CARTERS INCCRI
CARTERS INC Goodwill & Intangibles Disclosure
GOODWILL AND OTHER INTANGIBLE ASSETS
The balances and changes in the carrying amount of Goodwill attributable to each segment were as follows:
| (dollars in thousands) | U.S. Retail | U.S. Wholesale | International | Total | |||||||||||||||||||
Balance at December 30, 2023(*) | $ | 83,934 | $ | 74,454 | $ | 52,149 | $ | 210,537 | |||||||||||||||
| Foreign currency impact | — | — | (3,662) | (3,662) | |||||||||||||||||||
| Balance at December 28, 2024 | $ | 83,934 | $ | 74,454 | $ | 48,487 | $ | 206,875 | |||||||||||||||
| Foreign currency impact | — | — | 2,119 | 2,119 | |||||||||||||||||||
| Balance at January 3, 2026 | $ | 83,934 | $ | 74,454 | $ | 50,606 | $ | 208,994 | |||||||||||||||
(*)Goodwill attributable to the International segment is net of accumulated impairment losses of $17.7 million.
A summary of the carrying value of the Company’s intangible assets were as follows:
| January 3, 2026 | December 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Weighted-average useful life | Gross amount | Accumulated amortization | Net amount | Gross amount | Accumulated amortization | Net amount | |||||||||||||||||||||||||||||||||||||
Carter’s tradename | Indefinite | $ | 220,233 | $ | — | $ | 220,233 | $ | 220,233 | $ | — | $ | 220,233 | |||||||||||||||||||||||||||||||
OshKosh tradename(1) | Indefinite | 40,000 | — | 40,000 | 40,000 | — | 40,000 | |||||||||||||||||||||||||||||||||||||
Skip Hop tradename | Indefinite | 6,000 | — | 6,000 | 6,000 | — | 6,000 | |||||||||||||||||||||||||||||||||||||
Finite-life tradenames(2) | 5 - 20 years | 4,783 | 2,357 | 2,426 | 3,911 | 2,136 | 1,775 | |||||||||||||||||||||||||||||||||||||
| Total tradenames, net | $ | 271,016 | $ | 2,357 | $ | 268,659 | $ | 270,144 | $ | 2,136 | $ | 268,008 | ||||||||||||||||||||||||||||||||
| Skip Hop customer relationships | 15 years | $ | 47,300 | $ | 27,717 | $ | 19,583 | $ | 47,300 | $ | 24,540 | $ | 22,760 | |||||||||||||||||||||||||||||||
| Carter’s Mexico customer relationships | 10 years | 3,246 | 2,701 | 545 | 3,145 | 2,362 | 783 | |||||||||||||||||||||||||||||||||||||
| Total customer relationships, net | $ | 50,546 | $ | 30,418 | $ | 20,128 | $ | 50,445 | $ | 26,902 | $ | 23,543 | ||||||||||||||||||||||||||||||||
(1)A non-cash pre-tax impairment charge of $30.0 million on the OshKosh indefinite-lived tradename asset was recorded during fiscal 2024.
(2)Relates to the acquisition of rights to the Carter’s brand in Chile in December 2014, the Skip Hop brand in February 2017, and the Little Planet domain name in March 2025.
Changes in the carrying values between comparative periods for goodwill related to the International segment were due to fluctuations in the foreign currency exchange rates primarily between the Canadian and U.S. dollar that were used in the remeasurement process for preparing the Company’s consolidated financial statements. The changes in the carrying value of customer relationships for Carter’s Mexico, including the related accumulated amortization, that were not attributable to amortization expense was also impacted by foreign currency exchange rate fluctuations.
Amortization expense for intangible assets subject to amortization was $3.7 million for each of fiscal years 2025, 2024, and 2023. Amortization expense is included in SG&A expenses on the Company’s consolidated statements of operations.
The estimated amortization expense for the next five fiscal years is as follows:
| (dollars in thousands) | Amortization expense | |||||||||||||||||||
| 2026 | $ | 3,756 | ||||||||||||||||||
| 2027 | $ | 3,613 | ||||||||||||||||||
| 2028 | $ | 3,412 | ||||||||||||||||||
| 2029 | $ | 3,412 | ||||||||||||||||||
| 2030 | $ | 3,412 | ||||||||||||||||||
Goodwill and Intangible Asset Impairment Testing
The carrying values of goodwill and indefinite-lived tradename assets are subject to annual impairment reviews as of the last day of each fiscal year. Between annual assessments, impairment reviews may also be triggered by any significant events or changes in circumstances affecting our business. These impairment reviews are performed in accordance with ASC 350, “Intangibles--Goodwill and Other” (“ASC 350”). Refer to Note 2, Summary of Significant Accounting Policies for additional discussion on the Company’s goodwill and indefinite-lived tradename asset impairment testing.
In the fourth quarter of fiscal 2025, the Company performed an annual quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets as of January 3, 2026. Based upon this annual assessment, there were no impairments on the value of goodwill or indefinite-lived intangible tradename assets. The annual assessment indicated that the fair value of assets for the U.S. Wholesale, U.S. Retail and Other International reporting units exceeded its carrying values by at least 25%. The fair value of assets for the Canada reporting unit exceeded its carrying value by approximately 8%. Additionally, the annual assessment indicated that the fair value of indefinite-lived tradename assets exceeded its carrying values by at least 35%.
During the second quarter of fiscal 2025, the Company identified a triggering event related to the new tariffs enacted by the Trump Administration and the resulting unfavorable impact on the Company’s financial forecasts, as well as a sustained decrease in the Company’s stock price since the last impairment test conducted in the fourth quarter of fiscal 2024.
Additionally, during the third quarter of fiscal 2025, the Company identified a triggering event related to the sustained decrease in the Company’s stock price since the last impairment test conducted in the second quarter of fiscal 2025. As a result, the Company performed an interim quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets in both the second and third quarters of fiscal 2025. Based on these interim assessments, there were no impairments on the value of goodwill or indefinite-lived intangible tradename assets.
In fiscal 2024, the Company performed an annual quantitative impairment test on the goodwill ascribed to each of the Company’s reporting units and on the value of its indefinite-lived intangible tradename assets as of December 28, 2024. Based on these assessments, a non-cash pre-tax impairment charge of $30.0 million was recorded during the fourth quarter of fiscal 2024 on our indefinite-lived OshKosh tradename asset to write-down the carrying value to $40.0 million. This impairment charge was the result of decreased actual and projected sales and profitability for our OshKosh brand.
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.