Increased sales push up profits

Stores, online orders help make $32.3 million in first quarter.

The Atlanta-based children’s clothing company Carter’s is selling more of its wares directly to customers, and that’s benefiting the bottom line.

By opening more company-owned stores and selling more outfits online, Carter’s increased its sales by 18 percent in the first three months of the year. The company is continuing to add stores, including at least 100 in Canada over the next five years.

Opening branded mall stores reduces the company’s concentration in outlet centers, executives said in a conference call Thursday, and allows Carter’s to make more money than if it were selling primarily at lowerpriced stores. Selling directly to customers — instead of through stores such as Target or WalMart — also means Carter’s gets a larger portion of the profits.

“We’re making very good progress,” Carter’s chairman and CEO Michael Casey said in the call. “We’re expecting good growth for the balance of the year and for the years to come.”

The company raised its expectations for the year, saying it anticipates net sales will increase between 9 and 11 percent. It had said it expected growth between 8 and 10 percent. It also predicted earnings per share will increase between 20 and 25 percent, as compared to earlier expectations between 15 and 20 percent.

Several analysts upgraded the company after its earnings were reported, recommending investors buy Carter’s stock. Its stock price rose to $55.45 a share.

For the quarter, Carter’s made $32.3 million, a 0.5 percent increase over the first quarter of 2011.

The company also announced increased marketing initiatives, including a partnership with the movie “What to Expect When You’re Expecting,” which features Carter’s clothes.