CRI · CIK 0001060822
What Carter's, Inc. told the SEC could break it.
Carter's risks trace to an apparel supply chain concentrated in Asia and squeezed by tariffs. It sources all its products from third-party suppliers, with Vietnam, Bangladesh, Cambodia and India expected to be about 75% of sourcing spend in fiscal 2026 — and even as finished-goods assembly has shifted away from China (under 3%), roughly 60% of the fabric it used in fiscal 2025 still came from China, a hidden upstream dependence. That footprint made tariffs costly: it paid about $110 million of incremental tariffs in fiscal 2025, hurting product costs by roughly $60 million, with more volatility expected from the April 2025 tariff actions. Its wholesale base is also somewhat concentrated, with its two largest customers at 11.0% and 10.3% of net sales.
3 self-disclosed vulnerabilities, pulled from its own filings, each in the company’s words, with the source. This is the risk register almost nobody reads.
In its own words
What could break it.
Geographic concentration
- Asia product sourcing (Vietnam/Bangladesh/Cambodia/India; China fabric)high
Carter's sources all apparel from a global supplier network concentrated in Asia: Vietnam, Bangladesh, Cambodia and India are expected to be ~75% of product-sourcing spend in fiscal 2026 (China <3% of finished goods). However, ~60% of the fabric used in fiscal 2025 was sourced from China, a hidden upstream China dependence even as finished-goods assembly sits elsewhere.
“We source all of our apparel and other products from a global network of third-party suppliers, primarily located in Asia. We source the remainder of our products primarily through North America, Africa, and Central America. We estimate that Vietnam, Bangladesh, Cambodia, and India will collectively represent approximately 75%, and China less than 3%, of our product sourcing spend in fiscal 2026.”
Regulatory & policy
- U.S. import tariffs on Asian apparel importshigh
Carter's paid approximately $110 million of incremental tariffs in fiscal 2025 on imports from India, Vietnam, Bangladesh, Cambodia and other countries, which unfavorably impacted product costs by ~$60 million (partially offset by higher AUR); it anticipates further supply-chain challenges and cost volatility from the April 2, 2025 tariff actions.
“In fiscal 2025, we paid approximately $110 million of incremental tariffs related to imports from India, Vietnam, Bangladesh, Cambodia, and other countries. These incremental tariffs unfavorably impacted product costs by approximately $60 million in fiscal 2025, which was partially offset by higher average unit retail (“AUR”) in the second half of fiscal 2025.”
Customer concentration
- two largest wholesale customers (each >10% of net sales)medium
Carter's two largest wholesale customers accounted for 11.0% and 10.3% of consolidated net sales in fiscal 2025; at January 3, 2026, three wholesale customers each exceeded 10% of gross accounts receivable and together represented ~57% of total gross trade receivables. The customers are not named in the filing.
“Our two largest wholesale customers accounted for 11.0% and 10.3%, respectively, of consolidated net sales in fiscal 2025.”
SEC filing →As of 2026
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