Children’s apparel manufacturer Carter’s (NYSE:CRI) will be announcing earnings results tomorrow before market hours. Here's what you need to know.

Carter's missed analysts' revenue expectations by 1.3% last quarter, reporting revenues of $857.9 million, down 5.9% year on year. It was a weaker quarter for the company, with underwhelming earnings guidance for the next quarter.

Is Carter's a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Carter's revenue to decline 8% year on year to $640.4 million, improving on the 10.9% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.77 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they are expecting the business to stay the course heading into earnings. Carter's has missed Wall Street's revenue estimates four times over the last two years.

Looking at Carter's peers in the consumer discretionary segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Levi's revenues decreased 7.8% year on year, meeting analysts' expectations, and Nike reported flat revenue, topping Wall Street's consensus estimates by 1.1%. Levi's traded up 12.3% following the results while Nike was down 7%.

Read our full analysis of Levi's results here and Nike's results here.

Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the consumer discretionary stocks have fared somewhat better, they have not been spared, with share price declining 6.6% over the last month. Carter's is down 12.6% during the same time and is heading into earnings with an average analyst price target of $74.2 (compared to share price of $72.64).

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.