們計劃在今年餘下時間減少促銷活動。到目前為止，我們正在實現我們的價格目標。考慮到產品的強度和美觀性，消費者根本不會抵制更高的價格。什麼- 他們最近從我們的首席商人那裡得到了最新消息，他說，我們擁有的一些最暢銷的產品是最高門票系列，這是父母會購買的東西，因為他們的孩子現在再次旅行，重訪家庭，暑假。因此，我們必須明智地做出這些庫存承諾。

Great. And do you guys have an explicit expectation for births this year? I know a lot has been said. The estimates are kind of few and far between, but I'm curious, is that something that kind of drives how you look at particularly your baby apparel sales, and how you -- your expectations for that?

偉大的。你們對今年的出生有明確的期待嗎？我知道已經說了很多了。這些估計數很少且相距甚遠，但我很好奇，這是否會影響您對嬰兒服裝銷售的看法，以及您對此的期望？

Yes. Thankfully, the trend there is positive. So we had some data we shared with you in February that we saw births start to increase in June than July then August continued to September. About 2 weeks ago, we got the data through the balance of the year. With every month, the births sequentially got better. I think in the fourth quarter, the births were up 6%. I don't know if coincidentally, our baby apparel sales in the first quarter were up 6%. So I don't know if there was a connection or not, but that's a reversal of what I would say has been a 14-year decline inverse in the United States. There was a peak number of beautiful babies born in 2007. 4.3 million children born in then with the Great Recession. Almost every year since the Great Recession began in 2008, there's been a decline in births. Again, the government poured $3 trillion into the economy a year ago, a good portion of that was focused on helping families with young children. There was a view of what would happen during the pandemic. Some of the hand-wringers said that there could be as much as 500,000 fewer births last year. First, we're actually up in 2021.

是的。值得慶幸的是，那裡的趨勢是積極的。因此，我們在 2 月份與您分享了一些數據，我們發現 6 月份的出生率開始高於 7 月份，然後從 8 月份持續到 9 月份。大約兩週前，我們得到了全年餘額的數據。每個月，分娩情況都逐漸好轉。我認為第四季的出生人數增加了 6%。不知道是否巧合，我們第一季的嬰兒服裝銷售額成長了6%。所以我不知道是否有聯繫，但這與我所說的美國 14 年的衰退相反。 2007年是漂亮嬰兒出生數量的高峰。自 2008 年經濟大衰退開始以來，幾乎每年出生率都會下降。一年前，政府再次向經濟注入了 3 兆美元，其中很大一部分用於幫助有小孩的家庭。人們對大流行期間會發生什麼有一種看法。一些憂心忡忡的人表示，去年的出生人數可能會減少多達 50 萬人。首先，我們實際上已經到了 2021 年了。

So the outlook for births is good. Hopefully, it's sustained. How do we model that? We really don't. We focus on the strength of our product offerings, marketing strategies, strength of the relationships we have with the winning retailers, what we think is possible our direct-to-consumer business, but that's a very positive reversal of what had been a 14-year decline in births in the United States. So we're encouraged by it.

因此，出生前景良好。希望它能持續下去。我們如何建模？我們真的不知道。我們專注於我們產品供應的優勢、行銷策略、我們與獲勝零售商的關係強度、我們認為我們的直接面向消費者業務的可能性，但這是對 14-14 年的一個非常積極的逆轉。出生人口逐年下降。所以我們對此感到鼓舞。

We have a question from Ike Boruchow with Wells Fargo.

我們有富國銀行艾克·博魯喬 (Ike Boruchow) 提出的問題。

Could you guys help us have a little bit more on the Easter shift. I think historically, it's been around a high single-digit percent of revenue impact quarter-to-quarter. Is that similar to what's happening this year, Q1 to Q2?

你們能幫我們多了解復活節班次嗎？我認為從歷史上看，每季的收入影響都在個位數左右。這與今年第一季到第二季發生的情況相似嗎？

Yes. We modeled at about $10 million in our retail business.

是的。我們的零售業務規模約為 1000 萬美元。

Got it. So I guess what my question is, is based on the quarter-to-date guide, I guess down one to get to the up low single, it just seems like you're baking in a pretty meaningful acceleration in May and June because shift adjusted, the comps are more like down 10. So I guess I'm just trying to -- is it just warmer weather? Is there something else that gives you the confidence that you're going to see that kind of meaningful acceleration in the back half of the quarter? I'm just trying to piece together what's going on right now and what your expectation is for the remainder of 2Q in retail.

知道了。所以我想我的問題是，基於季度至今的指南，我想下降一個以獲得最高的低單曲，看起來你正在五月和六月的一個非常有意義的加速中烘烤，因為轉變調整後，比較結果更像是下降10。是否有其他因素讓您有信心在本季後半段看到這種有意義的加速？我只是想將目前正在發生的事情以及您對第二季度剩餘時間零售業的期望拼湊起來。

Yes, we're trying to read the business, obviously, every day, as I commented before. I think we have not seen that weather pop, number one. Number two is, we try to read the stimulus from last year and how much that impacted our business in March and in April. And I think that there was clearly an impact comping up against that in March and probably, more than we may have anticipated in April. So between those 2 factors, we continue to monitor the business, and we're optimistic that we'll see the turn, but it's early. And we're planning low single-digit comps for the rest of the year and the rest of the quarter, and we'll see how that materializes. The other point is, where the weather has turned, which is not many places, by the way. We have seen good business. We've had significant improvement, particularly some factors in the South and the West have really gotten materially better.

