Carter's Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of children's clothing company Carter's (NYS: CRI) climbed as much as 10% today after its quarterly results and full-year outlook topped Wall Street expectations.

So what: Carter's beat was so wide -- adjusted EPS of $0.63 versus the consensus of just $0.44 -- that analysts are being forced to raise their growth expectations yet again. The shares have been on fire over the past year on strong domestic sales, and management now seems to be channeling that momentum internationally.

Now what: Looking ahead, Carter's now sees 2012 adjusted EPS of $2.40-$2.50, also ahead of the average analyst estimate of $2.32. "We expect to see the benefit of lower cotton prices in the second half of 2012, and we are forecasting good growth in sales and profitability this year," CEO Michael Casey said. With the stock up about 70% over the past year and trading at a 20-plus P/E, however, much of that optimism might already be baked into the price.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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