July 25, 2014, 11:00 AM

Kids apparel brand Carter’s snags 40% of e-commerce sales from international shoppers

International consumers, and especially those in Brazil and China, helped boost web sales 37% to $48 million in Q2.

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Kids’ apparel brand and e-retailer Carter’s Inc. is planning a big e-commerce push, thanks in large part to another strong showing of its web channel during the second quarter, CEO Michael Casey told analysts today on the company’s second quarter earnings call.

“With respect to our e-commerce business, we continue to see strong demand in the quarter,” he said. “The online channel is the number one way consumers connect with our brands, and we are planning higher investments in digital marketing this year. We're leveraging our expanded e-commerce capabilities to reach more consumers and engage them more effectively.”

Though Carter’s, No. 131 in the Internet Retailer Top 500 Guide, did not disclose precise investment plans, Casey told analysts it is considering expanding its e-commerce capabilities to reach more international shoppers. “As we've shared with you previously, over 40% of the demand on our U.S. website is coming from international customers,” he said. “The highest demand in the second quarter came from Brazil and China. Online demand from China nearly tripled in the second quarter.” Consumers from more than 80 countries can place orders on Carters.com and Oshkosh.com. The e-retailers ships most international orders through Borderfree, a vendor of international fulfillment services.

Also during the quarter, Carter’s rolled out a Canadian e-commerce site at CartersOshKosh.ca for which the retailer has high expectations. “We expect this new growth initiative will make shopping for our brands more convenient for Canadians,” he told analysts on the call. “We believe our new web site may contribute as much as $30 million in sales or 10% of our projected Canadian store sales by 2018.”

The merchant also brought its call center operations in-house during Q2 in effort to improve customer service and reduce costs.

Going forward, it plans to improve its mobile capabilities, and allow shoppers to buy products online and pick up those orders in stores.

For the second quarter ended June 28, 2014, Carter’s reported:

  • E-commerce sales of $48 million, up 37.1% from $35 million in the second quarter of last year.
  • $302 million in retail sales, an 18.4% increase compared with $255 million.
  • Net sales of $574.1 million, a 10.9% increase compared with $517.9 million in the second quarter of 2013.
  • Domestic sales of the Carter’s brand increased 9.5% to $433.7 million from $396.1 million.
  • Domestic sales of the OshKosh B’gosh brand grew 16.8% to $79.2 million from $67.8 million.
  • International sales jumped 13.1% to $61.2 million from $54.1 million.
  • Net income of $25.9 million, up 31.5% from $19.7 million

The web comprised approximately 8.3% of total sales and 15.9% of retail sales during the quarter, versus 6.8% and 13.7%, respectively, in Q2 2013.

For the first half of the year, Carter’s also reported:

  • Net sales of $1.23 billion, a 10.8% increase from $1.11 billion in the first half of last year.
  • Net income was $60.2 million, down 1.4% from $61.1 million.
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