是的，正如我之前評論的那樣，顯然，我們每天都在努力閱讀業務。我認為我們還沒有看到這種天氣流行，第一。第二是，我們嘗試解讀去年的刺激措施以及這對我們 3 月和 4 月業務的影響有多大。我認為，與三月相比，顯然產生了影響，而且可能比我們四月的預期還要多。因此，在這兩個因素之間，我們繼續監控業務，我們樂觀地認為我們會看到轉變，但現在還為時過早。我們計劃在今年剩餘時間和本季剩餘時間實現低個位數的業績，我們將看看這將如何實現。另一點是，天氣變了的地方，順便說一下，這個地方並不多。我們看到了很好的生意。我們已經取得了顯著的進步，特別是南部和西部的一些因素確實得到了實質的改善。

Understood. And maybe, Richard, on the cash flow guidance, you took it down $50 million. I'm just curious if everything else is maintained on the P&L in terms of EBIT and sales and everything. So what drives the $50 million reduction in operating cash flow versus 3 months ago?

明白了。也許，理查德，在現金流量指導上，你把它減少了 5000 萬美元。我只是很好奇，在息稅前利潤、銷售等方面，其他所有內容是否都保留在損益表中。那麼，是什麼導致營運現金流較 3 個月前減少 5,000 萬美元呢？

I think on balance, it's just being a bit more conservative on the inventory. As we've commented, we're bringing in inventory in advance of good planned demand and also trying to mitigate some of these transportation delays. So my guess is, we will be a little heavier on year-end inventory than we had expected to be in our first forecast. And I think that will be a good thing because we'll have the inventory on hand to do the business that we're planning on doing.

我認為總的來說，只是在庫存方面更加保守。正如我們所評論的，我們將在良好的計劃需求之前引入庫存，並努力減少其中一些運輸延誤。所以我的猜測是，我們的年終庫存量將比我們在第一次預測中預期的要重一些。我認為這將是一件好事，因為我們手頭上將有庫存來開展我們計劃開展的業務。

Our final question comes from Tom Nikic with Wedbush Securities.

我們的最後一個問題來自 Wedbush Securities 的 Tom Nikic。

(inaudible) here on for Tom. Just a quick one. I know you guys said you had freight rates locked in through first half of '23. I know we're a long way out, but we don't see spot rates start to recede. Should we assume that we'll see more increases in freight costs late next year as your contracts were low?

（聽不清楚）這裡是湯姆的。只是快一點。我知道你們說過你們已經鎖定了 23 年上半年的運費。我知道我們還有很長的路要走，但我們沒有看到即期匯率開始回落。我們是否應該假設，由於你們的合約量較低，明年底貨運成本會進一步增加？

Time will tell. I don't think we have a crystal ball takes us into the second half of next year. Time will tell. What we've been told by some of our largest freight carriers is, they expect as capacity comes on board, things will start to moderate. And so we're just in a point right now where demand continues to exceed supply. So it's driven the rates up. We feel good about the rates that we've locked in into albeit higher. We've negotiated at least with one of the major carriers. If the rates drop, we have the flexibility. We have an effect of variable to the good side if the rates drop. We will benefit from lower rates than we've locked into right now. So our best outlook is through the first half of next year with some indication from the people we've been negotiating with that they expect because they're the experts in this that they would expect that rates have the potential to moderate starting in the second half of next year, but time will tell.

時間會證明一切。我認為我們沒有水晶球可以帶我們進入明年下半年。時間會證明一切。一些最大的貨運公司告訴我們，他們預計隨著運力的增加，情況將開始放緩。因此，我們現在正處於需求持續超過供應的階段。所以它推高了利率。我們對鎖定的利率感到滿意，儘管利率較高。我們至少與其中一家主要營運商進行了談判。如果利率下降，我們就有靈活性。如果利率下降，我們會產生正面的變數效應。我們將受益於比目前鎖定的更低的利率。因此，我們最好的展望是明年上半年，與我們談判的人們有一些跡象表明他們預計，因為他們是這方面的專家，他們預計利率有可能從下半年開始放緩明年一半，但時間會證明一切。

And that's all the time we have for questions. I'd like to turn the call back to Mr. Mike Casey for closing remarks.

這就是我們提問的時間。我想將電話轉回給麥克凱西先生，讓他致閉幕詞。

Thank you. Thanks very much. Thank you all for joining us on the call today. Look forward to updating you again on our progress in July. Goodbye, everybody.

謝謝。非常感謝。感謝大家今天加入我們的電話會議。期待再次向您通報我們七月份的進展。再見，大家。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。