Dive Brief:
- Carter’s, Inc. has appointed Chief Financial and Operating Officer Richard Westenberger interim chief executive officer, the company announced on Tuesday. Westenberger has been with the children’s apparel company since 2009.
- Westenberger succeeds Michael Casey, who is retiring after 15 years as CEO and 30 years with the company. Casey will stay on until Feb. 28 to support the leadership transition, Carter’s said. The leadership changes are effective immediately.
- Carter’s on Tuesday also said that it’s maintaining its previously announced fiscal year guidance. The company anticipates net sales ranging from $2.79 billion to $2.83 billion. The company plans to report its fourth quarter and full-year results next month.
Dive Insight:
Carter’s, Inc. — which runs the Carter’s and OshKosh B’gosh brands — is bringing in new leadership as longtime CEO Casey retires. While Westernberger will lead in the interim, the company said it is conducting a search “focused exclusively on external candidates.”
“As we enter a new year, I believe it is the right time for me to retire and for the company to identify its next leader,” Casey said in a statement. “Carter’s is in good hands and well-positioned to strengthen its leadership of the young children’s apparel market in the years ahead.”
Westenberger will lead a company that saw net sales slip 4% year over year from $792 million to $759 million in the third quarter. Carter’s net income also declined 12% to $58.3 million from $66.1 million a year earlier. Comparable sales for the company’s U.S. segment declined 7.1%.
Despite the sales and comp declines, Casey said during an October earnings call that third-quarter results exceeded expectations. He credited new pricing and marketing strategies launched during the quarter for contributing to improved performance.
The company said it focused price reductions on less than 20% of its product offerings, such as basic T-shirts, shorts, and leggings. Casey said the strategy appears to be working, and noted that the company ended the third quarter with no seasonal borrowings and more than $1 billion in liquidity. Baby apparel was the company’s top category, with that segment growing 2% in Q3 and contributing to over 50% of total apparel sales.
Westenberger said during the earnings call that the sharper pricing and enhanced brand marketing helped improve customer acquisition and retention. That improved customer counts, which in turn will drive long-term sales growth and increase the lifetime value of its consumers.
“The whole focus of these pricing strategies and marketing strategies are to reengage the consumer who swung over to mass channel and off-price retailers when inflation surged in 2022,” Casey said. “That's where we started to lose ground.”
Prior to the pandemic, Casey said, the company posted 31 consecutive years of growth.
The recent leadership changes also include the appointment of Lead Independent Director William Montgoris as the new nonexecutive chairman of the board of directors. Montgoris’ appointment is also effective immediately.
Carter’s last significant C-suite changes were a year ago, when Chief Operating Officer Brian Lynch retired after 18 years with the company. Then-Chief Merchandising Officer Kendra Krugman was named chief creative and growth officer and Westenberger took on the additional role of COO at that time.
Carter’s, Inc. operates over 1,000 company-owned stores in the U.S., Canada and Mexico, along with its online presence. The company’s brands are also sold in Walmart, Target and on Amazon under the Child of Mine, Just One You and Simple Joys labels, respectively
