Carter's, Inc. Faces Long Term Shareholder Investigation

If you are a current long-term investor in Carter's, Inc. (NYSE:CRI) and currently hold the CRI, you have certain options and you should contact the Shareholders Foundation.

To have your information reviewed for options and to recieve notifications about this investigation, please use this form. You may also send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Company Name(s): 
Carter's
Affected Securities: 
NYSE: CRI

A lawsuit on behalf of investors, who purchased their Carter's, Inc. (Public, NYSE:CRI) shares between April 27, 2004 and November 10, 2009, alleging violations of Federal Securities Laws by Carter's and others is currently pending in the United States District Court for the Northern District of Georgia. In addition an investigation on behalf of long term investors of Carter's, Inc. (Public, NYSE:CRI), who currently hold their CRI shares, focusing on potential claims against certain directors and officers of Carter's, Inc. (NYSE:CRI) was announced.

An investor in Carter’s, Inc has filed a lawsuit against Carter’s, Inc and certain of its officers and directors over alleged violations of Federal Securities Laws by issuing between April 27, 2004 and November 10, 2009 statements and that were materially false and misleading. On October 26, 2009, Carter's announced that it would postpone its third-quarter results, on the grounds that "it needed more time to complete a review of its accounting for discounts offered to some wholesale customers." On October 27, 2009, Carter’s announced that it was delaying its earnings release for the third quarter of 2009 (ended September 30, 2009) as well as delaying the related investor conference call previously scheduled for October 28, 2009. Carter’s Inc stated as follows in its October 27, 2009 press release: “The Company is delaying its earnings release in order to complete a review of its accounting for margin support to its wholesale customers. A matter arose late in the Company’s preparation for its scheduled earnings release, and more time is required to fully evaluate this matter.

The Company anticipates that it will complete its review and report its third quarter earnings by November 12, 2009.” On October 27, 2009, Carter’s common stock declined by $6.78 per share, approximately 23.8%, from $28.44 per share to $21.66 per share on substantially greater than average volume. On November 9, 2009, after the market close, Carter’s announced that as a result of the review disclosed on October 27, 2009, the Company would be restating its financial statements for the fiscal years 2004 through 2008, and the fiscal quarters from September 29, 2007 through July 4, 2009 and the filing of its 10-Q with the SEC for the third quarter of 2009 would be further delayed. In an 8-K filed with the SEC on November 10, 2009, the Company further stated as follows with regard to the restatement: “ In concluding that the Company needs to restate prior financial statements, management has identified control deficiencies associated with its wholesale margin support payments that constitute a material weakness….The Company has self-reported information concerning its review to the Securities and Exchange Commission and will cooperate with its inquiry into this matter.” On November 10, 2009, in morning trading, Carter’s common stock declined by $3.04 per share, approximately 12.6%, from $24.04 per share to $21.00 per share. Carter's share price has dropped nearly 25% since these accounting issues came to light. Carter's CEO Michael Casey stated that the Company was, "improving internal controls and management processes to help reduce risks inherent in this component of our business going forward." Mr. Casey was Carter's chief financial officer for the stated periods of restatement.

Carter’s already faces a pending lawsuit in the United States District Court for the Northern District of Georgia, on behalf of all purchasers of the securities of Carter's, Inc. between February 21st, 2006 and July 24th, 2007 over allegedly materially false and misleading statements about their ability to turn the operations of acquired company Oshkosh B'Gosh around. The lawsuit was filed against Carter's and certain officers and directors. The action seeks to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). Specifically, the complaint alleges that Defendants issued materially false and misleading statements about their ability to turn the operations of acquired company Oshkosh B'Gosh around. Then on July 24, 2007, Carter Inc.'s announced that it was taking a large write-down ($142.9 million) on the tangible assets/goodwill of its Oshkosh subsidiary and as a result of this news its shares reacted negatively falling from $24.87 to $22.75 per share by the end of trading on July 25, 2007, or a 8.5% decline in value, so the lawsuit.

Carter’s, Inc., located in Atlanta, GA, is a marketer of apparel for babies and young children in the United States. The Company owns two brand names in the children’s apparel industry, Carter’s and OshKosh. Carter’s offers multiple product categories, including baby, sleepwear, playclothes and other accessories. Carter's, Inc. reported in 2007 Total Revenue of $1.41225billion and in 2008 Total revenue of $1.49002billion. Carter's, Inc. shares (CRI) traded recently at $22.70 per share, down from its 52weekHigh of $29.49 per share.